8/3/2019 BCCI-Caught Behind in Economic Times

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BCCI:CaughtBehinhecricketboardhasviolatedcompetitionawwhenhandingout IPL'song-termTV,mobileandwebsiterights

MSHARMA

port, and particularly cricket, has be-come big business in the country. Therecent inquiries initiated by the'd of Control for Cricket in Iridia

ICCI)againstLalit Modi have brought se-jous financial irregularities, includinglid-rigging in the award of contracts dur-gprevious three Iridian Premier League)L) seasons, to the fore. But the competi-ton issues involved thereinl have been

Iverlooked. The BCCI's conduct of award-gcontracts, say,for broadcasting rights,ises serious competition issues. With anIverarching competition watchdog, Com-etition Commission of Iridia (CCI), in ac-ion, the time has come to bring the anti-ompetitive practices of the cash-rich

lodyto public notice.For the record, competition issues inricket arose for the first time when the

ICCI,by abusing its dominance, refused0 recognise Essel Sports-promoted Iri-lian Cricket League (ICL) and, instead,lromoted its own 'official ' Iridian Pre-

ier League (IPL) for Twenty-20 matches.le issue never reached CCI as it was not

lin force at that time and the MRTP Com-

ission couidnotgo beyond investigation.lut that is history. .

The world over, competition in sports is

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regulated like that in other sectors of theeconomy.For instance, Sin).onRottenberg,a well-knownUS economist, in his paperTheBaseballPlayers' LaborMarket statesthatthe "economicsof professionalsportsleagues couldbe analysed using the sameeconomicframework as forany other ind-ustry'. SinceIridianowhas amodern com-petition law,competition issues in cricketcarmot be allowed to be overlooked anymore.Letus first examine them in the con-textof the BCCI-sponsoredofficial'IPL.ButbeforeIdwellon them, itmaybe aptto

remove doubts on the vast scope of theCompetitionAct,2002.Sufficewouldbe tostatethatwhiletheBCClmay ormaynotfitin the definition of a 'public authority' forthe purposes of applicability of the RTIAct, which was the Competition Act,whichequally coversmostof the state-con-trolled enterprises and runs on the basicpremise of 'competitive neutrality'. Con-sequently,we have the CCI examining acomplaint of cartelisation med by Re-

liancelridustries, thelargest private enter-prise, against the three public sector oilmarketing companies. Hence, no enter-prise inthe country isnowpermitted to in-dulge in any anti-competitive businesspractice prohibited by the CompetitionAct.Ofcourse,theBCCIisnoexception.Irithisbackdrop,letus nowseehowtheBCCI,perhaps out of ignorance, is continuingwith apparently blatant violation of thelawbyabusing itsmonopolist position.

COMPETITION ISSUES LIKELY WITH IPL

Without going into the past deeds, the waythe award of contracts in IPL have been

handled by the BCCI till now is likely togive rise to grave competition issues intimes to come. Let us have atlavour of some

of these issues.~ Bid rigging: The allegation of rigging ofbids by IPL bosses as well as collusionamong bidders, like cartels, is the most se-rious crime in competition law.Under theCompetition Act, '~y agreement whichdirectly or indirectly results in bid riggingor collusive bidding shall be presumed tohave an appreciable adverse effect on com-petition." The allegations .that IPL bossesallegedly advised the DhootsandAdanis tokeep their bids modestly above $300mil-lion or that IPL administration also alleg-edly told the promoters of Kochi consorti-umnottoputmorethan$300millionon thetable are sufficient toprovoke a complaintto CCIunder Section 3of the Act.

~ Grant of exclusive broadcasting rights:

This is the most widely-known concernand'directlyproves the allegation of abuseof dominance by the BCC!. As the sole

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agencytocontrolthe organisation of crick~ ty of longer duration, of overthree years,etinthecountry,theBCClisundoubtedlya as granted by the BCCIand that too for amonopolist provider of. cricket-viewing wider range of rights can defmitely re-services forthe peopleof Iridiaand,hence, strict competition.This isparticularly thean enterprise ina 'dominant position' un- caseif thebroadcaster toois ina dominantder the Competition Act. The BCCIhas position. Thus, if Sonycanbeprovedto bebeen 'selling'broadcasting rights to its'ex- havinga largemarket share of viewershipclusivepartners' for along time. in telecast of cricket matches in Iridia,be-Firstly, how these 'excluSivepartners' sides BCCI,it willalso facethe charge ofwere selectedis shrouded inmystery.The abuse of its dominant positionfromothercompliance with the Competition Act is competingTVchannelssuchSTARSports,nowmandatory forselectionof anyexclu- ESPNorTEN Sports,etc.sive'agent' orpartnerforanybusinesspur- ~ Mobileapplication rights:DCIMobilepose, i.e.,it has to be doneby competitive Studios,a divisionof DotComInfoway,inbidding process in a fair and transparent conjunction with SigmaVentures of Sin-manner. Secondly,even if one overlooks gapore,hasreportedlyjointlyacquiredthethis selectionprocessof theBCCI,the con- rights to be the exclusivemobile applica-centration of rights in a few agents seri- tion partner and rights holder for the IPLously hanlpers the prospects of fair play cricketmatches worldwideforthelongpe-andserious competition issuesarise. nod of thenext eight years (mcludingtheNowlet us see what the BCCIhas done. 2017season). Recently,they released theTheboard soldfive-yearcontracts toESPN IPLT20mobileapplicationsforthe iPhone,STARSports (1995-99)nd Prasar Bharati Nokia smartphones and Blackberry de-(1999-2004).hereafter, it soldthe rights on vices. Soon, these will be made availablea territorial basis and NimbusCommuni- acrossallothermajormobileplatforms in-catioDS'boughtthe rights for Iridiaforfive eluding the Android, Wmdows Mobile,

