BCCI was concerned about financial status of Nimbus
Numerous payment problems, questions about their lack of funds and repeated demands to include a Pakistan series are some of the factors the BCCI considered before it decided to terminate its contract with Nimbus Communications.
Numerous payment problems, questions about their lack of funds and repeated demands to include a Pakistan series are some of the factors the BCCI considered before it decided to terminate its contract with Nimbus Communications. The decision was taken by the board's working committee at a meeting held in Delhi on Monday.
"The board president [N Srinivasan] was worried about the capital of Nimbus and the fact that there is not much liquidity and this is a serious concern going forward," a senior BCCI official said. India are not scheduled to play any further international cricket at home until September 2012, and the official pointed out that the board was not confident Nimbus could sustain itself in the long run. Nimbus had renewed its contract with the BCCI in 2010, negotiating a four-year deal worth about Rs 2000 crores ($379.5 million).
The board was equally concerned by what they claim were Nimbus' regular defaults on payments. According to the contract, Nimbus were supposed to pay 50 percent of the amount before a series began and the remainder at the end. The board official claimed that Nimbus failed to do so on many occasions, including the last two home series played by India: the five-match ODI series against England followed by the recently concluded tour by West Indies that included three Tests and five ODIs.
Nimbus had asked the BCCI to give them a week's time to clear their dues after the West Indies series. It is understood that Nimbus had to make a payment of Rs 125 crores ($23.7 million), having already paid Rs 75 crore ($14.23 million). Reportedly, the BCCI had even booked rooms for Nimbus officials in Delhi, including for its head, Harish Thawani, to attend the working committee meeting. But to Nimbus officials' surprise, they started receiving calls from the media about the board's termination of their contract.
"They just terminated [the agreement] without even talking to us," a Nimbus official said.
However, the board official said the BCCI had lost its patience. "Though the default amount at the moment stands at below Rs 100 crores [$18.98 million], it is going to balloon to up to Rs 300 crores [$56.93 million] by February," the official said. According to him, that amount involves the combined payments for the home series against England and West Indies. "Nimbus can say that they had requested for a few days to clear the default. How much can we wait? We have been doing so for five years."
According to another official privy to discussions, another key reason for BCCI's decision was Nimbus' insistence that as part of the contract there had to be an India-Pakistan tour. "Of late they started to point out the Pakistan tour," the official said. "'You have to confirm to us that you are doing it. If not we have the right to claim something because we are paying the same money for a West Indies match and a Pakistan match' is what they kept telling the board."
This official claimed that Nimbus told the BCCI that they could make a substantial amount of money if the Pakistan series took place. But the official pointed out that a Pakistan tour was not in the hands of the BCCI as it is a political decision more than a cricketing one.
As a point of comparison, the first official cited the example of Multi Screen Media (MSM), which owns the broadcasting rights for the IPL. "MSM have never given us any cause for concern and have submitted the dues on their own. As far as the BCCI is concerned, Nimbus is history."
Another issue that came up was Nimbus' promotion of World Series Hockey, for which it has broadcasting rights, during the West Indies series. "Without our permission, Nimbus was promoting World Series Hockey,' the official said. "How can they do that, especially using us?"
On Thursday, the Bombay High Court ruled that the BCCI could not invoke bank guarantees worth Rs 1600 crores (approximately $300 million) given by Nimbus and the board is reported to be discussing how to recover that money with its legal team. The BCCI is also likely to hold a special working committee meeting where bids for a fresh broadcasting contract can be discussed.