Cricket South Africa (CSA) chief executive Gerald Majola placed the body and its provincial member unions at serious financial risk when he signed the agreement to host the Indian Premier League (IPL) in 2009, allegedly without consulting his board or finance committee.
On the face of it, the contract strongly favoured the Indians, who had approached South Africa at the 11th hour to host their tournament amid election security concerns back home.
The contract conditions raise more questions about Majola’s apparently conflicted role, in light of the R1-million-plus bonus he quietly and controversially pocketed from the Indians after the tournament.
According to the contract, a copy of which the Mail & Guardian has obtained, Majola signed off “unrestricted and exclusive access” to South African cricket stadiums including all hospitality boxes, branding rights, vending rights, concessions and broadcasting space and facilities.
The contract initially infuriated provincial cricket unions, famously the Gauteng Cricket Board, which at the time said it compromised existing agreements between South African cricket sponsors, box-holders and the stadium owners, exposing the board to serious financial loss.
The IPL agreement and the circumstances of its signing are still causing ructions in South African cricket.
CSA president Mtutuzeli Nyoka claimed last month that Majola had lied about the IPL bonus and another from the International Cricket Council, while facing a rebellion from within CSA himself.
In signing the contract Majola handed the IPL’s owners, the Board of Control for Cricket in India (BCCI), lucrative and total stadium access for every day of the five-week tournament.
Following the tournament, the BCCI paid Majola and his chief of operations, Don McIntosh, bonuses of R1.1-million and R798 000 each, creating suspicions of a conflict of interest amid accusations that the chief executive had failed to negotiate the best deal possible for South African cricket.
There is no discussion of these or any bonuses in the signed copy of the contract seen by the M&G.
The IPL contract demanded all existing branding be removed from stadiums, saying: “The entirety of the exterior and interior shall be provided … free and clear of any third-party branding of any kind whatsoever.”
BCCI demanded first right to sell or use all hospitality boxes, after which existing box-holders — who usually rent the space for two to three years at a time — would be offered the chance to use them, but only on the Indian organiser’s terms.
In addition to unfettered stadium access, CSA was responsible for managing the tournament on the Indians’ behalf.
This included all staff, infrastructure, logistics, security, licences and accounting.
BCCI meanwhile retained “all rights of any kind in relation to IPL”.
In the event of a dispute, CSA would not have access to South African courts.
The contract states that the agreement “shall be governed by and construed in accordance with Indian law and any dispute which arises in connection with [it] shall be decided by arbitration in Mumbai”.
In return for providing the stadiums and hosting the tournament, CSA would be paid a fixed-fee of $3- million and $2.5-million for budgeted expenses, but the budgeted amount could not be amended in the event of cost overruns.
Majola later negotiated a slight fee increase. This pales in comparison with the IPL’s apparently staggering income. In that financial year, its second, it more than doubled its brand value to $4.13-billion.
A number of sources have said that Majola signed the contract behind closed doors.
“It didn’t go through anyone. It was virtually a one-man show,” said a former cricket official, who knew of no one other than Majola who had read the contract on CSA’s behalf before he signed it.
“[The contract] compromised all the provinces; they gave away all our rights,” said the official.
“They gave away rights that weren’t even ours
to give away, from parking to occupying suites and arrangements with stadium vendors.”
In at least one stadium, this led to 30% of the boxes standing empty after the tournament because disgruntled suite holders had decided not to renew their contracts, the former official said.
“There’s no way that anyone can make a decision of such magnitude without running it past the board.”
However, not all provincial unions agree. The chief executive of Northerns Cricket Union, Elise Lombard, this week denied their venue, SuperSport Park, was placed at risk, although she said her union had never seen the contract.
She did not want to comment on broader risks or the circumstances of Majola’s signing, but emphasised that the benefits outweighed any risk.
“What one must realise is that the IPL either was or wasn’t going to come to South Africa. Yes, there were challenges, some were easy to manage and some were greater. But it was a feather in South Africa’s cap to be able to hold an international tournament of that stature at the
turn of four weeks,” she said.
Last Friday the former chairpersons of CSA’s audit, remuneration and finance committees, Colin Beggs, Paul Harris and Hentie van Wyk, wrote a letter to the chief executives of the provincial affiliates to convince them that the bonus payments needed to be investigated independently and forensically.
They distanced themselves from an
internal CSA review of the bonus payments, reported by the M&G last week.
The review controversially cleared Majola of deliberate wrongdoing, even though the payments had been treated “in a manner outside of the direct control” of CSA and in part duplicated bonuses that CSA had already paid to Majola and McIntosh.
Beggs, Harris and Van Wyk said in their letter: “When negotiating with the IPL, Mr Majola had a duty to negotiate the maximum revenue for CSA. Being paid personally by the IPL created a conflict of interest …. The [internal review] report says CSA ‘earned substantial profits’. However, the board was told that the IPL was not very profitable financially.”
CSA spokesperson Kass Naidoo would not answer questions, citing the pending Cricket World Cup: “I am sure there will be an appropriate time to address your questions. This is not it.”
This article was produced by amaBhungane, investigators of the M&G Centre for Investigative Journalism, a nonprofit initiative to enhance capacity for investigative journalism in the public interest. www.amabhungane.co.za.