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Fixing the IPL!

Fixing the IPL!

The IPL controversy exposes the urgent need to revamp the BCCI and other sports bodies in India. BT asks experts to draw a blueprint for the radical reforms required to clean up the mess.

Balu Nayar
Head of Morpheus Media Fund; Earlier, Managing Director of IMG India

Change. Radical change. That's what's needed—not just in the Indian Premier League or IPL, but in Indian cricket in general.

Let's look at what the IPL set out to do (and did) for Indian cricket. The league ensures that our young talent has a far lower career risk when deciding to opt for cricket as a profession, that our sportsmen are exposed to the best coaches, that our stadia are continually upgraded, and that numerous employment opportunities are created around the country.

Problems & Solutions

Problem 1

  • Governance: Key BCCI officials behave like autocrats, with little accountability to those who matter most—the players and the fans.
  • Solution: Man the board with salaried professionals who are aligned with sporting and commercial objectives.

Problem 2

  • Financial dealings: Transactions lack transparency and credible auditing.
  • Solution: Have a credible accounting firm audit the financials.

Problem 3

  • Political involvement: BCCI and state associations have politicians at the forefront who find it difficult to stay away from the lucrative proposition that is cricket.
  • Solution: Let professionals run the show.

Problem 4

  • Shadow of matchfixing: In an environment in which betting is illegal, the doubt of player and franchise involvement in fixing results will always hover.
  • Solution: Create legal sports betting platforms with licences given to competent organisations.
The IPL could one day fund Test cricket and other sports in India—like an enlightened music label(!) subsidising its classical music portfolio with revenues from pop music. However, for Indian cricket lovers, the recent revelations have been a drastic watering down of a psychedelic Indian dream.

Let's look at the core issues and some radical solutions—some of these may appear unrealistic, but it's crucial to aim for the ideal. While the BCCI has been successful in marketing cricket, governance is an issue, whether in reality or perception.

Keeping aside the issues concerned with private trusts, it's clear that at least a partial government control over the sport is warranted, perhaps on the lines of the bank nationalisation programmes. Rather than struggling in the quagmire of bureaucracy, it's best that the cricketing body is structured on the lines of a quasi-PSU. All members of Cricket India will need to be salaried professionals, accountable for sporting and commercial objectives as well as corporate governance.

One of the key allegations concerns misconduct during financial transactions, including team bids, media rights, etc. The only remedy is to have these sensitive processes managed and audited by one of the Big Four firms, with due checks in place to eliminate any possibility of corruption. In future, any cricket-related financial transaction will need to carry the stamp of a reliable auditor for the process to have credibility.

Both the BCCI as well as the state cricketing associations are manned largely by politicians, and it would perhaps be a wise decision for them to voluntarily step aside to allow the professionalisation of cricket administration.

The root-cause of match-fixing is illegal cricket betting, which is estimated to be about Rs 1,60,000 crore per annum, and continues to flourish. The best solution to this problem, which obviously runs on black money, is for the government to create a legal cricket betting platform with the operations licensed out to competent organisations. This would not only help the sport, but could bring in substantial revenues to the government— multiple times the current tax receipts from the IPL of around Rs 200 crore.

A national sporting achievement such as the IPL raises a country's optimism index quite dramatically. However, the reverse is also true—if quick measures aren't taken, the negative impact on the national psyche could be significant. A cleansed cricket ecosystem where credibility and competency prevail—that's what's needed to raise the collective spirit.

Charu Sharma
Former CEO, Royal Challengers Bangalore

Nothing wrong in dreaming huge and delivering big. But not at any cost. One wishes Lalit Modi had learnt this lesson early in life. The concept of city-based sports leagues is as old as professional sport.

The problem was the ridiculous short time frame allotted to get the inaugurated IPL up and running. A gun to the head is a pretty good incentive for cutting a few corners, ignoring or circumventing a few laws, but getting the job done. Yes, the job was done, but on the run. Mistakes were bound to be made.

The pace of the journey was so quick, there was no way the ponderous ways of the BCCI, or, indeed the august IPL governing council, could keep up. An ideal scenario for a man of Modi's temperament, character and ambition.

Billion-dollar Questions

  • How many shares in IPL franchises are held through shell companies, including those incorporated out of overseas tax havens?
  • What procedures were adopted while doling out contracts for broadcasting, event management, advertising for IPL?
  • Was match-fixing a regular feature?
  • Why was the IPL governing council a silent spectator to the mess?
No one can fault or grudge the success of the IPL in certain primary areas. It became a high-profile proving ground for many talented youngsters. The franchisees, after a lot of initial confusion and bickering, realised they were on the right side of the demand and supply chain.

And most of all, the public seemed quite pleased to lap up this latest form of cricketainment. Who knew, or cared whether the paperwork and methodology of all financial transactions was above board. After all, it wasn't public knowledge, hidden as always, deep within the sanctum sanctorum of the BCCI.

The Tharoor saga, sad as it has been for him, opened the floodgates. For me, however, there were early warning signs of impropriety. Take the whole TV rights issue which cropped up before IPL2. Sony purchased the telecast rights from WSG for near $1 billion. And, just because the IPL powers-that-be smelt more money in that area, a 10-year deal was scrapped after just one year on the basis of some lightweight excuses. It was a ridiculous turn of events against the biggest revenue earner for the IPL. But what followed was stranger still.

The very same Sony was then allowed back in as telecast partners for the next nine years at a mind-boggling $1.6 billion or so! If they were indeed incompetent telecasters, which they were not, how come they were allowed the same privilege? Sony may have been desperate enough to be coerced to pay $600-700 million more for the very same property. But, to my mind, ethics and contractual obligations seem to have been paid scant respect.

It's very difficult to clear the current mess. There are too many people involved. Everything is conjecture at the moment and nobody knows about the extent of involvement. If it's all about taxation liabilities, that's a very easy thing for the IPL to clear. It has to be more than that. It has to be established whether there were any serious legal transgressions (like money laundering). But everything can be covered up. The establishment has no will to see the end of it. More than half of the established, after all, is part of this game.

So, what is the way out? The Modi saga has provided the country with a fantastic opportunity to cleanse cricket administration and, perhaps, provide a model for all federations. Transparency, to my mind, is the answer to so many ills that plague India. I hope I'm not sounding too naive, but a retired Supreme Court judge, paid a standard salary by the government, could easily play the role of an independent director on every federation. Then, whether rich or poor, every federation has a very good chance of functioning in a transparent manner. Which I suspect, will gradually bring in increased corporate funding into sport, which awaits only a more transparent account of the utilisation of its financial support.

Published on: Apr 26, 2010, 11:31 AM IST
Posted by: AtMigration, Apr 26, 2010, 11:31 AM IST