The West Indies Cricket Board has signed off players’ rights with their agreement to a ten percent commission pay-out to, International Sports Management

Mark Pouchet30-Aug-2005The West Indies Cricket Board (WICB) has signed off players’ rights with their agreement to a ten percent commission pay-out to International Sports Management (ISM), their United Kingdom-based brokers. The commission is deductible from the players’ base fees and even on their bonuses, a scenario described as grossly unacceptable and potentially dangerous by the Sponsorship Negotiation Review Committee (SNRC).The details of this aspect of the Digicel agreement were revealed in Justice Anthony Lucky’s SNRC report, which was handed over to Ken Gordon, the new WICB president, on August 15. The report will be discussed at an executive board meeting on September 4, in St John’s, Antigua.In chapter three of the report, entitled “Does an improper relationship exist between the WICB and Digicel?”, it is explained that the two commission agreements, one dated February 23, 2004 and signed by Roger Brathwaite, the chief executive officer of WICB, and the other dated July 6, 2004 and signed by Teddy Griffith, the then WICB president, commit the WICB to the payment of a ten percent commission to ISM or the belatedly created company Sports Bureau International (SBI). SBI was only established in 2004, after negotiations began with the WICB. SBI was also a company that David Brookes, an ISM director, admitted was created to mask the identity of Digicel when the WICB asked Cable & Wireless (C&W), 18-year-long sponsors of West Indies cricket, to match the rival bid, a clear breach of the contract the WICB had with C&W at the time.Clause five of the agreement, signed by Brathwaite in February that year, states the following: “The WICB shall pay to ISM a commission equal to 10 per cent of the aggregate value of the sponsorship agreement [in money or monies worth and including, without limitation, any bonuses or incentives] paid or received by the WICB pursuant to a sponsorship agreement.”The report declared: “So not only does ISM get a 10 per cent commission on the base fees but even the players’ bonuses negotiated under the contract”. The committee also found that the WICB would not have had to pay a commission to C&W and would have stood to earn approximately US $600,000 more than they ultimately received from the Digicel contract.The SNRC report interviewed sports management professionals, all of whom stated they were not aware of any sponsorship agreement where commissions are paid on players’ bonuses. Further, under the agreement signed by Griffith on July 6, 2004 and Andrew Chandler, an ISM director, the WICB’s supposed sponsorship funds are to first pass through ISM/SBI for the deduction of their commission before the WICB receives its share.Clauses one and two of the agreement state: 1. Subject to and in accordance with the provisions of any act or regulation applicable to the same, all payments under the Master Sponsorship agreement shall be made by Digicel through ISM to WICB. 2. ISM shall be entitled to deduct from each of such payments the commission to which it is entitled under the commission agreement before accounting for the same and paying the balance to the WICB.The SNRC did not agree with this arrangement. “In the view of the Committee,” the report states, “this is grossly unacceptable.” The report also raised serious concerns over a clear conflict of interest for ISM/SBI as it was determined that they ultimately represented both sides and that the WICB was paying all the commission.Brathwaite told the Committee that the situation was so because ISM/SBI brought the sponsor. The Committee also asked the question: “Why did the president (Griffith) and CEO (Brathwaite) not insist on the Board’s money coming to the Board as well? This was like a salesman who works on commission telling the company’s costumers to make cheques payable to him or her and not to the company. So the company who has the majority of the cheque has to wait on the sales representative to pay the company its majority share from his or her personal account.”The report stated that the situation was not only highly unusual but potentially dangerous and could result in serious financial losses to the WICB. For example, should any creditor or the government of the United Kingdom appoint a receiver/liquidator to ISM shortly after the funds have been transferred from Digicel for subsequent transfer to the WICB, those funds as well as future cash flows could end up frozen, the document pointed out. As was stated in an earlier report, WICB’s Memoranda and Articles of Association were not adhered to and the SNRC was unable to discover any evidence of Board discussion or ratification or of a resolution authorising the president and other WICB directors to sign the new agreement.The following questions were raised: 1. Why did the WICB sign the new agreement when there was a potential new and better offer on the table from a proven, tried and tested company (C&W) with whom the WICB had an 18-year relationship, if it did? 2. Why did the CEO and president not use the opportunity to up the ante to get the best deal possible by making C&W, Digicel and any potential sponsors fight it out to maximise its offer? 3. Why if ISM was representing the WICB it tried to conclude the deal with Digicel when potentially there was a possibility of a better offer?Brookes had stated he did not want to lose the deal he had worked hard to secure. So his personal interest was paramount and not necessarily the WICB who at the end was bearing the cost of the whole deal.