The final verdict then, if it comes, has to damn the appropriate person without eroding brand IPL, disburse retribution without ruffling the feathers of the bigwigs who are to step into offices of power, and re-equate power lines without fraying the relationship between parties that need to work together to keep the government from coming down hard on the issue, writes Raakesh Natraj.
Comparing Lalit Modi to Sir Allen Stanford, the sponsor of the Stanford Millions and currently under investigation for tax-fraud, might have the benefit of being current, but lacks the credibility of a more direct similitude. The erstwhile boss of the IPL did to T20 cricket, perhaps what Don King did to boxing — make a sport a spectacle. The dangers inherent in such a venture, in putting together things that were thought immiscible before, make the falling apart as spectacular as the coming together.
Sensational in the way it was assembled, the unspooling makes for a fare that is arresting in the most sordid of ways. The lack of transparency and the unwillingness to clarify by the bodies concerned has given enough material for enterprising newsmakers to play with. A weekly news magazine attributes the following to ‘highly reliable sources in the cricketing management fraternity.' “The 4.9 percent free sweat equity (in the Kochi franchisee) Sunanda Pushkar is being pilloried for does not even belong to her. A mere 0.5 percent is reserved for Pushkar. Disturbingly, the rest belongs — off paper and on trust — to two iconic cricketing giants, one of whom is still playing for the Mumbai IPL team.”
The figures bandied about lose their cloak of triviality once the percentages are supplanted by actual figures. The 4.9 percent translates to a cool Rs. 70 crores, based of course on the earning potential of the franchisee in the long run. That, is what valuation is about.
That again, is precisely why the representation needs to be accurate. A major discrepancy is that team valuations are not necessarily a direct corollary of their on field performance. Kolkata Knight Riders, the only team to not have made the semifinals across three editions, was the most profitable at the end of the first season and is currently valued only behind Chennai Super Kings (Rs. 208.90 crore, compared to Chennai Super Kings' Rs. 224.10 crore).
In the absence of a two-tier structure where the bottom teams get relegated to a lower league which would not generate as much viewer interest, ad revenue or media coverage, the franchisees don't stand to lose much during the course of a poor season. The players though may not be in a position to demand the same level of wages as they did pre-slump, but that is something a good domestic season or even a stray bright run won't undo. To implement such a structure, which would force teams to do well to retain their valuation instead of getting hard-sold by celebrities, however, will make the schedule of the IPL too cumbersome. The length and logistics of it would then, surely take something off the ‘crickentertainment' that Lalit Modi promised the IPL would be.
With the valuation model skewed thus in the absence of checks and balances, it comes as no surprise then that the IPL can double its worth from an estimated $ 2 billion last year to in excess of $ 4 billion at present. The two new teams were bought at a cost that exceeded that of all the eight teams put together in the initial auction. Ironically enough, though it was the latest round of bidding for the teams that started the current furore, the IPL in a way can be thankful that the storm started only after the new teams were finalised. The adverse publicity and the public witch-hunt could well have soured a few bids, bringing down estimates quite steeply.
The ownership patterns, profit and loss statements and balance sheets have, as of now, not revealed any discrepancies, government authorities have revealed. ‘Round-tripping' investments from locations abroad, which authorities claim have flouted FEMA regulations, do little to affirm the honour of the financial records. The new IPL supremo Chirayu Amin has promised that the brand image of the League will not take a beating, something that is going to be imperative in the near future.
Piyush Pandey, chairman of Ogilvy and Mather (South Asia), had commented, “The degree of setback the event receives would be determined by the outcome of the probe. The new management has the challenging task to carry forward the brand with the same zeal Modi and team has depicted.” If to keep a clean image is as crucial as it is for the sustainability of the IPL, it is only so because of the pull that such an image has over investors.
The more one tugs at the thread, the more unseemly the mess seems to get. The final verdict then, if it comes, has to damn the appropriate person without eroding brand IPL, disburse retribution without ruffling the feathers of the bigwigs who are to step into offices of power, and re-equate power lines without fraying the relationship between parties that need to work together to keep the government from coming down hard on the issue.
Any suggestions that the dignity of the game has been at stake, can be safely dispensed with. Not quite cricket anymore, and with the IPL one suspected it never was.
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