October 24, 2015

How the government can help solve Indian cricket's problems

The government ought to consider giving the BCCI legal recognition as a regulatory body responsible for cricket in India, in return for the board giving up ownership of the IPL

The government should not get involved in appointing officials to the BCCI, nor should it provide any money © PTI

Cricket is in turmoil. It is beset by allegations of corruption on and off the field. As a commodity it is more profitable than ever before, while as an international sport it is under greater threat than ever before. The state of cricket today is eerily similar in some significant respects to the state of baseball 100 years ago.

Much like cricket today, a century ago, major league baseball's popularity had made it a lucrative investment opportunity for rich magnates with cash to spare. The Federal Baseball League, set up with investment from hotels, coal, beer, oil and baked-goods barons, competed for players and audiences with the two established leagues - the American League and the National League. The established leagues fought back by threatening players who were considering Federal league offers and raised their salaries, forcing the Federal league to raise wages in its turn. The Federal League eventually only attracted a few major league players who were at the end of their careers; their audiences were not as large as expected; and their capital investments in building stadiums resulted in precarious finances.

The Federal League sued the big leagues in a federal court in Chicago, alleging violation of anti-trust laws. The judge who heard the case, Kenesaw Mountain Landis, had a reputation as a trust-buster and was expected to be sympathetic to the new league's case. For almost a year, however, Landis refused to rule on the Federal Baseball League's case. Soon the league's finances collapsed. It folded, and the lawsuit in Judge Landis' court was rendered moot.

Subsequently, some owners in the Federal League were accommodated by the established leagues, but not all. Lawsuits continued. One of these reached the US Supreme Court in 1922. The court, led by Judge Oliver Wendell Holmes, ruled that major league baseball was not subject to existing anti-trust laws under the Commerce Clause of the US constitution.

In 1919, major league baseball's other big problem - gambling and match-fixing - also came to a head. Members of the Chicago White Sox (a great team that year) accepted money to throw the World Series. There was an investigation and a number of players were found to be guilty. The major leagues conducted their own "governance review" and decided that a commissioner, who was not affiliated with any one team, was necessary. The man they appointed was Landis, the judge who had helped them out in 1915.

Cricket is faced with similar difficulties and lawsuits, but first, let us consider the problem. In his wonderfully detailed recent article on the subject, Gideon Haigh points out not just the moral shortcomings of the Big Three, but also some problems with the Woolf review of governance in cricket.

It is never clear what governance means, because, as Haigh says, it is not clear what the "best interests of the game" are. Haigh was also interviewed for Jarrod Kimber and Sam Collins' Death of a Gentleman. In it, he posed an essential question: does cricket exist to make money or does it make money to exist?

To understand this question, it is essential to know how cricket has historically made money. For most of its history, the game made money via gate receipts and, occasionally, sponsorship. The game was broadcast via public radio or television networks, so money was made by selling tickets and by selling advertising at the ground.

With the advent of cable television, for the first time someone other than the cricket board was making money from cricket. The cable network paid the cricket board money to buy the right to broadcast cricket. It then sold the broadcast to subscribing viewers and the time between overs to advertisers. This produced many orders of magnitude more money than just direct gate receipts, since the TV audience vastly outnumbers the number of spectators at the ground. This was what made cricket, which was already extremely popular, so attractive to Kerry Packer.

The ICC's power comes from the fact that it has money to distribute and organises tournaments to make money. Its problems arise from the fact that its ability to make money depends entirely on the goodwill of its members

It was a matter of time before someone worked out that they could hire cricketers themselves, instead of buying cricket from a cricket board. After all, most cricket boards are not statutory bodies, nor do they hold a patent for the sport.

Packer did this when the Australian board of the day refused to do business with him on his terms. Subhash Chandra of Zee tried to do it too, at a time when there was not just cable television but also the internet: two mechanisms with the ability to generate revenue beyond gate receipts. Most importantly, there was also T20, which is cricket that exists to make money. It was invented because the English board felt it wasn't making enough money.

