Indian cricket loses its Sahara
Sahara group chairman Subrata Roy insisted that the beginning of their association with cricket a decade ago was primarily emotional. He once again invoked the emotional card on Saturday when he announced the company's decision to end its association with the Board of Control for Cricket in India (BCCI) and the Indian Premier League (IPL).
The announcement would bring an end to Sahara's 11-year association with the Indian cricket team as sponsors and also put the future of the players in the Pune Warriors India team in jeopardy.
The Sahara Group had signed a new sponsorship deal with BCCI in July 2010 and bought the Pune franchisee for Rs 1702 crore in the same year after petitioning the erstwhile president Shashank Manohar to change a clause in the bid document that had made them ineligible for the auction.
Sahara Adventures Sports Limited, which owns the franchisee, surprised everyone by pulling out of the auction in Bangalore on Saturday morning and immediately issued a media release stating their decision to severe ties with BCCI and utilize Rs 1000 crore for other welfare and development initiatives.
Later explaining the reasons behind the decision at a media conference, Roy declined to pin point one reason that triggered the break off. "Health of any relationship depends on mutual respect…. We had enough of it. Any relationship does not break on one single issue. It has to do with many issues that have happened continuously," he said, adding, "The BCCI is a very authoritarian and one-sided."
Sahara's unhappiness with BCCI dates back to 2008 when the company's bid for an IPL franchisee was rejected on a technical ground. There have been a few skirmishes thereafter, including an attempt to keep them out of the second auction for two new teams and retention of players by the eight existing franchisees ahead of the fourth edition.
However, the immediate trigger turned out to be the IPL governing council citing the rulebook while rejecting the group's request for an added auction purse of $1.8 mn to compensate for the absence of Yuvraj Singh on health grounds. “I was in touch with the BCCI president (N Srinivasan) till last night and my son (Sushanto Roy, Managing Director, Sahara Adventure Sports Limited) met the officials in Bangalore. We were expecting a favourable decision till this morning and then decided to pull out after natural justice was denied to us.”
Roy said the company would continue to sponsor the national team for next few months to allow BCCI time to find a new sponsor and request the sports apex body to find a new owner for the team.
He was, however, non-committal on whether they would re-think their decision. “I am not rigid but it probably won't work. I am very flexible, especially when it comes to the players. But I can't tell you anything because there are many players, including BCCI, are involved.”
Is money the issue?
Sahara Group's decision to sever ties with the Indian Premier League and the Cricket Board has triggered speculation about whether the conglomerate was trying to cut costs due to financial problems.
Ad-film maker and media expert Prahlad Kakkar was one of those who thought so, saying no team was making money from IPL. “The main reason why Sahara is backing out is because I think they do not have any money. They had to sell off their airlines as well, as they were losing money. None of the IPL teams anyway earn much money. You need to have deep pockets to maintain these teams and if you cannot, it is best to back out. Apart from Shah Rukh's KKR, no other team made much money. KKR made money because of endorsements,” Kakkar said.
However, Sahara Group chairman Subrata Roy dismissed the suggestion saying if that was the case, they would not have announced a Rs 1000 crore plan focusing on promoting sports in rural India and providing funds for welfare projects.