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WSG hits out at BCCI charges of improper payment

World Sports Group has warned the BCCI that it will take necessary steps to enforce its agreement after the BCCI terminated the IPL media rights on grounds that WSG negotiated an improper payment from MSM

Tariq Engineer
30-Jun-2010
The WSG chairman argues that the BCCI made it plain since the start of the IPL that Lalit Modi's signature was the sole requirement for any contract  •  Associated Press

The WSG chairman argues that the BCCI made it plain since the start of the IPL that Lalit Modi's signature was the sole requirement for any contract  •  Associated Press

Sports marketing agency World Sports Group has warned the BCCI that it will take "whatever steps are necessary" to enforce its business agreement after the BCCI terminated the IPL media rights on the grounds that WSG negotiated an "improper" payment from MSM (Satellite) PTE LTD, the parent company of the league's Indian broadcaster.
In a letter to BCCI secretary N Srinivasan, WSG chairman and CEO Seamus O'Brian termed the charges levelled against the agency as baseless and said that the facilitation fee MSM had agreed to pay his company was legitimate.
In 2009, MSM agreed to pay WSG a facilitation fee of Rs 425 crore as compensation for WSG relinquishing the Indian portion of the IPL media rights. The BCCI recently asserted that it had been unaware of the deal and having learnt of it, believes the money rightfully belongs to it, not WSG. The board subsequently cancelled its contract with WSG in a letter dated 28th June.
In the same letter, Srinivasan accused WSG of colluding with suspended IPL chairman Lalit Modi to cheat the board. "We strongly believe that the agreement was signed by you and Mr. Lalit Modi to defraud the BCCI of the amount of at least $80 million," Srinivasan said. Modi had committed the board to compensating WSG if MSM defaulted on payment of the fee, something Srinivasan said Modi did not have the authority to do.
In reply, O'Brian argued the BCCI made it plain to everyone since the beginning of the IPL that the chairman's signature was the sole requirement for any contract and "binding on all matters." To backtrack on that arrangement now would give everyone who signed agreements with Modi reason to believe the board had committed fraud by "telling the world that one of its officers had powers that he did not."
He went on to say that the BCCI and its advisors agreed that the board would compensate WSG if Sony defaulted on its payment and that the BCCI "needs to take responsibility for reading their contracts before and after they are signed, and not to feign knowledge when it best suits them."
On the subject of the fee itself, O'Brien said WSG does not do business without the opportunity to make a fair return, so it is no surprise the agency was compensated for giving up the Indian media rights. According to him, WSG has "considerable correspondence" with MSM on how the fee was agreed.
"Your claim that this money belong to the BCCI is baseless," O'Brian said. "On 15 March 2009, the BCCI agreed to license the Indian media rights to WSG (Mauritius) for Rs 4791.89 crores and on 25 March 2009 Sony entered into a license agreement to pay the BCCI Rs 4791.89 crores. Had an agreement not been in place, WSG would most likely have sub-licensed one of the other broadcasters it had been in negotiations with over the period (or indeed a sub-license with Sony itself), and any margin would also have been for our account and not the BCCI's."
Furthermore, O'Brian contended that if WSG (Mauritius) and not signed the agreement on March 15, the BCCI would have found itself deadlocked in a contract dispute and without a broadcaster mere weeks before IPL 2. He also takes credit for the increased value of the new rights contract over the original one signed in 2008, saying "this would not and could not have been achieved without WSG."
O'Brian insisted it was impossible for BCCI to be unaware of the agreement as it was ratified by the IPL governing council. "Your claim that the BCCI was 'never made aware' of our agreement with Sony can simply not be true. The BCCI-Sony contract, subsequently ratified by the IPL governing council upon which you and many other BCCI officials sit, clearly references such an agreement, and what is more, it clearly references the fact that the payment obligations were created between Sony and WSG (Mauritius)."
MSM had already paid WSG Rs 125 crores and was to pay the balance over the next seven years. However, MSM agreed last week to pay the BCCI the facilitation fee of Rs 425 crores instead, and has filed a suit in the Bombay High Court to recover the Rs 125 crores it has already paid WSG.

Tariq Engineer is a senior sub-editor at Cricinfo