You are on page 1of 1

- -..;WW.ECONOMICTIMES.

COM

hecricketboardhasviolatedcompetitionlawwhenhanding IPL's out long-term TV,mobileandwebsiterights


MSHARMA

BCCI: aught C Behind

port, and particularly cricket, has become big business in the country. The recent inquiries initiated by the 'd of Control for Cricket in Iridia ICCI)againstLalit Modi have brought sejous financial irregularities, including lid-rigging in the award of contracts durgprevious three Iridian Premier League )L) seasons, to the fore. But the competiton issues involved thereinl have been Iverlooked. The BCCI's conduct of awardg contracts, say, for broadcasting rights, ises serious competition issues. With an Iverarching competition watchdog, Cometition Commission of Iridia (CCI), in acion, the time has come to bring the antiompetitive practices of the cash-rich lodyto public notice. For the record, competition issues in ricket arose for the first time when the ICCI, by abusing its dominance, refused 0 recognise Essel Sports-promoted Irilian Cricket League (ICL) and, instead, lromoted its own 'official' Iridian Preier League (IPL) for Twenty-20 matches. le issue never reached CCI as it was not linforce at that time and the MRTP Com. \ ission couidnotgo beyond investigation. lut that is history. agency tocontrol the organisation of crick~ ty of longer duration, of over three years, The world over, competition in sports is etinthecountry,theBCClisundoubtedlya as granted by the BCCIand that too for a
.

ANIMISI

regulated like that in other sectors of the economy. or instance, Sin).onRottenberg, F a well-knownUS economist, in his paper TheBaseballPlayers' Labor Market states that the "economics of professional sports leagues could be analysed using the same economicframework as for any other industry'. SinceIridia nowhas a modern competition law,competition issues in cricket carmot be allowed to be overlooked any more.Let us first examine them in the context of the BCCI-sponsored'official' IPL. Butbefore Idwellon them, it maybe apt to remove doubts on the vast scope of the Competition Act,2002.Sufficewould be to statethatwhiletheBCClmay ormaynotfit in the definition of a 'public authority' for the purposes of applicability of the RTI Act, which was the Competition Act, whichequally coversmost of the state-controlled enterprises and runs on the basic premise of 'competitive neutrality'. Consequently, we have the CCI examining a complaint of cartelisation med by Reliancelridustries, the largest private enterprise, against the three public sector oil marketing companies. Hence, no enterprise in the country isnowpermitted to indulge in any anti-competitive business practice prohibited by the Competition Act.Of course,the BCCIisno exception.Iri this backdrop,let us nowseehowtheBCCI, perhaps out of ignorance, is continuing with apparently blatant violation of the lawby abusing its monopolist position.

the award of contracts in IPL have been handled by the BCCI till now is likely to give rise to grave competition issues in times to come. Let us have atlavour of some of these issues. ~ Bid rigging: The allegation of rigging of bids by IPL bosses as well as collusion among bidders, like cartels, is the most serious crime in competition law. Under the Competition Act, '~y agreement which directly or indirectly results in bid rigging or collusive bidding shall be presumed to have an appreciable adverse effect on competition." The allegations .that IPL bosses allegedly advised the DhootsandAdanis to keep their bids modestly above $300 million or that IPL administration also allegedly told the promoters of Kochi consortiumnottoputmorethan$300millionon the table are sufficient to provoke a complaint to CCI under Section 3of the Act. ~ Grant of exclusive broadcasting rights: This is the most widely-known concern and'directlyproves the allegation of abuse of dominance by the BCC!. As the sole

monopolist provider of. cricket-viewing services for the peopleof Iridia and, hence, an enterprise in a 'dominant position' under the Competition Act. The BCCI has been 'selling' broadcasting rights to its 'exclusivepartners' for along time. Firstly, how these 'excluSive partners' were selected is shrouded in mystery.The compliance with the Competition Act is now mandatory for selection of anyexclusive'agent' orpartnerforanybusinesspurpose, i.e., it has to be done by competitive bidding process in a fair and transparent manner. Secondly,even if one overlooks this selection process of the BCCI,the concentration of rights in a few agents seriously hanlpers the prospects of fair play and serious competition issues arise. Now let us see what the BCCIhas done. Theboard soldfive-yearcontracts to ESPN STARSports (1995-99) Prasar Bharati and (1999-2004). Thereafter, it soldthe rights on a territorial basis and Nimbus CommunicatioDS'boughtthe rights for Iridia for five years (2006-10), ESPN STARSports for overseas matches. for four years Compliance with the (2005-08) nd Zee Televia sion for matches in neuCom~n Actls' tral venues for five years mandatory (2006-11).The broadcast forselecting rights forIPLweresoldexEnany exclusive clusivelytoWSG-Sony tertainInent combine for 'agent'or partnerfor 10 years reportedly for any business $1.03 billion. Although COMPETITION ISSUES LIKELY WITH IPL purpose grant of exclusive broadWithout going into the past deeds, the way casting and telecasting

