Posts Tagged ‘ World’s Most Interesting News Today ’

IPL – The Ultimate Fixing

As the country wallows in cricket mania my views on the Indian Premier League, or IPL will surely bring brickbats my way. I firmly believe that the IPL extravaganza, is that it is no longer cricket. After betting and match fixing 5-10 years back (remember Hansie Cronje in 2000), this is the ‘ultimate fixing’ by Cricket Administrators and Players.

What prompted me to write this column is the controversy over ownership of Kochi IPL team is not because of my domicile, but my understanding as a footballer, of the ownership structure of the English Premier League, or EPL clubs on whose lines is Indian Premier League was formed.

The EPL is a professional league for football clubs, born out of the success of The National Football League, or NFL the highest level of professional American football. Together the NFL and the EPL are two of the most profitable and popular sports leagues in the world. Their respective league rules however mandate contrasting ownership structures.

The NFL, arguably the most lucrative and successful professional sports league in the world, has a somewhat unique ownership structure, one which allows it to maintain strict control over management and ownership of teams. Unlike other leagues, there is absolutely no corporate ownership allowed, and the ownership groups must contain 24 or fewer individuals. The general partner and his/her family must together own thirty percent or more of the team, and any change in ownership is strictly regulated. The reasoning behind this is also linked to ensuring focused management with a singular vision as well as consistent and long term ownership. The ownership of the 32 teams for the most part is transparent, and for all intents and purposes, above-board.

The 43 club EPL is the exact opposite, where size and influence mattered. The sale or purchase of Manchester United, Chelsea, Liverpool and Arsenal are frequently debated, and due diligence and background checks that have been conducted are sometimes questioned with respect to their thoroughness. The ownership guidelines have been questioned, too, along with their implementation. The EPL faces, as well, questions about the nature of foreign investment in its clubs. While foreign investment has propped up the league and made it a global powerhouse, many of the clubs are debt-ridden, and the cleanliness of the funds and ownership has been a subject of mass speculation.

Globally, there isn’t a hard and fast rule that describes the structure of professional sports leagues; nor is there any such rule when it comes to the ownership pattern of the teams within them. Also, it is true that the fact remains that ownership in professional sports leagues — especially where there are large consortiums owning a particular team — are hard to regulate and verify. While foreign ownership in the US leagues hasn’t been much of a factor, the EPL on the other hand has seen a mass influx of foreign investment, and there are concerns as to whether or not the ownership guidelines would need to be tweaked for curbing foreign investment. But what the debt-ridden EPL clubs desperately need is equity financing.

Other professional sports leagues follow different patterns. Some leagues own their teams outright; investors then pay for the rights to manage and host a particular team’s games. There is no clear-cut formula for how leagues are owned globally.

While the ‘tweetter war’ between Sashi Tharoor and Lalit Modi goes on and much is being talked about on the equity ownership of the new Kochi franchise. While it would be premature to speculate on whether or not the ownership of the ten franchises is of questionable antecedents, there seems to an iron curtain when it comes to information on team and ownership. To complicate things further a smoke cream and charade is also created with the Icon Players and the Bollywood Celebrities. The fact remains that IPL is one of the only global sports leagues about which so little is known when it comes to the stakeholders.

Until the Kochi franchise fiasco, equity ownership was a non issue for the IPL Czar, Lalit Modi; but suddenly he is taking of transparency in ownership. So as the first step towards transparency, let Modi come out with a clear-cut guideline of ownership which would stipulate the ownership eligibility criterion. Also let him down the iron curtain and disclose the funding and ownership of the other ten IPL franchises and the two new additions. Let us discuss ownership of Dabur sion and brother of Modi’s step son in law in Kings XI Punjab and Nigeria based businessman and Modi’s brother in law in Rajastan Royals. Let him also disclose his Mauritius to India channels into Kolkata Knight Riders and ‘facilitation fee’ of $80 million paid by Multi-Screen Media to World Sports Group to re-acquire the telecast rights of the league.

IPL after all, is about to enter the next phase of its existence. Investments in the teams are imminent. So are changes of ownership and of control of the franchises. Prior to these contracts taking place, there should be a clear cut methodology in place that governs how the league does its due diligence when it is to induct new ownership. Let us no longer hide behind celebrity actors, celebrity players and of course the cheerleaders. Let us learn from EPL and emulate a good model.

Are you game Mr. Modi. Really wish the Ratan Tata anointed ‘good M’ will not answer this question.

Cartoon Credit: Satish Acharya