Join Date: Jan 2008
BCCI terminates Deccan Chargers franchise.
The BCCI has terminated the troubled Deccan Chargers franchise, winners of IPL 2009, after an emergency league governing council meeting in Chennai on Friday. Senior BCCI officials told ESPNcricinfo that the tender for a new franchise would be issued on Saturday.
A BCCI statement issued late on Friday night said the board's action came after what it called a "sudden change of stance by the franchise" regarding its commitments and the board's belief that any further extension of time to the franchise owners would "seriously prejudice the interests of the players."
"This evening, the BCCI received a lawyers' notice invoking arbitration from the franchise stating that it had not committed any breaches and even if such breaches were committed, the BCCI should not act to terminate the franchise till Yes Bank Ltd furnishes sufficient finance to cure the breaches," the statement said. "By this, Deccan Chronicle Holdings Ltd has clearly admitted its inability to cure its breaches within the time stipulated in the BCCI notice despite every bit of assistance from the BCCI. Since the month of May, BCCI has received repeated assurances that the overdue player fees would be paid; all of these promises have been unfulfilled.
"Considering the stated position of the Deccan franchise to refuse to rectify the various defaults including payments to players, foreign Boards etc, as also the deleterious effect such conduct would have on the reputation of the IPL and the franchise itself, a decision was taken to forthwith terminate the Deccan Chargers franchise."
The BCCI marketing committee is scheduled to meet in Chennai on Saturday morning to discuss and finalise the tender to add a team to the IPL. A board official said there would be a shortlist of cities for the bidders to choose from, with the location of the new franchise to be decided by the highest bid for one of those cities.
The fate of the players is not yet clear; they might be retained by the next buyer or be put up for auction for the other IPL teams. Chargers' squad boasted some of the world's top current players, including Dale Steyn, Kumar Sangakkara, Cameron White, Ishant Sharma and JP Duminy. The coach is the Australian, Darren Lehmann.
Deccan's IPL history summed up the romance of cricket; bottom of the league in their first season, they came together in 2009 under Adam Gilchrist to win the tournament in South Africa. Their performance in subsequent seasons, however, has been below-par.
Friday's developments bring the curtains down on an issue that has dragged on for three-odd months after the team's owners, Deccan Chronicles Holdings Limited (DCHL), ran into financial problems. Last month, the banks knocked on the BCCI's doors to help them out, after which the board had set a deadline of September 15 for Chargers to clear all their dues including player payments and report with a clean slate. However, DCHL said they were unable to sort out the problems and formally placed the team up for sale on September 6.
The owners and the BCCI set September 13 as the auction date but received only one bid, for Rs 900 crore ($164 million) from PVP Ventures, a Hyderabad-based urban infrastructure and film production company. DCHL rejected the bid as it considered the price and terms unsuitable but the BCCI may now offer PVP a second chance to buy the team.
DCHL had till 5 pm on Saturday to come up with a solution but the termination one day ahead implies they had informed the BCCI about their inability to do so.
Interesting this, because Deccan and their lenders rejected a bid higher than initial buying amount only a day ago -
Deccan Chargers reject sole bid for franchise.
The auction for the IPL Deccan Chargers franchise on Thursday has ended in an anti-climax with the team's owners rejecting the sole bid they received. This leaves the franchise's future up in the air, with the BCCI 's working committee meeting on Saturday likely to take a decision on its next course of action.
The solitary bid reportedly came from PVP Ventures, a company that finances film projects in India. No details were made public but reports said the offer was for Rs 900 crore ($164 million). Only three bidders had evinced interest to buy the Chargers: besides PVP Ventures, RPG Group and Jaypee Group also bought the bid document. However on the day of the auction only PVP turned up.*
"They [the franchise] informed us that the price and terms were not suitable so they did not accept it," BCCI president N Srinivasan said in Chennai. "The BCCI assisted the Deccan Chargers and we also looked at the eligibility criteria, whether they were fit and proper. We found that the party was acceptable to us. After that, though, it was between Deccan Chargers and the bidder."
Today's development puts the ball squarely back with the BCCI, which could conceivably terminate the agreement with Chargers and put the players on the auction block. Though no decision has formally been taken, it is understood that the board has lost patience with Deccan Chronicles Holdings Limited (DCHL). Its plan for the way forward could include terminating the contract with Chargers and floating a tender to add a new team to the IPL. There would be a shortlist of cities for the bidders to choose from, with the location of the new franchise to be decided by the highest bid for one of those cities.
"DCHL have been been found out for various violations," a board official told ESPNcricinfo. "The BCCI tried to pitch in and help but that has not proved useful. The board needs to protect the IPL model and a new franchise can only enhance the IPL."
If the board does scrap Chargers' contract then it will encash the bank guarantee of the franchise to settle the dues of the players. Most players and coaching staff are reportedly yet to receive 85% of their contracted amount.
A positive outcome today could have changed that but it is understood that while DCHL were happy to go with the offer, the company's lending banks, rejected it. "The lenders [banks] and the owner [DCHL] could not come to an agreement over the mode of payment proposed by the bidder," the official said.
The official said the banks were not happy with PVP's plan to divide the bid amount in two parts over the next ten years. "They said they would pay Rs 450 crores ($82 million) in the next five years, at the rate of 90 crore per annum, and the rest in 2022," the official said. The banks' reluctance, the official said, could stem from the fact that they stood to receive the sale proceeds - which, in this case, would be staggered.
Last month, the banks had knocked on the BCCI's doors to help them out, after which the board had set a deadline of September 15 for Chargers to clear all their dues including player payments and report with a clean slate. However, DCHL said they were unable to sort out the problems and, after seeking the board's intervention, placed an advertisement announcing that the franchise was for sale.
The board official said that Chargers still had two days' time to figure out their final decision: "The [BCCI] decision could depend on what the Chargers report on Saturday."
Thursday's development is a harsh reality check for the IPL, whose valuations across several properties and deals had brought the BCCI, its owners, more than $2 billion. Mumbai Indians were the costliest franchise at $111.9 million in the first team auction in 2008, with Chargers third at $107 million; just two years later, the Sahara group successfully bid $370m for Pune Warriors while the Kochi franchise, now dissolved, fetched $333 million.
Now, however, franchises are experiencing operational difficulties vis-à-vis the IPL. Chargers and Royal Challengers Bangalore have delayed payments to their players; some franchises with multiple owners are reported to be looking at selling stakes to raise funds.