wider range of rights can defmitely restrict competition.This is particularly the caseif the broadcaster too is ina dominant position. Thus, if Sonycan be proved to be having a large market share of viewership in telecast of cricket matches in Iridia,besides BCCI,it will also face the charge of abuse of its dominant position from other competingTVchannels such STARSports, ESPNorTEN Sports,etc. ~ Mobile application rights: DCI Mobile Studios, a division of DotComInfoway,in conjunction with Sigma Ventures of Singapore,hasreportedlyjointlyacquiredthe rights to be the exclusive mobile application partner and rights holder for the IPL cricket matches worldwideforthelongpenod of the next eight years (mcludingthe 2017season). Recently,they released the IPLT20mobileapplicationsforthe iPhone, Nokia smartphones and Blackberry devices. Soon, these will be made available across all other major mobileplatforms ineluding the Android, Wmdows Mobile, Palm aridothers. This is alsolikely toraise similar exclusivityissues. ~ Offzcialwebsiterights: The IPL has report:edlynegotiated a contract with a Canadian company, Live Current Media Iric,to run and operate its portals and the minimum guarantee has been negotiated at$5Qmillionoverthelongextendedperiod of the next 10years.The officialwebsite of. the tournament is www.iplt20.com.Thisis also likely to raise similar exclusivity issues as market foreclosure for new entrantsisalmostinlminent. ." .,~, '$' .....
INTERNATIONALEXPERIENCi

Iri the US, broadcasting issues in PoP\) sport are governed by 1:l\eSports Brc casting Rights Act, 1961. Competition sues relating t() professional sport h arisen primarily mpriVate litigation der section 1of the Sherman Act. Although there are some antitrust

'emptions - such as baseball, collec bargaining and pooling of broadcasi exemptions remains subject to the a trust laws, and is.typically analysed der tile 'rule of reason'.
,,!J'}lus,'iU.tl1oughtheputcom~.maY-be d cUlt t6be pi-edicied, one Cfu1safely say'

rights - yet,conductnot coveredby

rights is acommon commercial practice in

the sport industry,it isimportantto consider the impact of such long-term agreements on competition in this market. The BCCI'sgrantofexclusiverightscanleadto anti-competitive consequences such as (i) creation of barriers for new entrants, (ii) driving out existing competitors, and (ill) foreclosure of competition by hindering entry intothe market. Allthese are specific . violations of the CompetitionAct. The grant of exclusivityfor such long duo rations willf6reclosure competition on account of the fact that at the time of renegotiation at the end of the contract, the broadcaster with the exclusive rights will b~ at an advantage in.comparison to the other players due to the massive revenues it would have amassed during that long

matches will be determined by the lev competition in the league. The profes! al sports leagues in the US have str over the years to ensure 'parity' astheI a viewer is willing to pay is directlyre] to theenjoymenthegetsfrom watchin game. Therefore, it is in the interest 0 league organisers and the BCCI to en time. Therefore, it does not allow for a real agreed not to sell the rights to televise the an adequate level of competition thai allocation of rights at the end of exclusivi- UEFAChampionsLeaguefor longer than a sustain demand and determine the : ty.Yet,exclusivecontracts forasinglesport three-year duration. With these decisions, run viability of the league. event or for one season in a given cham- the duration of any exclusivity in sports (Theauthor headscompetition lawpractic pionship would not normally. pose any coptracts has been limited to a period of VaishAssociates.Vzewsarepersonal.Hisa ate Vaibhav Chouksecontributed tothean competition problem. However,exclusivi- threeyearsinEurope.

The law on the subject is almost settled in coUntries having a developed jurisprudence on competition issues in sport. For instance, Iri the EU, EC competition law is now applicable to economic activities generated by sport, particularly after the Mecca-Medinacase(2004). Irianother case,. UEFAcase(2OO1), theEC commission originally objectedto the joint selling arrangements, which were notified in 1999,because the European FootballOrganisation (UEFA)sold all Chanlpions League TV rights in one packageto a singlebroadcasteronanexclusivebasisforuptofouryears at a time. ASa result of the commission's objections,UEFAproposedanewjoint selling arrangement, operational from the 2003-04football season, whereby UEFA

the BCCI and its exclusive br,oadcas may soon have questions to answer be the CCI in case a vigilant viewer or a c peting broadcasting TV channel or a sumer group decides to me a compll The CCI is also not likely to ignore the tIed international law on the subjec proactive CCI may also take up suo r. cognisance of such anti-competitive 1

ness agreements. . The interest in