Sahara Q&A

Q1. What did Sahara bid for the team sponsorship once again knowing that they have been in dispute with the BCCI already over the termination of the IPL team Pune Warriors? Sahara chairman had already pointed out in the past that it is not easy working with the cricket board.

A1. From the time, we first announced our disassociation with the BCCI, a number of cricketers had requested ‘Saharasri’ Subrata Roy Sahara to please continue with the sponsorship stating that they had donned the logo of Sahara on their chest for years and they want to retire with the same logo on their chest. There was strong insistence from various Indian cricketers. Still, we had no intention to bid for the sponsorship of India Cricket Team, till even 5 days back. But in the past couple of days, there were number of calls from senior cricketers (both past and present) and some senior members of BCCI to ‘Saharasri’. All of them vehemently requested him to continue with the sponsorship of Indian Cricket Team. Considering their insistence, we decided to bid for the sponsorship of the Indian Cricket Team.

Q2. Sahara picked up the tender document on Saturday and were told on Monday afternoon they are ineligible to bid. What happened on Mondaywhen Mr. N Srinivasan and the rest of the board members, along with their lawyers, met Sahara officials? What explanation did they give?

A2. At 3 PM Sahara, under its company Sahara India Financial Corporation Limited (SIFCL), & Star TV network submitted the closed bid including Eligibility requirement & Financial Bid towards the Indian Cricket team sponsorship to the BCCI committee at Park Sheraton Hotel, Chennai. The BCCI asked both the bidders to go out of the room so that they could evaluate the Eligibility Bid amongst themselves. Both the Bidders were kept out for an Hour while the eligibility was being evaluated Post this, only Sahara was asked to come inside the room. The Board told Sahara that they are ineligible because of their current dispute with BCCI towards the IPL Franchisee under Sahara Adventure Sports Limited. I myself representing Sahara told BCCI that the Bidding Company (SIFCL) is in no dispute with BCCI and has always paid towards all sponsorship obligations thus there is no reason for ineligibility.

BCCI then informed that the ITT has a clause which can bar even a group company from bidding incase any other group company is in dispute with BCCI. I asked BCCI that in that case why is BCCI till date accepting payment from Sahara towards Team sponsorship and then why is Indian Cricket team still wearing Sahara Logo on the clothing till date, even after the dispute o IPL franchisee which happened with Sahara Adventure Sports Ltd. To this BCCI did not had any suitable answer. Then Mr. N. Srinivasan said that “I can also speak about a lot of things that Sahara has said about us in the last few months”. Finally Mr. Sundar Raman again told Sahara that their Bid was Ineligible.

Q3. Does Sahara believe that BCCI deliberately found them ineligible so that they could hand over the sponsorship rights to Star? Did Sahara smell any foul play or favoritism towards one particular party?

A3. The reason of ineligibility for Sahara, as cited by BCCI, is that one of our company, Sahara Adventure Sports Ltd., which held the Pune IPL franchisee, is in dispute with the Board. The fact is that even when this IPL dispute was on-going, we had made regular payments for the sponsorship of National India Cricket Team. In fact, we have never defaulted on the payments. During all this period, BCCI had been accepting all the payments from Sahara India Financial Corporation Ltd. and our logo was very much present on the Team jersey even till today and shall remain till December end 2013. Our question is why all this while, BCCI didn’t found us ineligible as a sponsor. Even 48 hours before the bid, when we bought the bidding form and were discussing the various modalities continuously with the Board, even before 3:00 p.m. when we submitted our bid, they didn’t even once mention that Sahara is ineligible to bid for the sponsorship. It was during the bid only, that they mentioned for the very first time that Sahara is ineligible. It is very apparent to naked eye that BCCI had foul intentions and was making a mockery of the entire bidding process.

Q4. BCCI has accused Sahara of defaulting on payments and continuously missing deadlines. What does Sahara have to say about it?

A4. We have never defaulted even once on our payments. As mentioned earlier, even during dispute regarding the IPL Pune franchisee, we ensured timely and regular payments to BCCI for sponsorship of India Cricket Team. We have till now paid more than Rs. 1,000 crores to BCCI for Indian Cricket Sponsorship, since our association in 2001. This is apart from the Franchise Fee for Pune Warriors which Sahara kept on paying since year 1 despite being given false assurances of justice. It was only when BCCI defaulted on its promises that we were left with no option but to hold back the bank guarantee

Sahara had raised the issue regarding significant reduction in the number of matches which was one of the most important basis and criteria for the bid, since 2011. BCCI had made pre-bid representations that 94 matches will be held in every season and then arbitrarily reduced the number of matches from 94 to 74 & then 76. Sahara had placed its bid for the IPL franchise based on the representations of BCCI which were false. The reduction in the number of matches has had a substantial financial impact due to the reduction in the central revenues under the Franchise Agreement.

