April 13, 2010

The IPL and the limits of the free market

The Ravindra Jadeja verdict suggests the IPL is attempting to put in place checks on player power in an effort to protect the league's interests

Just as season three of the Indian Premier League began, Ravindra Jadeja of the Rajasthan Royals was banned for attempting to renege on his contractual obligations and sign with another franchise. Midway through the tournament, his team appealed that it had lost a player for no fault of its own. Unable to recruit an alternative at a late stage, it wanted the prohibition removed.

At the end of March, the IPL Governing Council appointed a one-man committee comprising Arun Jaitley to hear the Jadeja appeal. President of the Delhi and Districts Cricket Association (DDCA) and a member of the IPL governing council, Jaitley is also a former Indian law minister and one of the country's best-regarded lawyers.

Appearing before him were Jadeja and Rajasthan Royals on one side and Mumbai Indians on the other. Jaitley was to decide if Jadeja had solicited Mumbai Indians, as the IPL had believed when it banned him, or if the Mumbai team had, instead, sought out the cricketer. All three parties agreed to abide by his ruling. On March 26, he delivered a nine-page "judgement" upholding Jadeja's ban. However, the document he drafted has wider implications.

There are two reasons for this. First, in the three years it has been around, the IPL has acquired a reputation for writing and rewriting rules as it goes along. The Jaitley verdict offers an attempt at consistency and legislation. More pertinently, it suggests the limits of player power in the IPL. As the initial three-year contracts end, the league authorities fear giving cricketers untrammelled right to choose the highest bidder, and negotiate or tear up contracts at will, could essentially end up subverting a very young league.

As Jaitley says in his ruling, "Leagues such as the IPL will survive only if utmost purity and honesty is maintained. There must be a strict compliance with the rules. Money has value, but in a league like the IPL, loyalty has a greater value." The affirmation of this principle could play a crucial role in the coming months, as 10 franchises compete to buy the best players and put together teams for the 2011 season.

Yet that is getting ahead of the story. First, the Jadeja episode - with all its drama, with two international players accusing each other of lying, with India's biggest business corporation questioned on ethical conduct, with email passwords being disclosed to investigators - requires recounting.

Opening overs
Weeks before the first IPL match in 2008, an Indian team led by Virat Kohli won the Under-19 World Cup. Members of this team had not been part of the big IPL player auction in February 2008. Yet they had to be accommodated in a tournament one of the professed goals of which was giving young Indian talent top-level exposure.

As such, the Player Trading Rules of the IPL allowed franchises to sign Under-19 World Cup Indian team members directly for, initially, one-year contracts, to be automatically renewed in 2009 with the signing of two-year contracts, valid till the end of the 2010 season. Fees were fixed:

Rs 12 lakh per season for a player who had not played Ranji Trophy/first-class cricket
Rs 20 lakh per season for a player who had played Ranji Trophy cricket
Rs 40 lakh per season for a player who had played for India in a Test or an ODI or a Twenty20 game

The Jadeja episode - with all its drama, with two international players accusing each other of lying, with India's biggest business corporation questioned on ethical conduct, with email passwords being disclosed to investigators - requires recounting

A player's fee eligibility would be decided at the time of final squad registration, 30 days before the start of a season. As such, a rookie who got, say, Rs 12 lakh in year one could, theoretically, treble his fee in year two if he won his India cap between the first and second IPL seasons. Such fee enhancements benefited, for instance, Kohli and, indeed, Jadeja.

The Under-19 World Cup players could not be traded between teams. If a franchise released such a player, another team was free to sign him up but only for the fee he was entitled to as per the IPL formula. In essence, there was a salary cap imposed on him.

Jadeja duly played for Rajasthan Royals in year one. Just before IPL II, in February 2009, he made his one-day international debut for India. He had been rethinking his options even before that. In December 2008, Rajasthan Royals sent him his two-year contract. He delayed signing it and eventually agreed to only a one-year contract, on January 9, 2009.

