Everybody knows Lalit Modi, the brain behind Indian Premier League(IPL) and Champions League Twenty20. But how did he became eminent? Lalit Modi, son of K.K.Modi chairman of Modi Enterprises, is also President and MD of Modi Enterprises.
Even his enemies agree that if Jagmohan Dalmiya made cricket a saleable business venture, it was Modi who took it to incredible commercial heights. The stupendous success of the Indian Premier League (which, according to Modi, has become a $2 billion venture in merely three years), has awed even the best marketers across the world.
It is an irony that outside the cricket pitch, the man’s only claim to fame has been full of clashes and crashes.Going by his trail of business ventures, it’s clear that sports and entertainment were his pet sectors. After his forced exit from the US, where he was charge in second-degree kidnapping, assault and drugs case, Modi got into father KK Modi’s business. The Senior modi run's a $2 billion enterprise spread across textiles, tyres and tubes, chemicals and consumer goods, among others.Although he has been the President and Managing Director of Modi Enterprises, couldn’t hold young Lalit’s interest and soon and he set out on his own.
During the early nineties the cable and satellite business was taking roots in the country.Global broadcasters, even in the non-news genres were not allowed free entry. Lalit Modi seize the opportunity, and Modi Entertainment Network (MEN)-a part of the K. K. Modi Group- was born.
In 1993, MEN signed an joint venture with Walt Disney. WD India Pvt Ltd, the new company in which Walt Disney had 51% stake and MEN held the rest, was given the mandate to introduce Disney’s merchandise in the Indian market,including Fashion TV(FTV) and to increase its programming on various existing TV channels. The merchandise business was housed under Walt Disney Consumer Products and the broadcast venture was with Buena Vista TV India. MEN was entrusted to collect money from the cable operators for broadcasting ESPN.
In 1995, Walt Disney also entrusted MEN with the responsibility of distributing its popular sports channel ESPN,for broadcasting cricket matches in India, on 5 year contract.By 1997, ESPN got its own distribution team and after its contract with Modi lapsed in 1999, it entered into a joint venture with Star Sports for the non-US markets and ESPN STAR was formed.
The relationship collapsed around October 2001 when Disney sought government permission to set up a wholly owned subsidiary for the launch of the Disney Channel in India. Modi had then contended that clearance for the proposal was subject to MEN giving a no-objection certificate (NOC) and opposed Disney's proposal on the ground that the businesses of the existing JV and the proposed whollyowned subsidiary were similar.His refusal to give an NOC forced Disney to consign its plans for launching the channel on the backburner. Disney chose to hold off and dissolved its JV with Modi in 2003 after the expiry of its 10- year agreement.
After Disney, FTV got embroiled in a legal dispute with MEN, again in 2003. The dispute arose over whether the fashion channel was violating its agreement with MEN by going free-to-air via the satellite Asiasat 2.After a year of legal battle in the Delhi High Court, the matter was mutually settled and an agreement was reached between MEN and FTV sole owner, Michel Adam Lisowski. MEN continues to control FTV India.
Modi has also been in the online gaming and lottery industry in India.In 2002, when the government opened up the online industry, the K. K. Modi group was one of the first to foray into the business through an entity called MWC Market Services Company, which was headed by Lalit Modi. He introduced an online lottery chain under the name Sixo to cover the Kerala market.
Playwin, the major player in the business, stalled Modi's entry into the state by securing a stay order from a local court. But Modi dug in his heels, got the stay lifted after a year and entered the business with a new firm named Sunshine. In 2004, the state government, responding to the impoverishment of people lured by online lotteries and the Rs 3,000 crore that the companies owed to it, banned the business under the Anti- Gambling Act. It continues to be embroiled in cases in various courts to recover the tax amount. The online lottery business, though, was not a complete loss for Modi.
Not to mention, Modi also entered the realty sector, through a company called Amer Heritage City Construction Pvt Ltd, which later changed its name to Ananda Heritage Hotels.The company became controversial after it acquired a number of heritage sites in Rajasthan during the Vasundhara Raje regime.Modi's wife Minal is also a director in this firm.
Being rejected umpteen times by the Board of Control for Cricket in India(BCCI) for the proposal of "limited over" cricket league, Lalit Modi embarked into this political system of cricket by becoming a member of Himachal Pradesh Cricket Association (HPCA) in 1999, by assuring of constructing a cricket stadium which would be a summer venue. In 2000, attending a meeting of BCCI as a representative of HPCA, the mandarins became concerned of getting rid of Modi because of Modi raising issues(as said by Lalit Modi). When P.K.Dhumal became the Chief Minister of Himachal Pradesh, his son Anurag Thakur was installed as the President of HPCA.
During the earlies of 2003, Modi tried to join the Rajasthan Cricket Association(RCA), by nominating himself for president of Nagaur District Cricket Association . Modi deliberately submitted his name as Lalit Kumar, on account of being chagrin in RCA, as he was mortified in HPCA . The Rajasthan Cricket Association (RCA)was being run by the Rungta family for around 38 to 40 years had 32 districts(currently 33)and had 57 members which were related to the Runga family.
