Lucky Report: C&W Treated Unfairly

Cable and Wireless was treated unfairly by the West Indies Cricket Board with respect to negotiations for a new sponsorship contract. This is the view expressed by the Lucky Committee which examined the entire process by which the WICB replaced C&W as sponsors of West Indies cricket.

In its report, the committee headed by Justice Anthony Lucky, and including Gregory Georges and Avondale Thomas, noted that the WICB was "not proactive" in discussing the new terms offered by C&W which had "capitulated" on all the areas of contention in interviews with WICB chief executive Roger Braithwaite.

?It is not unreasonable to conclude, therefore, that the WICB had every intention of going to the market even though C&W had conceded on all the areas of contention,? the report stated.

In her testimony before the committee, Lisa Agard, Executive Vice President, Legal Regulatory and Public Policy at C&W, denied the contention that negotiations had broken down with WICB. On the contrary, she said, C&W was of the very firm view that it had concluded negotiations with the Board because there was a new sponsorship agreement to take effect as soon as the current one had expired.

Agard recalled that on November 6, 2003, WICB president Teddy Griffith responded to what she presumed was her October 20 e-mail. She quoted from Griffith?s letter which stated, inter alia, ?Thanks Lisa. We have completed our internal review of version one and have passed it along with our comments to our attorneys for review. We will now review version two and hope to be in a position to revert to you a fortnight with our comments after which we will be in a better position to estimate when I will be in a position to make a recommendation to the Board. I have asked Roger to maintain contact with you directly if there are any issues that need immediate discussion.?

Agard continued: ?Then we heard absolutely nothing from them until a letter of December 5, 2003.? According to the report, she regarded an exchange of letters in September 2003 as a commercial agreement. The president disagreed, because he said it was subject to Board approval and contract.

In response to this, Agard told the committee: ?I do not expect that after an 18-year relationship that I sit down in a series of meetings with persons no less than the President and CEO and agree to commercial terms, exchange correspondence, send you a revised contract, I hear nothing about it, there is an issue with it and then you tell me it was subject to contract and subject to approval by the Board. It is extraordinary to me.?

The committee held that, on balance, an analysis of all the evidence revealed that the WICB treated C&W unfairly in the negotiations.

The committee gave a number of reasons.

The WICB did not respond within a reasonable time to the concerns it had in the proposed contract that was submitted to it on October 20, 2003. The Board wrote C&W on December 5, 2003, indicating that terms and conditions were introduced in the draft contract which radically altered the basis of the old existing agreement.

Looking at the question of fairness, the committee reported, C&W was not given an opportunity to respond before the ten-month period had ended and it was clear that for the whole of the month of November there was no communication between the WICB and C&W. The ball was then in WICB?s court.

When the WICB asked C&W to match a higher offer by at least $1.97m, there was no disclosure of a commission agreement.

The WICB withheld the identity of the party that C&W was asked to match to the clear disadvantage and subsequent detriment of C&W. There was a fundamental lack of transparency on the part of WICB, the committee wrote in the report.

In speaking to the committee, Donald Austin, General Manager of C&W, Barbados, said he had approached President Griffith and made a verbal offer of $4m per annum.

Austin said, ?During our discussions, I indicated that Cable and Wireless wanted to retain the sponsorship of the team and I inquired what would be an amount that the Board would accept that would lead to the conclusion of a new agreement, although on 16 March we had formally informed the WICB that we would not match the WICB?s proposal for US$29.55m over five years.?

Austin told the committee that on Monday March 29, 2004, he called Griffith and offered $4m for the home series only. In reply, Griffith indicated that he had already met with the potential new sponsors and that there was a 21-day exclusive discussion agreement with this party so he would not be able to consider the C&W offer at the time.

?I indicated that we had eighteen years of sponsorship and I would expect that we should be favourably considered given this relationship. However, he further noted that he would not be able to review before the expiry of this exclusive period.?

Austin said he got the same refusal from Griffith. ?I indicated that Cable and Wireless had a long association with the Board and it was puzzling that the Board did not seem to want to discuss our offer.?

In respect of the 21-day exclusive review period, the committee reported that it had not seen any evidence of such an agreement at that time. The committee questioned Digicel?s McDermott about this and he replied in writing:

?The review committee referred to a 21-day exclusivity letter signed at the end of the meeting in March 2004. No exclusivity agreement was signed at the end of that meeting. An exclusivity agreement was however signed at the end of May 2004 in circumstances set out below.?

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