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Beyond boundaries

Source : BUSINESS_STANDARD
Last Updated: Sat, Oct 20, 2012 18:41 hrs

When the Deccan Chargers, past champions of cricket’s Indian Premier League or IPL, were removed from the roster of teams recently, it drew attention to an odd fact: many of the owners of the teams in the league have not precisely been stellar performers of late when it comes to their core businesses. The Chargers’ owners, the Deccan Chronicle Group, is deep in debt, and its market capitalisation has taken a battering, down from Rs 4,912 crore in September 2007 to Rs 213 crore in September 2012. The government has said that the group’s accounts are undergoing a forensic audit. Another owner of an IPL team, Vijay Mallya of the Royal Challengers Bangalore, is also in trouble thanks to excessive borrowing to fund Kingfisher Airlines. His flagship group, United Spirits, might be on the verge of being acquired. It is now generally understood that the expansion of the airline was fuelled by bank lending that made little economic sense — a classic example of how a well-connected promoter can get bank finance when the logic of his business models dictates otherwise.

Indeed, to some these events only underlined the degree to which the league has been built on the shifting sands of crony capitalism, and the consumption and acquisition binges fuelled by the easy access to money that is the consequence of cronyism. There is more to it than that, of course; but other aspects of the nexus between the IPL and the corporate sector are as indicative of the state of India’s economy. For one, it is a characteristic of capitalist societies where regulation is insufficient that companies will overspend on highly visible but unprofitable ventures meant to keep them in the public eye. The case of infrastructure major GMR, the owners of the Delhi Daredevils and part-operators of the Mumbai and Delhi airports, can be classified as such. So, of course, can the Sahara Group, which owns the Pune Warriors and is currently involved in several lengthy wrangles with the securities regulator. The owners of the Chennai Super Kings, Indian Cements — whose promoter, N Srinivasan, is also a big wheel in the Board for Control of Cricket in India — has been subjected to questioning in the course of investigations into the business activities of the political leader Jagan Mohan Reddy, currently in jail in Andhra Pradesh. And the league’s overall sponsor, DLF, is now being seen as the poster boy of crony capitalism.

That the future of Indian cricket was mortgaged to business concerns who, even by their greatest well-wishers, cannot be said to be overly respectful of institutional structures is worrying. It is also a sad reflection of the degree to which greed, rather than the good of the game, dictated the policies of the Board for Control of Cricket in India. How can a league develop a firm foundation for the sport’s future when it is not run with responsibility in its initial years? Many of the characteristics of the IPL — its brashness, its prioritising of off-field spectacle as opposed to on-field drama, its teams’ disconnectedness from the cities they supposedly represent — might be traced to the nature of the enterprises entrusted with building it. Some might say that the expense of an IPL team helped cause the troubles that many of the league’s owners are in. But it is perhaps even more true that the oligarchs who are the IPL’s owners are responsible for depriving the Twenty20 game in India of the institutional credibility it so badly needs.




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