BCCI cancels WSG deal 30/06/2010 |
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The Board of Control for Cricket in India (BCCI) has ended its broadcast agreement for the Indian Premier League with World Sport Group (WSG).
The announcement came just days after WSG stated it was “surprised” over news of an amended media rights agreement for the IPL between the BCCI and Multi Screen Media (MSM), and would defend any claims made against it.
The Press Association reports that the BCCI is set to secure a cash injection of $91.9m after announcing last week that it had reached an agreement to restructure the broadcast rights deal for the IPL.
The BCCI has restructured its agreement with MSM, the Indian rights holder of the IPL, in order to recover the $91.9m “facilitation fee” that MSM paid to WSG as compensation for the League’s global rights holder relinquishing its rights to the Indian subcontinent before the start of IPL 2009.
Reacting to the news, WSG said in a statement: “World Sport Group (WSG) is surprised by yesterday’s [Friday’s] developments. WSG reiterates that the contracts being referred to are above board as far as its involvement and obligations are concerned. We are not aware of and not party to the arrangements reached between MSM and BCCI and we will defend any claims which may be made by MSM against us.”
However, the BCCI has now elected to completely sever its ties with WSG stating that the “facilitation fee” document in the IPL broadcast agreement is “vitiated by fraud”. The latest decision has essentially cancelled all rights handed to WSG by suspended IPL commissioner Lalit Modi, with reports suggesting the deal will form the basis of the BCCI's action against him on July 3, when it holds a special general meeting. Modi has been accused of, among other things, financial irregularity in his position as head of the IPL.
The controversial facilitation fee arose out of the restructuring of the IPL’s initial broadcast deal, which was agreed in January 2008. It was announced that a consortium consisting of India's Sony Entertainment Television, the former name of MSM, and WSG secured the global broadcasting rights of the IPL.
The record deal, set at a cost of $1.026bn, saw WSG seal the global media rights over 10 years with Sony securing the Indian market for an initial five years, but the agreement has been amended substantially since then. Heading into the 2009 edition of the IPL, the League cancelled the MSM contract, citing poor-quality broadcasts amongst other reasons. MSM went to court, but after a lengthy legal battle, decided on an out-of-court settlement.
The new deal with MSM and WSG was worth $1.619bn over nine years granting Sony the right to be the IPL's official broadcast partner within India through to 2017, while WSG secured the global rights for the same period. The new deal saw MSM paying more than a billion dollars to hold on to the TV rights for the remaining nine years, while also stipulating that it would pay WSG the facilitation fee. BCCI members have maintained they had no prior knowledge of this deal and have called the facilitation fee an “improper payment”.
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