Sahara out of IPL, plans to leave Team India sponsor too

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After Spot fixing, the IPL drama took another dramatic turn with Sahara Pune Warriors, the league’s costliest franchise at US$370m (approx Rs 1,700 crore), announcing its decision to pull out of the T20 extravaganza.

Sahara announced that it would also withdraw from Indian cricket team sponsorship from January 2014. It clarified that its decision this time, unlike in February 2012, was not open to any negotiations as it felt badly betrayed by BCCI.


Sahara’s decision came hours of the BCCI encashing bank guarantees worth Rs 137 crore submitted by the group when it had bought the franchise. Sahara maintained that despite its repeated plea to BCCI to revise downward its franchise fee (because they had got just 64 matches instead of the promised 94 matches), it has been paying the full franchise fee of Rs 170 crore.

However, BCCI treasurer Ajay Shirke explained its decision saying, “Sahara was supposed to pay 15% of yearly franchise fee in January. They paid it late. And the remaining 85% was due to us before the first match. They didn’t pay that till the completion of the league matches. We had no option but to encash the bank guarantee.”

In a lengthy statement that betrayed its outrage and hurt, Sahara said it was no longer open to any negotiations with BCCI. “We would not keep the IPL franchise even if the entire franchisee fee is waived. It is the firm and final decision of Sahara to withdraw from IPL.”

Sahara pointed out that its bank guarantees were valid until May 2. However, BCCI didn’t encash it before that. Only after Pune Warriors had played its last game on May 19, did BCCI officers reach the bank to enchash the guarantees. Sahara claimed the BCCI threatened to take the bank concerned to court if the guarantee was not paid immediately.

Only a few days ago, Sahara chief Subrata Roy had approached IPL chairman Rajeev Shukla and told him that if BCCI didn’t agree for an arbitration on its demand for a lower franchise fee, it would “amicably exit IPL”, the Sahara statement said. But Shukla told Roy that BCCI would get back on this and until then the bank guarantees wouldn’t be touched.

The franchise fee had always been a contentious issue between Sahara and the board ever since they bought the team ownership rights three years ago. Sahara kept demanding that the franchise fee should be recalculated.

“In 2010, Sahara had bid Rs 1,700 crore for the franchise on the basis of revenue calculation on 94 matches. It was a trick on the part of BCCI to put the number in media as 94 matches for getting a bigger amount. We got 64 matches only,” the statement said. “We and the Kochi team (also bought at the 2010 auction) immediately protested and requested the BCCI to reduce the bid price proportionately for a viable IPL proposition. Nothing happened,” the statement said.

BCCI countered this saying there was never any promise about the number of matches. “In the bid document and contract drawn between the board and Sahara, there is no mention of number of matches. That has always been BCCI’s prerogative,” BCCI treasurer Ajay Shirke said.

Sahara said in its statement that arbitration was the way forward, and in the past too and several names, including a Supreme Court chief justice’s name, had been suggested by it. But BCCI continued to disagree with the suggested names of arbitrators. Shirke, however, said, “Our nominee was not agreeable to them and theirs not agreeable to us.”

“Section 11 of the arbitration act has a provision that one party can go to court and seek an arbitrator. The court generally grants one in a couple of hearings. And that decision (selection of person) is binding on both parties. But Sahara didn’t choose that option,” Shirke added.

Shirke said the interest of Pune Warriors’ players will be protected as BCCI have yet to disburse central revenue of each franchisee (share of TV rights money etc). “That amount is more than Rs 60 crore. That should suffice to settle players’ remuneration.”

“We have contingency plans ready,” said Shirke. “If we reach the stage of finding a new team, we will float a tender. That new franchisee may or may not choose Pune as their city.”

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