Now that the boards had this extremely lucrative product in their hands, they were bound to face competition. The consolidation of power that came about at the ICC in 2014 was perhaps not because of "greed" but rather the relentless logic of capitalism. For example, the Future Tours Programme has been eliminated. The amount of time available in the cricket calendar is finite. MS Dhoni can play exactly one match at one ground at a time. So getting rid of commitments of Dhoni's time in regard to less lucrative, small-market international cricket was essential to ensuring that he and other stars would be available for more lucrative cricket, which could fill those newly freed months. Already the IPL is considering a tournament in September. West Indies, Bangladesh, Australia and Pakistan have all developed their own copies of the IPL in recent years.

To add to Haigh's questions about the recommendations of the Woolf review, here is another. What if an independent ICC remained blind to the threats faced by its members, with the result that within a few years these boards were no longer the primary agents administering cricket in their countries? Why would any members accept such a risk?

This explains the monopolistic practices of the BCCI, which dealt with the threat of Chandra's Indian Cricket League in much the same way that major league baseball dealt with the Federal League. And it faced similar litigation as a consequence. In 2010, the Competition Commission of India accepted a case against the BCCI for unfair business practices, and after inquiry, in 2013 found that the board was guilty of anti-competitive practices and fined it. The BCCI appealed, and based on problems with the way the original inquiry reached conclusions on pricing, the appeals tribunal set aside the ruling in 2015 and sent the case back to the commission.

The commission's report from 2013 addresses three essential points. First, it makes a distinction (as does the BCCI) between non-commercial international cricket and commercial franchise-based cricket. Second, it asks about the BCCI's dual role as regulator and organiser of commercial franchise-based cricket. Third, it asks where the BCCI's authority to regard itself as the regulator of the game in India comes from.

On the first question, the BCCI's point about international, representative cricket not being commercial is not disputed. On the third question, the BCCI has no statutory authority. But the government of India has previously declared in an affidavit to the Supreme Court of India that the BCCI is de facto answerable to the Ministry of Youth Affairs and Sport, and that the government recognises the BCCI as the de facto regulator of the game in India. The BCCI's constitution also describes its purpose as being to regulate cricket in India. Further, the BCCI argued before the commission that its unique status arises from the fact that it is recognised by the ICC, and the ICC recognises only one board in any given country.

The answer to the second question involves a serious conflict of interest. Much of the public reporting about the case has focused on the finding that the BCCI is guilty of anti-competitive practices, and the size of the fine, and on N Srinivasan's dual roles as an IPL team owner and BCCI administrator. The conflict is more fundamental than that. It lies in the BCCI being a regulator of cricket as a commercial enterprise and simultaneously having a commercial interest in one such enterprise, the IPL.

The government of India can resolve cricket's problems by inventing a statutory model that provides the BCCI recognition as an autonomous regulatory body responsible for cricket in India. In return for such de jure recognition, BCCI should give up ownership of the IPL, accept a licence fee from it, and leave the league to govern itself subject to regulation. The government should not get involved in appointing officials to the BCCI. Nor should it provide any money. The BCCI should continue to enforce its constitution and operate as an autonomous government-recognised regulator subject to all public disclosure laws. Under these duties, the BCCI should continue to organise all non-commercial, representative cricket, as it has done for all these years.

This will preserve the BCCI's position and allow other investors to form leagues if they wish to under its regulations (for which they can pay the BCCI a license fee), or negotiate with the IPL to form new franchises. It will also preserve the primacy of the representative game in India, while allowing the franchises to scout players and build their own infrastructures. Essentially, government of India should force the BCCI to give up ownership of the IPL in return for legal recognition as the legitimate regulator of the sport in India.

Finally, the ICC is not the result of any statutes in any country either. Whatever people may say about the sanctity of contracts, history shows that unless contracts can be enforced by the threat of physical force (via the legitimate power of a sovereign government), they are easily broken. The ICC's power, such as it is, comes from the fact that it has money to distribute and organises tournaments to make money. Its problems arise from the fact that its ability to make money depends entirely on the goodwill of its members. It exists at the pleasure of its membership.

The other option - for the ICC to be an "independent" corporation (bluntly, enforcing its will by withholding cash) - is not plausible, given the global popularity of the sport, because it is very likely that investors will eventually simply ignore the ICC and set up their own cricket matches.

Kartikeya Date writes at A Cricketing View and tweets here

Comments