BCCI cancels its IPL rights with WSG (Mauritius)
The BCCI (Board of Control of Cricket in India) has cancelled all of its IPL media license agreements with World Sports Group (Mauritius), the reason of contention being the payment of the facilitation fee amounting Rs 425 crore- (about US$90m).
The issue got the hype after BCCI’s intervention into the matter of ‘facilitation fee’ that the Sony Group firm, MSM, was supposed to pay to WSG on the broadcasting rights for Indian Premier League matches in the Indian subcontinent. The fee was charged by WSG for relinquishing its broadcast rights in favour of MSM.
BCCI has claimed that legally the money should have been paid to the board as the rights to the IPL were reserved with the BCCI. Board secretary N. Srinivasan, in a letter sent to WSG India on June 28th, revealed the unawareness of the BCCI about the agreement between World Sports Group and MSM (Satellite) PTE LTD and said that being unaware of the matter; the board could not be a party to it.
"BCCI was never made aware of any agreement between MSM (Satellite) PTE LTD and your affiliate WSG (Mauritius) Limited for payment of facilitation fee to WSG (Mauritius) Limited," the letter said. "This agreement titled as "Deed for the provision of facilitation services" was brought to our notice by MSM (Satellite) PTE LTD only recently and it was admitted to us by them that an amount of Rs 125 crores has in fact been paid by then to WSG (Mauritius) Limited. These amounts constituting so called facilitation fees are actually amounts due to the BCCI."
The facilitation fee was paid after the restructuring of the broadcasting rights deal following the first edition of IPL. Originally it was WSG India to buy the worldwide broadcast rights of the Indian Premier League for a period of ten years (2008 to 2017), an agreement that cost WSG more than $1 billion. In the meantime MSM (Satellite) PTE LTD got the India telecast rights from WSG for five years (2008 to 2012) with an option of getting the broadcast rights for the remaining five years (2013-2017) after making a payment of $25 million to WSG as an option fee.
However, in 2009 the BCCI cancelled its original broadcasting rights deal with WSG (Mauritius) and renegotiated a new nine-year contract worth $1.6 with billion the WSG. A strong retaliation came from MSM, taking the IPL to the court. After that MSM preferred a direct contract with the BCCI rather than renegotiating the matter with WSG. As a result MSM signed a contract with the board for the India rights for the same cost and tenure as WSG (Mauritius).
In March 2009 IPL agreed to sell the India rights to MSM (Satellite) PTE LTD. The WSG agreed to relinquish the India rights for a facilitation fee of Rs 425 crores retaining the international rights. The final nine-year deal valued Rs 8200 crores (US$1.6b) for both the local and international rights. Even after this agreement, World Sports Group still secured the international media rights for the league.
Since WSG surrendered MSM, the Sony Group firm, apparently contracted to pay it a compensation amounting to Rs 425 crores in the form of facilitation fee. MSM has already paid Rs 125 crores to WSG and was to pay the remaining amount over the next seven years. But BCCI after coming to know about the facilitation fee agreement claimed that the amount should have been paid to the board since it reserves all the broadcasting rights and cancelled all IPL rights with WSG. MSM has agreed to pay the fee to BCCI has filed a plea in the Bombay High Court for the recovery of the the amount (Rs 125 crores) it has already paid to WSG.
Commenting on the issue, the sports marketing agency WSG (Mauritius), said that the Board of Control for Cricket in India did not have any solid reason for cancelling the IPL contract. “Their allegations are unsupported and unsubstantiated. Their claim that the facilitation fee, which is nothing more than fair return on the Sony deal, belongs to them is baseless and this it was not aware of the Sony agreement too is not true.”
A WSG official revealed that the board was well aware of the facilitation fee as a part of the BCCI-Sony deal. He further added that the contracts were signed by the IPL Chairman and Commissioner on the behalf of BCCI.
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