On Modi's persuasion to former Chief Minister Vasundhara Raje(22nd Chief Minister of Rajasthan) for ousting the Rungta family, the Raje government got IAS officer Sanjay Dixit (who is the current RCA general secretary) to come up with the Rajasthan Sports Act.The rules of elections where changed, providing a major say to district units during the RCA presidency elections, which until then in Rajasthan and unlike, say in Delhi and Kolkata, did not allow members to elect the state cricket association president. Modi defeated Kishore Rungta and took the post of RCA president from February 2005 to March 2009 which gave him a seat to BCCI.
In 2005, Modi figured in a power struggle that resulted in Sharad Pawar, an influential politician and national cabinet minister, ousting former Indian cricket supremo and International Cricket Council chief Jagmohan Dalmiya in BCCI elections. Modi was then appointed Vice-President of the BCCI. As vice-president of the BCCI he had been instrumental in boosting its revenues, brokering television deals and sponsorship associations.
The BCCI agreed to start IPL and Lalit Modi was declared IPL commissioner. In late June 2007, Lalit Modi indoctrinated Andrew Wildblood of International Management Group (IMG), the sports management giant in London. In February 2008 the players auction began. The bidders were some of India's prosperous names, from industrialists to film stars, adding to the event's lustre. As the sums on offer began to emerge – $1.5m for Mahendra Singh Dhoni, $1.35m for Andrew Symonds, $950,000 for the inexperienced Ishant Sharma , taking the total of all players to more than Rs. 150 crores.While the total base price for auction of teams was US $400 million, the auction fetched US $723.59 million. In April 2008 the maiden IPL tournament was commence with 8 participating teams and also introducing spicy cheerleaders for the first time in cricket.
The BCCI earned the legal income from bidders and from advertisments and from broadcasters.
In IPL season 2(2009), Lalit Modi stormed Home Minister Palaniappan Chidambaram office for not getting security for IPL season 2,due to elections, due to which Lalit Modi managed to move the match to South Africa within 3 weeks.
IMG and the IPL were very recently involved in a controversy when IMG was fired as the event managers because of a fee dispute. They were rehired after the eight franchisees made a ruckus. SET Max from Sony Entertainment Television had to pay more to retain rights to telecast the IPL this year. Last year they had paid $1 billion to get the IPL rights for 10 years.
Taking the IPL into the big league, Modi also helped the BCCI's income cross the $1bn mark (from $67m) with a television deal with Nimbus worth $612m, team and shirt deals worth $641m with Sahara and Nike and a television deal with Zee for India's matches on neutral venues worth $219m. The brand value of IPL has crossed Rs. 18000 crore from Rs. 400 crore according to global sports. It is estimated that the average salary of an IPL player over a year would be £2.5 million (more than Rs. 15 crore).
In April 2010, the Duo IPL-Modi became controversial over a spark when Lalit Modi listed the names of the shareholders of IPL Kochi team on his Twitter account. Modi wrote on Twitter that "Kochi shareholders are: Rendezvous 25% free, Rendezvous 1%, Anchor 27%, Parinee 26%, Film Waves Combine 12%, Anand Shyam 8%, Vivek Venugopal 1%".
He also revealed the names of Rendezvous free equity - held by Kisan, Shailender and Pushpa Gaikwad, Sunanda Pushkar, Puja Gulathi, Jayant Kotalwar, Vishnu Prasad, Sundip Agarwal. Sunanda Pushkar, one of the free equity holders has been linked to Union Minister of State for External Affairs Shashi Tharoor.
Modi was then suspended as Chairman and Commissioner of the IPL in April 2010. A suspension notice and a 34-page letter stating 22 charges of impropriety was served via email to Modi. Modi publicly protested his innocence immediately after the 2010 Indian Premier League Final had been played.
An Income Tax department report on Modi has revealed that he holds a silent stake in three IPL teams - the Rajasthan Royals, Kolkata Knight Riders and Kings XI Punjab. Furthermore, there are allegations as to whether Modi was involved in match fixing and betting in Indian Premier League games and also for helping his family and friends to buy stakes in Indian Premier League teams.Gaurav, Lalit Modi's son-in-law is a stakeholder in Global Cricket Venture, a firm that has the digital, mobile and internet rights of the IPL. His brother Mohit Burman is a co-owner in Kings XI Punjab, which he owns as part of the consortium consisting of his childhood friends Karan Paul and Ness Wadia, and Wadia’s ex-girlfriend Preity Zinta. The franchise, however, is up for sale now.
The BCCI official however claims to be ignorant of knowing anything about the Modi's scam.
"Although it's a biggest slap on the BCCI's official for not knowing the inside story of IPL controversies and also its ignorance about the ownership of franchise's stakes in it. "
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