The contract ran till December 31, 2009. In terms of cricket obligations it ended, really, with the conclusion of IPL II in May 2009. At this point, there occurred a strange discrepancy in perceptions. Rajasthan Royals thought Jadeja was still on their rolls for 2010 and it was only a technicality that he had not signed a piece of paper. Jadeja, on the other hand, thought he was a free agent. He thought he had walked out of a job and was at liberty to find another. As Jaitley records, "He informed me during the hearing that he was unaware of the legal obligations, and having become an ODI and T20 player for India, he thought he could command a higher price."

He was, of course, wrong.

At the death
Now began Jadeja's search for a new employer. He first met Venkatesh Prasad, the former India fast bowler and bowling coach, now with the IPL's Chennai franchise. Negotiations began when Jadeja and Prasad (as bowling coach) were in England with the Indian contingent to the ICC World Twenty20.

"[Jadeja] admitted," writes Jaitley, "that he had discussed the prospect of joining Chennai Super Kings in June 2009, when Venkatesh Prasad met him in London. Prasad clearly told him that he must first get the 'no objection' from Rajasthan Royals."

That deal went nowhere, but in December 2009, Jadeja agreed to play for Reliance Industries - the corporation behind Mumbai Indians - in a corporate cricket event. "[He] met Nikhil Meswani [a director of Reliance Industries] in Jamnagar, where he had gone to play a festival match," Jaitley records. This meeting took place on December 29, 2009, and "Meswani wanted to know if he was free to join Mumbai Indians". Jadeja "claimed that his contract was expiring" on December 31, 2009, and sent a copy of it to Mumbai Indians for verification.

It is here that the story gets mysterious. Jadeja alleges two documents were now drafted:

1. On January 2, 2010, he "claims that he was induced to sign a contract… by Rahul Sanghvi… agreeing to play for Mumbai Indians". Sanghvi, who once bowled spin for India, is part of the Mumbai Indians management.

2. In February 2010, Jadeja says, Mumbai Indians sent him the draft of a letter "in legal language" that he was meant to forward to the IPL governing council. It pointed out he had not signed his third-year contract with Rajasthan Royals and should be permitted to move to another team.

Sanghvi denied all of this. Jadeja could not present a copy of the player contract. Jaitley says: "It is one person's oral testimony against another and in the absence of any corroboration I am unable to opine on the existence of such a contract."

The "legal language" letter drafted for Jadeja was another matter. Jadeja, who disclosed his email password to the committee and allowed it to access and ascertain his mail exchanges with Rajasthan Royals and Mumbai Indians, produced a fax. Jaitley says it all: "Ravindra Jadeja/Rajasthan Royals sent to me a copy of a letter dated 2/2/2010 from the fax number which is used by Rahul Sanghvi in the Reliance/Mumbai Indians office… Obviously something was brewing between Mumbai Indians and Ravindra Jadeja."

Eventually Mumbai Indians acknowledged the "legal language" draft. It even gave Jaitley its own copy of the fax/letter.

Under the IPL rules, a franchise cannot "approach any player who is registered and has a current, unexpired player contract with another franchisee". Mumbai Indians' argument is, it never approached Jadeja; it only answered Jadeja's call and helped him build his case before the IPL governing council. It would have offered him a contract only if the league authorities had granted him permission. The difference between those two positions may seem minor but the legal consequences are vastly different.

Since Jadeja failed to produce this contract, the Mumbai Indians managers' contention that they did not approach him, he approached them was given the benefit of the doubt. The one-year ban on Jadeja was confirmed. As for Rajasthan Royals, it was "regrettable that acts of others" caused the team to lose "an important player".

