Exclusive: FidelisWorld wins arbitration in Wisden India dispute; files for insolvency of KKR-backed Sportsgateway

Sports-focused private equity firm FidelisWorld Group has filed an insolvency petition against Sportsgateway, an entity of Global Sports Commerce (GSC) group, over the non-payment of a $4 million arbitration award related to the breach of contractual obligations in the acquisition of omnichannel cricket content brand Wisden India.

According to documents reviewed by TechCircle, FidelisWorld has filed a winding up application against Sportsgateway in the Singapore High Court on the basis of Sportsgateway’s non-payment of the arbitration award in favour of the former.

The winding up hearing is scheduled for November 22 in the Singapore court.

Email queries to FidelisWorld and GSC did not elicit responses at the time of publishing this report.

Sportsgateway is part of the Global Sports Commerce (GSC) group. Promoted by MS Muralidharan, a former Reliance Industries and Essar Group executive, GSC counts Asia-focussed private equity firm ADV Partners and Emerald Media, an investment platform set up by US private equity giant Kohlberg Kravis Roberts & Co (KKR) as its investors.

The Singapore High Court, in September, upheld the award by the country’s arbitral tribunal. According to the final award, Sportsgateway has to pay FidelisWorld $4,030,385 in addition to $317,005; Rs 469,200; MUR 1,602,326, and AED 25,637.50 in legal costs and expenses, and MUR 2,917,292 as fees of the arbitrator and the costs. An interest rate of 3.5% from May18, 2018, to the date of payment is imposed in the final award.

The dispute

The case dates back to 2016 when a FidelisWorld subsidiary named FW Sports Direct Investments Limited (FW Direct), the licence holder of Wisden India, entered into an agreement with Sportsgateway for a 100% takeover of the cricket platform by the latter.

The business activities of running a cricket-related website and content house in India was conducted through a special purpose vehicle created by the licence holder, named FW Sports and Media India Private Limited (FW India). FW Sports Investment Holdings (FSIF), a closed ended fund based in Mauritius with multiple SPVs that invest in portfolio companies across Asia, mainly in India, held 84% of FW India through its SPVs.

FW Direct and Sportsgateway created a new SPV named FW SMI Limited to facilitate this deal. All of FW Direct’s shareholding in FW India was transferred into this SPV. SGW then signed on a plan to acquire 100% of FW SMI Limited through a share purchase agreement/shareholder agreement (SPA/SHA).

SGW also took on the responsibility of full management and funding any shortfall in costs of FW India. Eventually in April 2017, authority over the banking channels of FW India and custody of the cheque books were handed over to SGW, the court documents show.  

Following the handing over of operational functions, FidelisWorld alleged that the company was mismanaged by SGW and the existing agreement was systematically undermined by its main promoter MS Muralidharan. Soon, he resigned from the board of FW SMI Limited. ITW Consulting, a group entity of SGW, later filed an insolvency petition against FW India, which was later dismissed by the National Company Law Tribunal (NCLT) in April this year.

Wisden India shut down operations in August last year.

 FW Direct began its arbitration proceedings in Singapore where Sportsgateway and GSC are headquartered, and the courts there upheld the arbitral award and ordered Sportsgateway to pay FW. On account of non-payments of the final award, FidelisWorld has now taken SGW into insolvency hearings to recover its due amounts.

Wisden India

In December 2012, sports management firm FidelisWorld signed a long-term licensing agreement with Bloomsbury Publishing Plc to set up an Indian version of the legendary cricketing publisher Wisden. The deal also covered Pakistan, Bangladesh, Sri Lanka, the United Arab Emirates, and North America.

Wisden India was launched in 2013 with a team that included Dileep Premachandran (editor-in-chief), Suresh Menon (Almanack editor), and Joy Bhattacharjya (media director). Former Indian cricketer Sourav Ganguly was appointed as the president of its editorial board. An Indian edition of Wisden Cricketers' Almanack was launched in 2013, titled Wisden India Almanack.

At the time of launch, Wisden India said it would leverage diverse forms of media to build its product presence in the market through an integrated approach. It offered content properties across channels, in print, digital, television, and radio.

The Wisden India digital portfolio included the Wisden India web portal, mobile apps, and an assortment of television and radio programs. Legacy events and activities comprised the Wisden India Cricketer Awards as well as cricket Hall of Fame and Museum. Its print initiatives included an India specific ‘Blue Edition’ of the Wisden Cricketer’s Almanack and other special edition releases.

It content portfolio covered test matches, one-day Internationals, and the Indian Premier League and domestic cricket.

Latest edition of Wisden India Almanack (seventh edition) featured fast bowler Jasprit Bumrah and batswoman Smriti Mandhana as winners.

The FidelisWorld deal offered Wisden a re-entry into India, the world's largest cricket market. Wisden had earlier sold specialist cricket website Cricinfo to ESPN in 2007, after acquiring it in 2003.

Founded in 1864, Wisden Cricketers' Almanack or Wisden is a cricket reference book published every year since in England. Bloomsbury, best known as the publisher of the Harry Potter books, acquired Wisden in 2008.

FidelisWorld

The private equity firm, which is promoted by former JP Morgan executive Anand Krishnan, had invested in outdoor gear maker Wildcraft India in July last year.

It also marked its maiden exit last year by selling its stake in sports technology firm TechFront.

FidelisWorld is also an investor in gaming arcade operator Smaaash Entertainment, which last year opted for a back-door listing in the US. Mumbai-based sports data firm Sportz Interactive is also part of its portfolio.

Global Sports Commerce

GSC provides services such as LED signage, sponsorship management, consulting, fan engagement, drone-based data acquisition, wireless tech and data sciences. It has offices in 16 cities in 10 countries across the globe.

Its affiliate TechFront provides arena management technology consisting of digital display systems, interactive solutions and in-stadia lighting for sports events like F1, football, rugby, cricket, tennis, hockey, golf and athletics.

Apart from Techfront, Global Sports Commerce's network of companies includes ITW, Qubercomm, Sportsgateway, Media Bay, Beyond Boundaries, Cartoon Mango and Nanoyotta.

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