Live Current Media (LCM), which owns hundreds of domain names, including Cricket.com, had acquired portal rights to the Indian Premier League (IPL) to develop it as a separate business, and consequently acquired rights to manage the IPLs Cricket websites. 

Given that the deal with the BCCI was inked just days before the first edition of the IPL began, and the Champions League T20 was cancelled following the attacks in Mumbai, LCM ended the 2008 fiscal with barely any revenues from their Cricket deal, with most of their revenues coming from Perfume.com. LCM subsequently renegotiated their agreement with the BCCI, and invested in setting a joint venture with NetLinkBlue Solutions (NLB), thus combining its portal rights with the live streaming and mobile rights that NLB brought to the table.

In its 10K filing with the USAs SEC, Live Current Media has disclosed details of its deal with the BCCI, IPL and NetLinkBlue; in particular, the following:

Live Current Medias Deal With The BCCI And IPL

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Components Of Payout

— Annual Fee: the BCCI was to be paid a minimum annual fee of the greater of 50% of all revenues generated from the Cricket Websites or an average payment of $3 million per year. The IPL was to be paid a minimum annual fee to the IPL of the greater of 50% of all revenues generated from the website or an average payment of $2 million per year. The minimum annual fee was to be paid on a quarterly basis during the first 3 years of the term.

The first payment to the BCCI of $625,000 was due on October 1, 2008, with additional payments of $625,000 due on January 1, 2009, April 1, 2009 and July 1, 2009.  The first payment to the IPL of $325,000 was due on October 1, 2008, with additional payments of $325,000 due on January 1, 2009, April 1, 2009 and July 1, 2009.

— Additional Fee: A total of 5% of the revenues generated by the Cricket Websites would be paid to the BCCI and the IPL. This did not include revenues earned from the sale of tickets to the matches. 

Renegotiation Of Payments:

While this is the original schedule of payments, MediaNama readers will remember that in November last year, given that Live Current was unable to monetize the first edition of the IPL, the company negotiated a reduction in payout to the BCCI by $1.25 million: the October 1, 2008 payment was decreased by $500,000, to $125,000, and that the payment of $750,000 that was due to be made on October 1, 2009 was eliminated entirely.  There was also a mention of no minumum guarantees for the Champions League T20, which was eventually postponed.

Do note that the amounts due to the IPL have not changed, and no formal amendment to the MOU (with the BCCI) has been executed. The payments due to the BCCI and the IPL for the October 1, 2008 commitment have not been made to date.  

The parties are currently discussing possible changes to the timing of the payments, but no formal agreement has been reached. 

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Global Cricket Venture: Combines Portal, Live Streaming And Mobile Rights

LCM signed a Memorandum of Understanding (MOU) with Netlinkblue, which had acquired the live streaming and mobile rights to the BCCI and IPL cricket matches. The company,  Global Cricket Venture Pte. Ltd, was incorporated in Singapore on June 10, 2008. Live Current Media is entitled to a 40% equity interest in Global Cricket Venture, though it was given 50.05% of the shares when the company was formed. The broker for the JV has an option to acquire 6% of the shares of GCV, though all voting rights associated with the shares will vest with LCM.

Interestingly, it appears that the parties involvedi n the JV have not yet assigned their rights to Global Cricket Venture. LCM has incurred costs of approximately $1.47 million related to setting up the Cricket business – business deelopment, product development, travel, consulting and salaries, and the setting up of the GCV joint venture. They have also expensed an additional $1 million owed in total to the BCCI and IPL for the October 1, 2008 minimum payments.

GCV has not yet obtained funding.  

Revenues, Financing Issues and Cost Cutting

They decided to sell non-core domain names to raise much needed funds – selling one domain name for Canadian $ 500,000 in the 2008 fiscal, and subsequently two more for USD$1.65 million. The company says in the filing that given the steep decline in their share price, any fund raising would have resulted in a significant decline in shareholding.

To cut costs, the company instituted layoffs, with former President and COO Jonathan Ehrlich exiting, and consulting and invester relations contracts being terminated. Ehrlich, incidentally, was among those who survived the Mumbai attacks. LCMs CEO C. Geoffrey Hampson has also agreed to defer all of his salary indefinitely. 

Our Take

There is significant risk since the reduced payout is yet to be formalized, and digital rights not yet transferred by LCM and NLB to Global Cricket Ventures. The payouts due to the BCCI remain significant, but it is worth noting that the portal rights have earned LCM only 40% equity in GCV — the streaming and mobile rights are with NLB, which, it appears, will own the rest until further dilution. 

With the IPL set to begin in a couple of weeks, this lack of closure does not augur well for LCM. We’re wondering if Global Cricket Ventures is adequately prepared to leverage IPLT20.com. Do note that while they do have the official portal, which will be marketed by the BCCI, other, more established entities like Cricinfo and CricketNext, apart from media publications, do have access to the IPL. This IPL season appears to be make-or-break for LCM, which has already suffered because of the postponing of the Champions League T20.

More info at: 10K Filings for Live Current Media

Related:

— In Dire Straits, Live Current Media Raises $2 Million; No MG for CLT20
— Live Current Media Negotiates Reduction In BCCI Payouts By $1.25 Million For This Year And Next
— Global Cricket Ventures Moves Fantasy Cricket Game Out Of Facebook, To Cricket.com
— BCCI.tv Launched By Global Cricket Ventures, A Live Current Media – NetlinkBlue JV