Jadeja was dogged or uninformed enough to breach the rules, while Mumbai Indians did not explicitly break the rules. The verdict recognised this: "Mumbai Indians had also 'approached' Ravindra Jadeja inasmuch as they were in active communication with him regarding his obtaining 'no objection' from IPL, permitting him to play for Mumbai Indians, particularly when Rajasthan Royals was desperately trying to get Ravindra Jadeja to play for them… I am recommending a sanction of warning to Mumbai Indians." Any future "approach" or "response to approach" would, however, invite "more deterrent action".

As the initial three-year contracts end, the league authorities fear giving cricketers untrammelled right to choose the highest bidder, and negotiate or tear up contracts at will, could essentially end up subverting a very young league

Beyond the boundary
The Jadeja case is the first of its kind in the history of Indian sport. The reason Jaitley came down so hard on the cricketer was because sections of the IPL governing council are worried about what a complete free-market situation will mean for the league.

As the three-year contracts end and another massive auction beckons, the franchises want some sort of loyalty clause built in. They want the security of retaining core players, rather than having to rebuild from zero. On their part, star cricketers want the most liberal regime possible. A senior Indian batsman, in great form for the past year and captain of his IPL team, has semi-jokingly asked his franchise owners to put him on the transfer/auction list. They have no intention of losing him, if they can help it.

Jaitley's emphasis on "loyalty" and the integrity of the league is indicative here. It suggests the franchises will be given some protection. That aside, are player fee caps - as in the case of Jadeja - or even overall recruitment budgets (enhanced to US$7 million a year per team from 2011) sacrosanct? There is an intriguing line in Jaitley's verdict: "[Jadeja] wanted to… increase his amount in the third year from Rs 40 lakh to about Rs 2 crore. He admitted this in the course of the hearing. He sought a better bargain from other franchises."

If his IPL-designated fee was Rs 40 lakh, how did Jadeja expect to get Rs 2 crore - and why were IPL franchises, run by hard-nosed business executives who read every semicolon in a thick contract, even discussing it?

Finally, some of the IPL franchises - Mumbai and Bangalore, to name a couple - are part of big business corporations and obviously fit into huge promotional budgets. Others - Jaipur, Kolkata - may not have such advantages. What happens if, in addition to the IPL fee, a business house offers a "job" and a regular "paycheque" to a player?

An IPL governing council member doesn't refute the stories that have already been heard. He admits that, unchecked, this phenomenon could create a lopsided, uncompetitive league, with two or three resource-rich, ultra-strong teams. "At some point," he says, "there will have to be a crackdown on the corporate owners." That is the underlying message of the Ravindra Jadeja-Mumbai Indians chapter.

Ashok Malik is a writer in Delhi

Comments have now been closed for this article

  • The on April 14, 2010, 23:42 GMT

    I'm still not totally clear on why someone with an expired contract is contractually bound to the previous employer and has done anything wrong. But assuming that he DID in fact need a release to work elsewhere in the 3rd year and violated some obscure rule, we've still got the issue that he went to the IPL for guidance about his obligations. If he had the wrong idea and was being led up the garden path, why didn't they sort him out? Sounds awfully like they found they had a young bloke on a technicality, he asked them for a ruling and instead they hung him out to dry to make an example of him to intimidate the rest of the playing staff.

  • Dinesh on April 14, 2010, 9:54 GMT

    On the face, it seems that Jadeja is unethical, but after going through the details presented here, it seems the Mumbai Indians are more at fault than Jadeja. It is clearer from the fact that Jadeja expecting more money than what he is eligible for, itself speaks for the fact that the player is not aware for the stiff Player trading rules of the IPL. But the same can't be said of Mumbai Indians. They should have been aware, given they are professional corporates unlike Jadeja - that even if they sign Jadeja, they can pay only Rs. 40 lac to him (not Rs. 2crore as expected by Jadeja) as per the IPL rules. It's not mysterious but gets suspicious after this. Mumbai Indians would have been aware that even if Jadeja comes out from Rajasthan, they have to pay him only Rs.40 lacs (but deceiving into negotiations with Jadeja that they pay him Rs. 2 Crore). At the last minute even if Jadeja comes to know that the is not eligible for this high amount, he will not be having any other choice then.