This is not the only time that BCCI has treated Pune Warriors India with disdain and in an unfair manner.  Right from day one, when the rule of player retention was altered prior to IPL Season 4 (which was the 1st year of PWI in the League) all our requests for seeking a level playing field by having an Open Auction for the players were turned down. The original Franchise document of 2008 had a provision of Open Auction every three years. Hence, when constituting a new team we were deprived of the opportunity to bid for players of the likes of Sachin, Dhoni, Sehwag, Watson, Malinga etc.

Despite assurances given in a meeting between Mr. Subrata Roy Sahara and Mr. N. Srinivasan, President – BCCI in February 2012, subsequent to which a joint media statement was issued whereby both parties agreed to start the arbitration proceedings to address Sahara’s claim for a reduction in franchise fee for 74 matches. However, in contravention of the understanding reached between the parties, no steps were taken by BCCI to address our long standing demand of the reduction of the Franchise Fee. In fact, far from starting the arbitration, BCCI has thwarted the process.

Even before the start of IPL 2013 season, ‘Saharasri’ Subrata Roy Sahara himself wrote to the BCCI President expressing his concerns. The BCCI President chose not to respond himself, instead deputing his agency to send a denial for consideration. Mr. Rajiv Shukla had met Mr. Roy before Season 6 and assured him that all issues will be resolved and requested him to be patient. When the Season was on, the payment of the last installment for the Season was discussed and every time Sahara was assured that the issue will be resolved and a mutually agreeable solution will be arrived at. However, again in stark contravention of the understanding and betrayal of trust, our Bank Guarantee was invoked. BCCI waited before conducting this act of betrayal because any such move midway through the tournament would have jeopardized their broadcaster commitments.   

This made it evidently clear that BCCI did not want to honour their promises. Therefore due to non fulfillment of reciprocal obligations of BCCI and failure to keep its promises as given in Feb 2012, Sahara was left with no option but to hold back the Bank Guarantee till promises and obligations were fulfilled. But instead of fulfilling its promises and obligations, BCCI went ahead and terminated the Contract, though itself it is in breach.

Q5. Going forward from question number 4, Bombay high court had asked Sahara to submit the bank guarantee proportionate to the reduced number of matches. Had the bank guarantee been provided, the dispute would have been settled. What does Sahara have to say about it?

A5. No. Sahara was asked to submit 80% of the total franchisee fee of Rs. 170 crores annually as bank guarantee. However, our contention was that in the past 3 years, we had already paid 25% extra per year which totaled to 75% of an annual payment. So this excess payment should have been considered as the guarantee, rather than a fresh guarantee of 80%. Moreover, it was an interim order and would not have settled the dispute.

Q6. Does Sahara believe Mr. N Srinivasan has anything in particular against them? Because in the past, Sahara has always enjoyed a cordial relationship with the BCCI and

Q10. What is wrong with Indian cricket administration as of today? Why are so many controversies coming out one after another?

A6 and A10. It looks like that BCCI is a promoter led private company which is working according to whims and fancies of one individual. It is very unfortunate that because of one man, the sport of cricket in India has to suffer. Our past experience with BCCI was of a Board keen to work and collaborate in the interest of the development of the game. Today, the title sponsorship has been given for Rs. 1.92 crore per match when our bid price was Rs. 2.35 core, per match.

Q7. Sahara was paying Rs 3.34 cr per match for sponsorship of the Indian team.  With Star bagging the deal for so less, having the rights been undervalued? Sections of the sports industry believe Sahara was over-paying.  What does Sahara have to say about it?

A7. I don’t think so. Infact, I believed that this time, they have undervalued the amount. As for our earlier bid, when we won the sponsorship in 2010 for Rs. 3.34 crore per match, Sachin Tendulkar, Rahul Dravid, VVV Laxman, all were in their peak during that time and the World Cup was also about to happen in 2011 in India. The base price that time was Rs. 2.5 crore. Also the cricket viewership in recent times has dropped and in the meanwhile other sports like Hockey, Badminton, etc. are gaining popularity along with development of celebrities in other sports.

Q8. Will Sahara associate itself with Indian cricket any more in the future?

A8. We have certain big plans for promotion of various sports including cricket in India, which will be shared by ‘Saharasri’ Subrata Roy Sahara at an appropriate time.

Q9. Does Sahara believe that they overpaid to buy Pune Warriors? Is that where all the trouble with BCCI begin?

A9. Our IPL bid for Pune franchisee was based on the BCCI’s pre-bid representations that 94 matches will be held in every season. Later, BCCI arbitrarily reduced the number of matches from 94 to 74 & then 76. In addition to that, we were not given level playing field by not having an open auction. This reduced our access to ace players. Hence, it affected our on-filed performance as well as marketability of the franchisee. This along with other issues of uneven treatment made the franchisee unviable for us.