The Pitch is Ready for Indian Sports Law

Over the past four years, I have struggled to justify to numerous well-wishers, what exactly, I do. Sports Law in India, it appears, is just some euphemism for drafting agreements for cricketers to endorse colas and hair gel or purchase land.

The question marks about financial impropriety that have arisen during the third edition of the Indian Premier League (IPL), have eased the task of explaining why indeed there must be a structured Sports Law regime in India.

Notes on Sports in its subsequent posts will examine issues that we must raise and address in Indian Sports Law with some specific attention to the contentious IPL. This introductory post aims to highlight the changing landscape of Indian sport and the need for our own body of sports regulations.

How Sport in India has changed since 2005

Traditionally sport in India has found maximum popularity when it is reinforced as a metaphor for patriotism and national pride. Administrators of all sporting disciplines have thus churned out more India versus “The Other” games to cash in on the fervor of the flag.

However, bold early experiments such as the Premier Hockey League (2005) and the Indian Cricket League (2007), followed by the astoundingly successful Indian Premier League (2008), have dramatically changed the canvas of Indian sport. The sports pages in newspapers have suddenly been smothered with entirely new jargon – franchises, salary caps, central revenues, player auctions, transfers and indeed the one most frequently used nowadays – “The Commissioner”.

Even before one could say Shashi Tharoor, the IPL had grown into a multi-billion dollar enterprise, occasioning a re-imagining of the “business of sport” and of sport itself.

The IPL’s success has led to the mushrooming of franchise based leagues in other sporting disciples. The Kerala Volleyball League, the Indian Tennis League and some State Cricket Leagues are among the first steppers onto the sports league bandwagon.  Other initiatives like the Mahindra NBA Challenge (a recreational basketball league) further indicate that the future will see more leagues in Indian sport.

Franchise Based Sports Leagues: The Indian Model

The leading sports leagues of the world operate independent of the sport’s governing bodies in their respective countries. USA Basketball has absolutely no say in the activities of the National Basketball Association (NBA) in North America, much like the Football Association in the United Kingdom has no control over the English Premier League. (The Football Association is also a shareholder of the EPL. They have the right of veto in certain crucial areas, such as the appointment of Chairman and Chief Executive and promotion and relegation, but have no say on other areas of Premier League.)

However, every attempt at establishing a Sports League in India has been organized either directly by, or in conjunction with, the governing body of the sport. The only exception was the Indian Cricket League, which attempted to operate outside the BCCI’s framework with disastrous consequences. Unless things change drastically, sports leagues in India will almost certainly be governed by a peculiar ‘mixed’ operating model, involving sports federations and private investors.

The transparency and efficiency of governmental sports federations in India has been questionable at the best of times. Consistent bungling by the officialdom has meant that controversy has repeatedly ravaged sports like Hockey, Weight-lifting, Shooting, Tennis and even the Indian Olympic Association, to name a few.

In this scenario, the operation of sporting leagues on a franchise based model, involving big investments by private enterprises, brings with it the challenge of maintaining credibility and fair play.

There of course exists the option to keep the government out of the frame altogether and develop these leagues as independent properties, as attempted by the ICL. However, if the federations are allowed to get away with the restrictive and anti-competitive tactics employed by the BCCI to shut the ICL down, private leagues independent of federations, do not appear feasible. Thus, ‘governing presence (of the respective body/federation)’ in the operations of any Indian league seem virtually inevitable. (The Kerala Volleyball League is held under the aegis of the Kerala Sports Volleyball Association (KSVA) while the proposed Indian Tennis League is a property of the All India Tennis Association (AITA)

Unfortunately, the slur of politicking and financial irregularities that ostensibly plague the IPL, has cast a pall of gloom over the enthusiasm for league based sport. Some detractors have deemed such sports leagues as mere fronts for serious offences like money laundering and betting. To be dismissive of league based sport as a whole because of the IPL’s shortcomings is entirely unfounded.

The calls for better Corporate Governance in the IPL in the recent past are, in reality, calls for some serious “Sports Law”.

What is Sports Law and how does it have the answers?

Sports Law is an umbrella term used to describe the legal issues applicable to amateur and professional sports. Drawn from elements of labor law, media law, contract law, competition law and tort law, sports law has emerged as a distinctive discipline of legal practice. Interestingly, sports law originated because of increased public dissatisfaction and media scrutiny of a variety of conflicts in franchise based leagues.

Leagues over the world have worked hard to ensure that their credibility is not compromised by illegal, immoral or unethical activities by their administrators, promoters or stakeholders. In doing so, they have developed a framework of regulation that addresses commercial and operational arrangements and have steadfastly adhered to the same. In several instances the Leagues have had to make changes to their policies, based on adverse court rulings and stakeholder feedback. These processes have kept these Leagues above board and inspired confidence in investors and fans alike, leading to their longevity, profitability and success.

The IPL would have done well to establish a structured sports law framework that regulated the fundamental aspects of the League and reduced the concentration of discretionary or arbitrary powers in the hands of a few. Instead, it has chosen to operate in mysterious ways, never shy of disclosing the dollar values of deals but not publicly sharing the League’s constitution and operational documents, if indeed there is any. The National Football League, Major League Baseball, English Premier League and other major sporting leagues of the world have made their constitutional documents freely available for public knowledge and scrutiny. Even in their pursuit of revenue maximization, their administration is accountable to the stakeholders at all times.

The key learning from the current investigations into the IPL is that franchise based Sports leagues must organize themselves in the most transparent manner and ensure that fair play must not only be done but must also explicitly appear to have been done. There are numerous templates from established sporting leagues of the world and we can borrow the best practices from each and avoid the mistakes they have all made.

Future of Sporting Leagues in India

Left only to the government and its instruments, most sports in India can continue in their present state of inertness. Franchise based leagues can provide these sports with the much needed financial impetus, infrastructure investments, marketing hype, distribution reach and viewership spike thereby creating lucrative eco-systems for each of them.

The ills of the IPL must not undo its merits. The IPL’s success has made corporations and brands realize the exponential returns on investments made in franchise based sport.

Leagues attract financial muscle and with it potential for misappropriation and malpractices. An organized and responsive legal framework that secures rights and ensures compliance, will serve the future leagues of Indian sport well.

Conclusion

Indian sport is changing, much like our economy was when Manmohan-omics opened it up to the world in the early 1990’s. Now, as then, we must work with checks and balances, which in the present context, an indigenously developed Sports Law can well provide. We need to adopt this discipline of law very seriously, as law schools, as law firms, as Corporations, as athletes and as practitioners. The era of “brokers masquerading in sports management” may well be over as we step into a new order where everyone can play it by the book and yet everyone can win!