  • Terry on April 13, 2010, 22:30 GMT

    I think this shows what a joke the IPL truely is. To believe that a player in like Ravindra Jadeja is going to understand all of the legal mumbo jumbo at the age of 21 without 20 years as a Lawyer is rediculous. The problem wasnt Jadeja but the system. If the IPL wants to force players to play cricket for a particular team without a contract then they should ensure that all signings have to get approved by a representative of their board. Jadeja should have just been advised that he was required to play for the other team for an additional season if he wanted to play for the IPL. To ban a player for not being a lawyer is rediculous and misses the spirit of the game. It goes to show that the IPL managers dont understand what cricket is about. Why ban a player for not being a lawyer?

  • Kevin on April 13, 2010, 21:17 GMT

    At the end of the day the person who got penalized is the one who didn't have any experience in dealing with the legal and political matters. I think India also lost as RJ would have got a much needed practice before T20 World cup. In fact he ended up worse than Pakistani players. I only hope that he performs well in World cup and all the teams want to sign him for a big pay check.

  • Ramakrishna on April 13, 2010, 21:03 GMT

    Nice article Ashok. I believe there is a cap on the amount the franchises can spend on the players. In that case, even if say MI want to buy all top players they couldn't as they would exceed the cap. And it may not be correct to hold 2/3 players and keep the others in auction, as those players will lose the opportunity to get a better deal. I expect everyone except the players with legendary status be in auction for next year. This would allow the 2 new franchises to get a pretty good share of top class players. Wonder if Warne is bought by some other team.

  • Dummy4 on April 13, 2010, 18:43 GMT

    Great article... Something is always going on fishy about the IPL. Its like increasing the BUZZ about it and making people watch it right till the end. Ravi Jadeja, poor guy was on a good form till the last international match now is banned from IPL. As far as I'm concerned, anything can happen in the IPL!

  • jay on April 13, 2010, 13:44 GMT

    So basically here's the lowdown:

    Jadeja signs a one-year contract, after turning down a two-year deal, and nobody disputes that the contract he signed was for one year. After his contract is up, he then wants to sign a higher offer with another team. This is grounds for a one year ban. Furthermore this is so bad that the team that wanted to sign him has to prove that they didn't really want to.

    Just a question - let's say he steps on Sreesanth's foot and shreds his knee playing in an ODI last December. Who here thinks Rajasthan Royals are going to be jumping forward to make sure he gets the second year of his deal?

    In American sports (and don't laugh because the IPL reaching this is the DREAM of Lalit Modi) if this sort of thing went down, the resolution would go in favor of the player or there would be a high likelihood of a strike. Player's unions are among the strongest in the world and for good reason as these leagues, which make tons of money, would not exist without them.

  • Aditya on April 13, 2010, 11:36 GMT

    Thanks for this inside story. Details everything very well. More like a lawyer's read than a cricket fan's. But I like it. Any justice body will have to think twice before penalising Mumbai Indians, because its owned by Mukesh Ambani who has a history of massive legal battles with his brother. Hope to read more from you.

  • Rob on April 13, 2010, 10:50 GMT

    The IPL is born out of money and will consequently evolve money's way. This means that in the end we will see the same thing as with football - soccer - in europe. Players will have no more club/regional loyalty, but only loyalty to their own purse - and their lady's purse of course. It is very unfortunate, but it is also the way of the world we live in today.

  • Srinath on April 13, 2010, 10:26 GMT

    An extremely insightful,neutral article. It's extremely apparent now that one man is calling all the shots at his will and getting all the cash in the world. This truly is dictatorship going unnoticed behind the scenes.Young cricketers do not deserve such treatment.And that the board is silent on all this is ridiculous. Painful,shocking phase in indian cricket

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