IPLs A bouquet of scandals
In a tournament enjoying the most religious audience, are malpractices and corruption tolerable?

One of the most interesting developments to have happened in the Indian entertainment scenario in recent years is undoubtedly the Indian Premier League (IPL). In a country where the television sector has seen a massive growth ever since liberalization of the section, there is cutthroat competition to catch audience attention. From films to soap operas to reality shows, the channels try every possible option to tap the ever growing fidgety audience’s attention as there is loads of money involved in the entire process.

Internationally, entertainment is dominated by films and sports. We have no dearth of the former, and certainly no dearth of indigenous channels catering to the same. There are numerous sports channels in India, but they mainly feed us international sporting events. Be it the English Premier League, the NBA or F1, increasingly the Indian audience had been warming up to global sporting events and thereby adding to their revenues. However, there was no domestic sporting event which generated even an iota of enthusiasm which could be ‘profitable’ for channel investors.

For any sporting event to be financially exploited, you need a fixed formatted tournament. The domestic leagues generate so much fanfare and revenue that even with sparing international events (each take place almost after four years) it remains very popular and lucrative, generating enough revenue for both promoters and players to make millionaires out of them all.

When you think of sports in the Indian context and the first word that automatically comes to mind is Cricket. Cricketing events like ODIs have been major attractions in Television, and it’s broadcasting on of the biggest cash cows for both BCCI and any channel it sold the rights to.

Thus from entertainment business point of view, a cricket league made perfect sense. The idea to formulate such a sport league first came from an entertainment channel head, namely Subhash Chandra of ZEE. Eventually he got into trouble with the BCCI and his brainchild the ICL had to be abandoned as the BCCI honchos realized that this was too good an idea and decided to execute it themselves.

The whole point of talking so much about the evolution of IPL is to drive home the point that IPL was more about hardcore business and less about a sporting development. IPL is not a tournament of the top notch teams from a huge pool of teams, qualifying through successive subordinate leagues. The teams of IPL were fixed, and irrespective of a team’s performance, it was guaranteed to feature in the next round, as there are no disqualifications or demotions. The teams themselves were called Franchisees, which is a business terminology rather than a sporting one. The region based team formation gave a captured fan base which endorsed its team irrespective of its performance (take for example the KKR last year, performance wise it was in the slumps, but that did not prevent its owners from profiting!). The raking in of Bollywood biggies added to the charisma, tapping the two biggest obsessions of the Indian entertainment scenario and thereby ensuring automatic endorsement and promotion of the newly formed league. The presence of Indian and international players ensured that public interest remained glued on, and the new format of 20-20 cricket gave a fast paced high adrenaline entertainment that just could not fail to capture the audience. The formula on the whole, ensured a steady and well protected share of a huge market potential that can be repeatedly exploited by any investor seeking quick and long term lucrative returns. It is not surprising that the corporate world lapped up the idea. However, since IPL was more about business than cricket, the main action was not in the fields as we believed, but in the closed room transactions behind it all. What the recent controversy has revealed is that waction stank of all corrupt practices possible in the capitalist framework.

First and foremost is the lack of transparency in the entire bidding process. Any bidding process has to be monitored, preferably by a neutral observer, to ensure fair competition. What the current imbroglio has revealed is that even the BCCI Board of Directors did not have clear idea about the proceedings, leave alone some independent observer. If Shashi Tharoor’s allegations are true, the Kochi consortium was told to bid below $300 million while the other were told to bid above $ 300 million by the very people who were to determine the result of the bids. No bidding process can operate with active intervention of the decision making authorities a priori to the actual biddings, and least so if the interventions are on the bidding amount, the main determinant criterion of the bid! The government is seriously considering referring allegations of rigging of IPL bids to the Competition Commission of India for a thorough probe, as the allegations fall directly within the domain of the competition regulator that was set up in 2003. Section 3(3) of the Competition Act, 2002. This clearly brings forth the issue of vested interest of the authorities.

That was highlighted by the murky details of actual stakeholders of the franchisees. In the age of liberalized finance, it is very difficult to track the flow of actual funding to its original source. Money flows through numerous subsidies and shadow entities, each murkier than the rest, as there existence is only on paper. Tracing the route too is difficult as channels such as through Mauritius or other tax havens are notorious for their lack of transparency. It is thus difficult to verify whether the supposed owners are real or just facades behind which someone else operates. To make matters worse, even the names of the owners are not properly documented. For example, on 26 April, the BCCI President Shashank Manohar stunned all by revealing that the bid documents for Rajasthan Royals did not have the names of Shilpa Shetty or Raj Kundra, whom we all have known as the owners for three seasons! This allegation was strongly refuted by both the names, and matters are still to be formally resolved, but this is just an example of the level of fogginess in the bidding process behind the entire IPL. To make matters worse, 40% of the Royals franchise is revealed to be owned by Suresh Chellaram, who is currently ousted IPL chairman Lalit Modi's wife's brother-in-law, which smacks of nepotism.

The focus of the controversy has been Union Minister Shashi Tharoor and his alleged role in the Kochi Consortium bid. Mr Tharoor was supposedly acting as a mentor of the team, which can be a euphemism for any kind of activity. His involvement was further complicated by the presence of Ms Sunanda Pushkar, a close confidant of Mr. Tharoor, who allegedly owns ‘Sweat Equity’ in the Kochi consortium. ‘Sweat Equity’ is a business term which means that a person owns equity (shares or stake) in a business even though the person does not have any monetary investment, on ground of the time and effort invested in the business’s success. It is thus, returns for the labour and ‘sweat’ the person has spent, a form of compensation for one’s efforts. Since the description itself is pretty subjective in nature, its actual interpretation can be subjective as well, which opens up all possibilities of malpractices.

To add to matters, it has also been revealed that IPL was exempted from entertainment taxes by the Mahrashtra Government, which has drawn flak from the Comptroller and Auditor General (CAG) office. No possible explanation for the same exists barring vested interest of political parties or influential leaders, who are known to be involved in BCCI activities in any case. All these skeletons that are still toppling out of the cupboard show that the entire IPL business process was fraught with irregularities, malpractices, corruption and nepotism, which almost exhausts all possible wrongdoings.

However, given the alarming proportions of the entire bouquet of scandals, it just might be too much to be fully exposed, and it’s already suspected that much of it will be swept under the carpet over time. Given the high profiles of those involved, it can just be true. Mr Lalit Modi had once claimed that there is no recession in IPL, while referring to the global financial crisis. Ironically, that might just prove to be true, even after this crisis.