As indicated on Wednesday, the Kochi IPL franchise has got a reprieve from BCCI.
Although the franchise has been served a 30-day termination notice, it is clear that the Kochi team got some breathing space by offering a late-night compromise formula that promises to maintain its ownership sanctity.
According to sources, the board was all set to throw out the team as the warring groups one led by the Gaikwads and the other by the investors didn’t show any sign of resolving their differences. They feel that even after 30 days the deadlock will prevail.
“If they don’t sort out their problems, on the 31st day the franchise shall stand terminated,” BCCI president Shashank Manohar said after the IPL’s governing council meeting on Wednesday.
The Gaikwads, though, are treating this reprieve as a lifeline and are confident of arriving at an acceptable agreement. “We are absolutely confident that we will resolve the differences,” Satyajit Gaikwad, CEO of Rendezvous Sports Private Limited, which owns 25% free equity and 1% paid equity, said.
Interestingly, both had sent separate replies to the board’s showcause notice, prompting Manohar to declare that the consortium has not been able to arrive at a settlement. One official even said: “It is an irretrievable situation.”
The board, however, could not axe Team Kochi like it had done with Rajasthan Royals and Kings XI Punjab, as it has not committed any irremediable breach. “It is just an internal dispute, a remedial breach, and therefore we have only invoked Clause 12.1 of the agreement (between BCCI and Rendezvous Sports World). We had to give them 30 days to sort the problem out,” said the president.
Late on Tuesday night, the Rendezvous investors climbed down from their adamant stand (allowing only 5% free equity and 5% paid equity to the Gaikwads) and offered 12.5% free equity to them, with the option to buy out the remaining 12.5%. This was seen as a workable solution for all as the Gaikwads have been more than willing to buy out their entire free stake.
Manohar, though, didn’t dwell on this option, leaving speculation open if it would or would not make a material difference to the ownership pattern, the bone of contention within the group. However, the two factions are still not on the same page, with both demanding control over the cricket operations.
The board denied that Kochi was being given a longer rope than the two axed teams. “In case of Rajasthan Royals and Kings XI Punjab, the breach was irremediable. But with Kochi there’s nothing wrong, except that they are fighting over issues that can be resolved. Both parties are keen to hold on to the franchise. The rule (clause 12.1) says they need to be allotted 30 days in this case and that’s what the board has done,” said Manohar.
The board refused to go into the details of Kochi UJV’s shareholding. “That is their internal problem and we’re not going to get into that. If they can arrive at a solution and come to us then we have no problem. Right now, we don’t even know who we have to deal with and it doesn’t work that way,” Manohar said.
Other than the overall control of the franchise, another problem is plaguing the Kochi team: the funding process. If the board does allow the Gaikwads to convert their 12.5% free equity into paid equity, some are skeptical about the source of funding.
“Tomorrow, nobody wants the Enforcement Directorate (ED) coming into the picture and investigating the source of the money,” an official said.
The Gaikwads, though, call these doubts defamatory and are confident that they’ll raise the money through proper resources. “Maybe an inter-corporate loan,” says an insider. But it is not yet clear if the BCCI will accept it.
The board has certainly had enough of Kochi’s problems though. As one official puts it, “if not for the agreement that allows a franchise, facing a remedial breach, 30 days to try and resolve issues, the board would have gone ahead and sacked them.” Either ways, the board does seem to have a backup plan: if Kochi has to be terminated, it will go ahead and have a re-auction for the eighth team.