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Sports ministry wants commission clause with Aussie firm withdrawn

The Commonwealth Games Organising Committee is under fire over an agreement with Australian sports marketing firm SMAM to rope in advertisers for the Games.

The Commonwealth Games Organising Committee is under fire over an agreement with Australian sports marketing firm SMAM to rope in advertisers for the Games.

The Sports ministry has asked the Organising Committee to withdraw the clause which says “SMAM is entitled to draw down commissions based on revenue and value in kind received by Commonwealth Games ranging from 15 to 22.5 per cent depending on revenue generated”. In a recent note,Sanjiv Mittal,financial advisor to the ministry,suggested that this particular clause be withdrawn.

The Indian Express had earlier reported on SMAM’s negligible contribution in getting sponsorship for the Games. Of the six sponsors who are on board,there are only two private sector firms — Coca-Cola with Rs 15.7 crore and Hero Honda with Rs 38 crore. Even though the bulk of sponsorships have come from PSUs — NTPC (Rs 50 crore),Air India (Rs 50 crore value in kind) and Central Bank (Rs 51 crore) — SMAM will get a commission on the deals.

Mittal has also raised objections against the Organising Committee giving commission to SMAM from sponsorship received from those applying for tenders. All those bidding for different functional areas are required to give a marginal amount as sponsorship either in terms of revenue or value in kind.

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The ministry is not the only one gunning for SMAM. Even Organising Committee Executive Board member Vijay Kumar Malhotra had written to the Prime Minister’s Office on April 6 against SMAM. “It is obvious that sponsorship from government departments and public sector undertaking has been offered as a corporate responsibility and not due to any role played by SMAM,” wrote Malhotra. “I suggest that public undertakings and government departments give direct donations to the Organising Committee instead of declaring it as sponsorship,” Malhotra noted in his letter.

While there are growing murmurs in the Organising Committee against SMAM,a review of the firm is yet to be taken up.

‘Delhi already better than Melbourne’
The Organising Committee’s sponsorship programme has come in for praise from the Commonwealth Games Coordination Committee. “We were particularly pleased with the inroads being made in the area of sponsorship. With what has already been contracted and what is currently at contract stage,the sponsorship programme has almost eclipsed what Melbourne achieved in 2006,” said Commonwealth Games Federation CEO Mike Hooper. Hooper’s views were echoed by Coordination Committee chief Austin Sealy.

First published on: 09-05-2010 at 10:09:19 pm
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