Sponsor makes Commonwealth Games threat 04/08/2010 |
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Delhi 2010 Commonwealth Games lead sponsor Indian Railways has withheld a payment of about $30m until the organising committee (OC) makes assurances that no commission will be paid to an external agency.
Reports in India suggest the move was prompted by the OC’s refusal to reveal the shareholding breakdown of the Singapore subsidiary of the Melbourne-based Sports Marketing and Management (SMAM) that has entered into an agreement with the committee.
The Times of India quoted a source at the state-owned Indian Railways as saying: "We have raised a query with the OC whether any part of our contribution would go to SMAM."
Indian Railways’ stance could trigger similar action from other public sector donors such as Central Bank, Air India and NTPC.
SMAM signed a deal with the OC to bring in sponsorships worth about $100m in exchange for a set rate of commission, which some reports have claimed was as high as 23 per cent.
It is not the first time the OC has hired the agency and paid commission on donations made by public sector bodies.
SMAM was paid a reported 15 per cent cut on an estimated $30m of sponsorship at the Commonwealth Youth Games 2008 in Pune. All the money had been generated from the public sector, including Bank of Maharashtra, BSNL, HPCL and SAIL, with the exception of Coca-Cola, which was the only private sponsor.
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