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| Sony takes WSG to court |
| BS Reporter / Mumbai Jun 27, 2010, 00:40 IST |
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Alleges had no role in acquisition of IPL broadcast rights from BCCI.
Multi Screen Media (MSM, earlier Sony Entertainment Television) has filed a suit against the World Sport Group (WSG) in the Bombay High Court for misrepresenting its position as the media-rights owner for the Indian Premier League (IPL) matches. The issue flared up after the Board of Control for Cricket in India (BCCI), the parent of IPL, raised objections over the payment of a “facilitation fee” of Rs 425 crore by MSM to WSG. The Board said it was an improper payment and the money rightfully belonged to BCCI which held the rights for the IPL matches.
“BCCI has informed us it is not aware of any facilitation service provided by WSG for procuring the media rights to IPL and that WSG had no role to play in the grant of the Indian sub-continent media rights by BCCI to MSM. BCCI has disclosed certain facts that confirm the broadcast rights were exclusively with it (BCCI) immediately prior to and at the time of the grant of the rights by BCCI to MSM,” MSM said in a statement.
“WSG misrepresented its true position in relation to ownership of the media rights. We believe WSG committed questionable acts of inducement, which entitle MSM to lawfully rescind the agreement with WSG,” MSM said in the statement. It added it would claim back the payment of Rs 125 crore made to WSG and will not pay the balance Rs 300 crore, which it was required to pay in eight installments over the next seven years.
Email sent to the India officials of WSG went unanswered. However, Press Trust of India published a statement from the company which said: “WSG is surprised by today'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 claim which may be made by MSM against us.”
There had been a roaring controversy surrounding the media rights and the facilitation fee as it was alleged by BCCI officials that there had been financial irregularities in the media-rights deal done by Lalit Modi who was later suspended from his position as the IPL chairman on April 25.
The controversy surrounding the facilitation fee had come to light when WSG claimed to be the original buyer of the worldwide telecast rights of IPL for 10 years (2008 to 2017), at a cost of over $1 billion. MSM had secured the rights to broadcast in India for five years (2008 to 2012) from WSG and had the option of securing the rights for the remaining five years (2013-2017) by paying an option fee of $25 million.
However, BCCI cancelled the original rights deal in 2009 and renegotiated it with WSG. As MSM wanted direct contract with the Board, it negotiated a deal with BCCI for the same price and duration as WSG, in lieu of WSG relinquishing its rights. The nine-year deal was worth Rs 8,200 crore.
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