Are the IPL’s Internet and Mobile rights holders jinxed, or is it just a bad business to be in? Elephant Capital has decided to exit its investment in Global Cricket Ventures, a company that was the exclusive licensee of the online and mobile rights for the Indian Premier League. The fund plans to sell its 47.06% stake in GVC for GBP 1.934 million (31 August 2010), compared to the GBP 5.949 million it paid for the shares, thus taking a write down of GBP 4.015 million. Global Cricket Ventures had sublicensed rights from World Sports Group, and with the BCCI rescinding its deal with WSG, GCV was affected as a result. The big question, though, is: What does GVC have to sell, if it doesn’t have the rights?
Global Cricket Ventures’ Cup Of Woes
MediaNama readers will recall that GVC had acquired these rights when it was formed as a a joint venture between Live Current Media and the still-barely-known NetLinkBlue Holdings. Live Current Media eventually exited the venture, in the process, losing money for its shareholders, and the domain name Cricket.com as well. The Cricket.com domain itself is currently facing a cybersquatting challenge, and GVC’s cup of woes runneth over. It doesn’t help that Gaurav Burman, MD of Elephant Capital, is the son-in-law of Lalit Modi, the former Chairman of the Indian Premier League. Modi, who founded the IPL is accused of nepotism and corruption by the Board of Control of Cricket in India (BCCI). Do read this great writeup about Modi and the IPL at The Caravan.
In its statement of its annual results, Pramath Raj Sinha, Chairman of Elephant Capital, writes that “The revised valuation of GBP 1.9 million represents the best estimate of net assets of GCV attributable to Elephant Capital’s shareholding in GCV. The Board is currently in discussions to exit its entire investment in GCV. Shareholders are reminded that the final exit value on this investment cannot be certain until this process is complete,” Sinha writes. Note that Elephant Capital had acquired 50%, but states that its shareholding was diluted subsequently.
– GVC was essentially about trading of rights: the business had sublicensed Internet and Mobile rights to the IPL, then sublicensed those to companies like vRock Mobile, which then sublicensed them to others. It ran IPLT20 for the IPL, but that property was still owned by the BCCI. In that sense, it faced the same problem that any vendor faces – that they don’t have the ownership of rights, which can always go to the highest bidder. The filing also states that the BCCI informed GCV that it would no longer be honoring its arrangement with GCV to build, host and manage the CLT20 (Champions League T20) website.
– This also impacts other vendors who had sublicensed rights to the IPL from Global Cricket Ventures. There’s a list here.
– If GCV no longer has rights, then the IPL will probably issue rights to a fresh set of licensees. Expect a mad-dash for rights after the Cricket World Cup is over.
Global Cricket Ventures, Elephant Capital & Willow.tv
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– July Systems Expects Double Digit Million Revenues; Equity Deal With GCV
– Global Cricket Ventures Doesn’t Know If It Still Has CLT20, IPL Digital Rights
– LCM President Mark Melville Resigns; To Join Global Cricket Ventures
– BIG Entertainment Didn’t Acquire A Stake In Willow.tv
– Global Cricket Ventures Raises $10M From Elephant Capital
– Live Current Media Sells IPL Portal Rights, Cricket.com; Exits Cricket Biz
– IPL Portal Rights Deal Negotiated Down From $49 Million To $20.75 Million
– LCM & NetLinkBlue Yet To Assign IPL Digital Rights To Global Cricket Ventures; BCCI & IPL Payout Details
– 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
– BCCI.tv Launched By Global Cricket Ventures, A Live Current Media – NetlinkBlue JV
– July Systems, Indiagames, GoBindaas Ink IPL 3 Deals; Complete List Of Mobile Partners