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| Kanika Datta: IPL needs 'fit and proper persons' test |
| Kanika Datta / New Delhi Apr 29, 2010, 00:35 IST |
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When it started, Lalit Modi said the Indian Premier League (IPL) was supposedly modelled on the hugely successful English Premier League (EPL), which began in 1992 and has emerged as one of the world’s most popular and richest sporting events. Actually, there are significant differences between the two in terms of structure and format that could partly explain why the cricketing version is so convulsed in controversy within three years of starting. This is not to say that EPL hasn’t had its share of disputes, but nothing on the IPL scale, involving senior ministers or attracting the attention of the income tax authorities.
The divergence begins with ownership structure. EPL is a corporation owned by the country’s top-20 clubs that participate in the 10-month-long tournament on a promotion and relegation basis. Shareholding, thus, is driven by meritocracy. Each season, the bottom three clubs drop out and relinquish their shareholding to three clubs that top the lower league, losing access to lucrative broadcasting and other revenues. Meanwhile, the top-six clubs in EPL qualify for different, and equally profitable, European competitions. All the participating clubs have a say in the way the tournament is run and administered.
On the other hand, IPL is owned by the powerful and cash-rich Board of Control for Cricket in India (BCCI) and is a one-way street. It leases out team franchises that parties have to bid for, a critical difference with EPL in terms of the balance of power between participating teams and tournament administration. This not only opens the door for corruption and opacity as it appears to have, it also gives the money-making aspect of the tournament precedence over meritocracy, which is surely the very basis of any sporting event.
This is already blatantly evident in the tiresome TV commercials that machine-gun a viewer every second and excessive on-field branding, all of which make EPL almost look like a poor cousin. Also, IPL is played among a closed group of the same teams that earn a fixed share of the pooled revenues which is only partially linked to the previous year’s performance. For fans, this scarcely matters, but surely this amounts to creating a protected monopoly, since the entry of additional teams is, again, dictated by the IPL administration.
Obviously, it is difficult for IPL to replicate the EPL format. In the latter, teams that are relegated don’t vanish; they continue to play in the lower leagues that are administered by the English Football Association (which is, by the way, a “special shareholder” in EPL with veto rights over the appointment of top executives and rule changes).
This, however, is the key issue with IPL that people so dazzled with its monetary success have overlooked. Because it is so unique in its “privatised” structure, IPL operates in a niche within the larger cricketing universe. Unlike EPL, which competes with similar leagues in Spain, Germany, Italy, France and so on for players, owners, fans, viewership and even managers, IPL has no competitors. It is a global monopoly and, in fact, has been allowed to be one.
Within India, BCCI, the body that is supposed to promote the game in the country, annihilated Subhash Chandra’s competing Indian Cricket League by effectively barring contestants from playing for the national team. Nor has it cared to promote the scores of lower-level club competitions that could have provided ballast for IPL. The irony is that in imaginatively combating a national monopsony, IPL has created a privatised monopsony.
This explains the impunity with which IPL has been able to get away with opaque rules of franchise ownership and so on. True, it is not as though EPL clubs have entirely desirable ownerships. There is Roman Abramovich, a Russian tycoon with questionable sources of wealth, who bought London club Chelsea, Mohammad Al Fayed, the Egyptian owner of Harrod’s whom Egyptians prefer to repudiate, who bought Fulham, Thaksin Shinawatra, Thailand’s former prime minister who stands accused of all manner of corruption, who bought and then sold his stake in Manchester City.
But whatever their provenance, fans know who own their clubs. In IPL, this is increasingly coming under question and putting the tournament in disrepute. Also, unlike IPL, EPL directors stand to be disqualified if they hold shares in EPL clubs.
IPL stresses financial criteria (bank guarantees and so on) for potential owners. In 2004, EPL introduced the “fit and proper persons test” or FPPT to club ownership criteria to ensure that, among other things, owners were not guilty of criminal offences, were not involved in running another Premier League clubs and were not involved with insolvent companies. It was under the FPPT rules, for instance, that Shinawatra sold his stake in Manchester City after his wife was found guilty of tax evasion. In IPL, since nobody’s even sure who owns what, the question of FPPT does not arise.
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