MUMBAI: Even as Discovery Communications India declared on Thursday that it had ended its relationship with “third-party service provider” Lex Sportel Vision in regards to running the sports channel DSport, a recent ruling by the Delhi High Court makes clear that this is NOT an open and shut case.
Justice Prathiba M Singh, in an order delivered on 20 December, has taken on board a legal challenge that Lex Sportel Vision, promoted by RC Venkateish, former MD of ESPN Star Sports and erstwhile Dish TV India CEO, has launched against his one time partners, where it has been argued that his company (and not Discovery) is the actual owner of DSport.
In its petition, Lex Sportel has also put on record objections raised to the representation made by Discovery to the Information and Broadcasting Ministry to convert DSport into ‘EuroSport’.
The operative part of Justice Prathiba’s order, a copy of which, along with a copy of the original petition moved by Lex, is with SportzPower, states that, “A hearing shall be given to the Petitioners (Lex Sportel) before any decision (on the matter) is taken by the I&B Ministry.”
Justice Singh has listed 30 March as the next date of hearing in the case.
Coming to the case made out by Lex Sportel, it is that while Discovery obtained a licence from the I&B ministry to launch a sports channel in June 2011, it was in 2014, following an agreement reached with Lex, that the process of launching the channel kicked off.
The key sequence of events, as argued by Lex in its petition, are as follows:
1. In December 2014 Lex signed an agreement with Discovery for the formation of a joint venture in which the Liberty Media-owned network acquired shares in the enterprise set up by Venkateish to launch a sports channel in India.
2. In May 2015, a share holders and subscription agreement was executed between Lex and Discovery “for the satellite TV broadcasting business”.
3. In April 2016, Lex and Discovery reached an agreement that the channel, once lauched would be called DSport (instead of Lex’s intended name ATR).
4. In October 2016, I&B ministry granted Discovery “renewal of permission (to launch a sports channel) for a period of ten years” up to May 2026, as well as “renewal of the registration” for a year.
5. In the same month Lex “set out to create a channel in Hong Kong” and secured an uplinking license for it from the Hong Kong government in January 2017.
6. Uplinking license secured, Discovery subsequently informs the I&B ministry for “compliance purposes”.
From here on (January 2017), it has been pretty much downhill as far as the relationship between Discovery and Lex is concerned.
Returning to the sequence of events as laid out in Lex’s writ petition:
7. As per the petition, it is alleged that Discovery mis-reported to the I&B Ministry in January 2017 that the uplink permission granted by the Hong Kong government was to Discovery Asia-Pacific, rather than to Lex. (For the record, DSport was officially launched by Discovery Asia-Pacific on 6 February 2017).
8. In June 2017, an interconnection agreement was executed between the Lex and Discovery.
9. By March 2018, Lex and Discovery are officially in dispute.
10. In October 2019, Discovery applies for change of name of DSport (to Eurosport), “without disclosing material information for the purpose of committing fraud”, Lex alleges in its writ.
11. On 14 October 2019, Discovery issues Lex a notice for termination bringing the interconnection and service arrangement (instituted in June 2017) between the two parties to an end.
12. In November 2019, Lex submits a complaint to the I&B Ministry that Discovery’s application for a name change “must not be considered” as well as a “representation to TRAI for the purpose of appropriate action to protect the interest of subscribers”.
13. On 18 December 2019, Lex files its writ petition in which it is seeking not just the rejection of the application made by Discovery to change the name of DSport to Eurosport, but also the cancellation of Discovery’s licence for a sports channel in India “for fraudulent misrepresentation”.
That’s as far as Lex is concerned. As for Discovery, following up on its termination notice, the network announced Thursday: “Keeping in view the aggressive outlook of the sports vertical, Discovery is currently expanding its in-house sports-focused team. The company has also ended its relationship with third-party service provider Lex Sportel, bringing all services in-house, effective February 14, 2020.”
As already reported, heading the sports business in South Asia is Vijay Rajput, currently serving as SVP – Affiliate Sales & Product Distribution, Discovery Asia-Pacific.
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