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IPL: BCCI cannot sign contracts in interim period

By Sapna Nair , afaqs!, Mumbai | In Media Publishing | March 18, 2009
The Bombay High Court has reserved its decision on the BCCI-MSM legal suit till it goes through the documents

The second season of the Indian Premier League is going through a rough patch. First, its very existence is at stake due to its dates clashing with the general elections. On top of it, the tournament is now fighting a legal battle with Multi Screen Media (earlier Sony Entertainment Television) over the telecast rights.

Multi Screen Media (MSM) had bagged the telecast rights for IPL for 5 years.

All was well between the organisers of IPL and Multi Screen Media (MSM) in the first year. However, the two parties have been involved in a scuffle for the last two months. The first reason is the loss of one of the biggest sponsors of the tournament - Big TV, the DTH (direct to home) arm of Reliance ADAG, which had invested Rs 137 crore in IPL as the ground sponsor.

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Big TV pulled out of the four year deal last month, accusing MSM of getting on board rival DTH operator Airtel digital TV at a far lesser price. Besides, Big TV also cried foul over MSM not consulting it before signing the deal with Airtel as the former has the first right of refusal, being the ground sponsor.

This caught the ire of the BCCI. The cricket body reportedly asked MSM to compensate for the huge revenue loss as a result of Big TV's exit.

Last weekend, BCCI sent a termination notice to MSM with the intention of ending the contract with the broadcaster. On March 15, MSM moved to court against the BCCI for terminating the telecast rights without prior notice. In the meanwhile, it is learnt from media reports that IPL organisers are scouting for another broadcaster to air the tournament.

WSG was holding discussions with other broadcasters until MSM obtained an injunction from the Bombay High Court restraining the BCCI from discussing telecast rights with any other broadcaster. "We will look for new broadcasters; right now, we are waiting for the court hearing to reach a conclusion," said a top official from WSG.

On March 16, the IPL organisers asked for a day to present their case. On March 17, the court heard both the parties, but reserved its decision till it goes through the documents.

Sony argued that a notice cannot be effective unless it is received by the concerned authority of the channel and that the BCCI did not give the three days window before approaching other networks. It also accused the BCCI of entering into a new deal with WSG by which it can get into a discussion with another broadcaster.

On the other hand, the BCCI stated that the required notice period was served.

The judgment will be delivered in due course or uploaded on Bombay High Court's website. BCCI can't sign any new agreements in the interim period.

An industry source believes that it is too late for the BCCI to get another broadcaster on board. Max has signed almost 70-80 per cent air-time deals with advertisers and has already raised about Rs 200 crore of the Rs 350 crore planned in ad revenue. Huge promotions and marketing initiatives have been implemented by the channel. Besides, there isn't really another sports broadcaster who could bag the rights.

"ESPN-STAR Sports has just got the ICC rights, Zee Neo Sports or Ten Sports are not even in the fray. So, unless it is one of the other big networks, it seems difficult to find another channel to acquire the telecast rights," the source clarifies.

WSG had bought IPL's global broadcast rights from the BCCI last year for 10 years.