years (2006-10), ESPN Palmaridothers. ThisisalsolikelytoraiseSTARSports for overseas similar exclusivityissues.matches. for four years ~ Offzcialwebsiterights: The IPLhas re-(2005-08)and Zee Televi- port:edlynegotiated a contract with a Ca-sion for matches in neu- nadian company, Live Current Mediatral venues for fiveyears Iric,torun and operate its portals and the(2006-11).The broadcast minimum guarantee has been negotiatedrights forIPLweresoldex- at$5QmillionoverthelongextendedperiodclusivelytoWSG-SonyEn- of the next10years.Theofficialwebsiteof.tertainInent combine for the tournament iswww.iplt20.com.Thisis10 years reportedly for also likely to raise similar exclusivity is-$1.03 billion. Although sues as market foreclosure for new en-grant of exclusive broad- trantsisalmostinlminent. ."casting and telecasting .,~, '$' .....

rights isacommon commercial practice in INTERNATIONALEXPERIENCithe sport industry,it isimportantto consid- The law on the subject is almost settled iner the impact of such long-term agree- coUntries having a developed jurispru-ments on competition in this market. The dence on competition issues in sport. For

BCCI'sgrantofexclusiverightscanleadto instance, Iri the EU,EC competition lawanti-competitiveconsequences such as (i) is now applicable to economic activitiescreation of barriers for new entrants, (ii) generated bysport, particularly after thedriving out existing competitors, and (ill) Mecca-Medinacase(2004).rianother case,.foreclosure of competition by hindering UEFAcase(2OO1),heECcommission orig-entry intothemarket.Allthesearespecific inallyobjectedtothe joint sellingarrange-violationsof theCompetitionAct. . ments, which were notified in 1999,be-The grant of exclusivityforsuchlongduo causetheEuropeanFootballOrganisationrations willf6reclosure competition onac- (UEFA)sold all Chanlpions League TVcountof the factthat atthe timeof renego- rights inonepackagetoa singlebroadcast-tiation at the end of the contract, the eronanexclusivebasisforuptofouryearsbroadcaster with the exclusiverights will at a time. ASa result of the commission'sb~ at an advantage in.comparison to the objections,UEFAproposedanewjoint sell-other players due tothe massiverevenues ing arrangement, operational from theit would have amassed during that long 2003-04football season, whereby UEFAtime. Therefore, it does not allow for a real .agreed not to sell the rights to televise theallocationof rights atthe endof exclusivi- UEFAChampionsLeagueforlonger thanaty.Yet,exclusivecontracts forasinglesport three-year duration.Withthesedecisions,

event or for one season in a givencham- the duration of any exclusivity in sportspionship would not normally. pose any coptracts has been limited to a period ofcompetition problem.However,exclusivi- threeyearsinEurope.

-CompliancewithheCom~nActls'mandatoryforselectinganyexclusive'agent'orpartnerforanybusinesspurpose

ANIMISI

Iri the US, broadcasting issues in PoP\)sport are governed by 1:l\eSports Brccasting Rights Act, 1961. Competitionsues relating t() professional sport harisen primarily mpriVate litigationder section 1of the Sherman Act.

Although there are some antitrust'emptions - such as baseball, collecbargaining and pooling of broadcasirights - yet,conductnot coveredbyexemptions remains subject to the atrust laws, and is.typically analysedder tile 'rule of reason'.,,!J'}lus,'iU.tl1oughtheputcom~.maY-be dcUlt t6be pi-edicied, one Cfu1safely say'the BCCI and its exclusive br,oadcasmay soon have questions to answer bethe CCIin case a vigilant viewer or a c

peting broadcasting TV channel or asumer group decides to me a compllThe CCI is also not likely to ignore thetIed international law on the subjecproactive CCI may also take up suo r.cognisance of such anti-competitive 1ness agreements. .The interest inmatches will be determined by the levcompetition in the league. The profes!al sports leagues in the US have strover the years toensure 'parity' astheIa viewer iswilling to pay isdirectlyre]totheenjoymenthegetsfrom watchingame. Therefore, it is in the interest 0league organisers and the BCCI to enan adequate level of competition thaisustain demand and determine the :

run viability of the league.

(Theauthor headscompetitionlawpracticVaishAssociates.Vzewsarepersonal.Hisaate VaibhavChouksecontributed tothean