FIDE responds to London's withdrawal

Open letters... somehow it's the preferred means of communication in the chess world. Today we received an open letter from FIDE Vice President Israel Gelfer, directed to Malcolm Pein, CEO of Chess Promotions Limited. The World Chess Federation responds to London withdrawing the bid to organize the 2012 World Championship.

Six days ago we published the press release by, and the interview with IM Malcolm Pein, organizer of the London Chess Classic and CEO of Chess Promotions Limited. Pein informed the chess world that London had withdrawn their bid to organize the 2012 World Championship, mainly because FIDE hadn't accepted in time.

“Honestly speaking, to organize an event like this properly, you need at least 18 months,” Pein told us by phone. “15 months is nothing. We had a beautiful venue in mind, but it was running out in that period. The value of the match diminished by the day: the less time you have, the less well you can do it. It’s really sad, because the deal was on the table since July 21st.”

Today we received the official response from the World Chess Federation, written by FIDE Vice President Israel Gelfer:

9 February 2011

Dear Malcolm,

I received the announcement of Chess Promotions that you are withdrawing your offer to organize the FIDE World Championship match (FWCM) with great disappointment. I would like to provide the chess world with the correct facts which caused this move.

On February 2010 FIDE granted you the option to organize the FWCM "under the same conditions like the Sofia match between Anand and Topalov". On 15 February you signed a memorandum accepting the conditions and regulations of the match and two days later paid a deposit of 50,000 Euro for such option.

After that, for a long period, you have been proposing several changes from the Sofia contract. In July 2010 (after the original deadline was extended by FIDE) you sent to FIDE a different version of the contract with different conditions. For most among this were important financial conditions which had to be clarified first. In a constructive manner FIDE, wishing to hold the match in London, accepted several conditions interalia reducing the prize fund by 20% due to UK taxes not covered by the organisers, reduction of the contribution to FIDE, reduction of the number of principals. In January we met in London when I proposed to discuss the agreement based on the Sofia contract as amended above.

In our meeting both you and Mr. Andrew Finan [who works with Mr Pein - CV] replied that you only consider the version dictated by you, claiming that they are no substantial differences between the two contracts. You made it very clear, as you recall, that the sponsor of the match "lost interest" in it after the withdrawl [sic] of GM Magnus Carlsen and consequently instructed you "not to negotiate at all about anything" i.e. "take it or leave it".

Even after the meeting in London I was trying to solve the problems and I informed FIDE about the situation. The FIDE Secretariat then gave me a list of 36 differences between our version and your proposed contract and 16 changes from your original July draft. Many of which were completely unacceptable to FIDE, interalia FIDE being responsible of player’s taxes in their respective jurisdictions, no liability for any cancellation for any reason and putting FIDE as responsible for several obligations which were and are not in FIDE's hands.

Moreover, in your contract you change the regulations of the match. Furthermore you have informed us only on 27 January that the players may be liable up to 50% tax. This means that the net prize fund could be as little as near 1.2 million EUR after tax where as our agreement was that you will provide, as in Sofia, a prize fund of 2.0 million EUR after tax. Therefore your statement that the conditions were equal to Sofia was incorrect.

In order to try and solve the problems I asked for an extension of the signing date until the Presidential Bord [sic] meeting in early February. You were also invited by the FIDE President to come to Antalya so that we could try to reach an agreement. Unfortunately this proposal was rejected and you announced the withdrawl [sic] of your offer.

It is clear, and was obvious to me and expressed specifically by you, that the withdrawl of GM Carlsen from the WC cycle meant that the sponsor was no longer interested in sponsoring the match.

I regret that the FIDE World Championship Match, despite all our efforts, will not be organized in London in 2012.

Best regards,

Israel Gelfer FIDE Vice President

Malcolm Pein told us that he is preparing a response to this FIDE letter, which we hope to publish later today.

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Update February 10, 12:49 CET Thus far Pein hasn't come with a response, but TWIC's Mark Crowther did speak to him yesterday and points out the following:

The statement itself reveals details (unverified) of the negotiations that one would expect both parties to keep confidential. Pein's press release scrupulously avoided this and was diplomatic in tone. Malcolm Pein made it clear in talking to me that if London were not interested in hosting the championships any more after the withdrawal of Carlsen from the cycle, they would not have left the offer on the table (a six figure sum) for more than two months after he declared he was out.

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Update February 10, 15:57 CET At Chess in Translation you find the opinion of Ilya Levitov, a FIDE Vice President and the man in charge of the Russian Chess Federation. Although he admits not having attended the negotiations between FIDE and Chess Promotions Limited, Mr Levitov seems to be backing FIDE quite strongly.