TV RIGHTS DEAL – KEY FACTORS
1. Existing agreement between Taj TV (Owning company of Ten Sports) Dubai and SLC signed on January 29, 2009 for host broadcasting rights for the period April 1, 2009 to March 31, 2013. 2. The contract was worth US $ 67,874,000. 3. SLC was governed at the time by Sports Ministry Secretary S. Liyanagama who acted as the SLC Competent Authority. 4. Clause 2.6 of the agreement states that six months prior to the expiry of the contract, negotiations should commence between SLC and TAj TV for a period of 60 days to determine the award of rights for the next term. 5. If negotiations with Taj TV fails, SLC can negotiate terms with another TV company or can call for tenders. 6. SLC agreed to a request by Taj TV to extend the negotiation period to December 31, 2012. 7. SLC top officials and Taj TV officials had an official meeting on November 26 at SLC headquarters. 8. Taj TV officials draw SLC attention to the clause 4.7 (ii) of the agreement, under which SLC had failed to deliver two Triangular series involving India as scheduled and which have to be delivered to them during the next contract period, even if SLC TV rights go to another party. 9. As realistically no other bidders would sign a deal without Indian tours, SLC Secretary Nishantha Ranatunga requests the Minister to get Attorney General’s views on whether to negotiate with Taj TV or call for fresh tenders. 10. Negotiation period with Taj TV extended to January 15, 2013. 11. Without in-bound Indian tours, TV rights would only fetch a minimal bid. 12. The next scheduled Indian tour will happen only in 2017, so signing another four year deal was not financially viable for SLC. So, they opt to go for a seven year period, but even within that period Ten Sports will have the rights of the Indian tour, putting realistically as the best candidates.
13. Any deviation from the previous agreement make Taj TV likely to invoke arbitration, obtain a court stay order for tendering for an Indian series resulting in problems for SLC like cash flow, Legal fees with likely financial damage in a massive scale which financially weak SLC cannot face.
14. SLC informs the Minister of these facts.
15. At a meeting on January 13, Taj TV agrees to a binding price of US $ 60 million for the TV rights for the next seven years from April 1, 2013 to March 31, 2020.
16. Ten Sports also undertakes to meet the production cost which is estimated to total as much as US $ 20 million. SLC estimates the offer by Taj to reflect a 40 percent increase compared with the previous contract.
17. Taj TV writes officially to SLC on January 11, 2013 asking for SLC confirmation to the agreement to finalise and conclude the deal by January 15. “We Thank You for the spirit in which these negotiations were carried out” Taj TV tells in their letter to SLC Secretary Nishantha Ranatunga
18. Deputy Solicitor General Viraj Dayaratne informs Sports Ministry Secretary on January 21, 2013 that “it will be improper for the Hon. Attorney General to advice Sri Lanka Cricket at this stage” as the agreement had been approved by private lawyers. 19. SLC CEO Ajit Jayasekara informs the AG through the Sports Ministry on February 6, 2013 that one of the two Indian tours has been delivered and only one Indian tour remains to be delivered to Ten Sports 20. On the same day, AG’s department writes to Sports Ministry Secretary to say that the due Indian tours have to be delivered to Taj TV and gives the opinion that SLC can call for bids if the negotiations with Taj have failed.
21. Sports Minister Mahindananda Aluthgamage orders SLC on the same day (Feb 6) to call for worldwide tenders as per government guidelines and informs SLC not to include the 2017 Indian tour in the tender.