The recent few years have seen matters of Indian sport and its governance move from the back pages to the front pages of newspapers, shift from sports segments to prime time news on television and become a regular trending topic on social media. Members of the cast have included a colourful rainbow of individuals — politicians of all hues, businessmen, career sports administrators, sports ministers and, most recently, judges and retired judges of the country’s highest courts. However, athletes and the public have rarely figured in this narrative. It is not difficult to see why.
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Traditionally, sports governance regulation has been positioned as a system of reasonably basic, structural and institutional restrictions on the otherwise free reign of ‘autonomous’ sports regulators. The apparently universal principles of ‘good governance’ of sport have largely been designed by sports bodies for sports bodies — limitations they must suffer and endure so as to enjoy their broad powers and privileges. The norms have included matters such as age and tenure restrictions, conflict of interest and ethics codes. Monitoring of compliance with these is either by the body itself or by other inter-related sports bodies such as regional and international federations. In that sense, extant good governance regulation has tended towards being window-dressing.
In some quarters, and certainly in India, it has been vehemently argued that the ‘autonomy’ of sports federations is to be understood as absolute freedom from external regulation, accountability or control. Any legal or other state intervention is swatted away as inappropriate ‘interference’, be it legislative, administrative or judicial in nature.
Many advanced legal jurisdictions have seen this ‘strawman’ argument for what it is — a flimsy decoy — and have made sports governing bodies the subject of clear and independent regulation. The Indian government, too, made tentative forays into governance regulation on this basis with the National Sports Development Code, 2011, and a few aborted attempts to pass the National Sports Development Bill in different avatars. Underpinning these moves at regulation was a rather ambiguously understood concept of “national interest” — that federations ought to be subject to certain norms and standards as they were selecting national teams, using the national name and flag and receiving public funding.
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Both the ‘self-regulation’ and ‘national interest’ approaches have limitations. Independently or together, they do not provide a ‘principles-based’, ‘rights and obligations’ approach to sports regulation, i.e., one that is capable of explaining why sports federations must be the subject matter of state regulation or what form that regulation ought to take. For example, they cannot explain the optimal power balance between federations and athletes, the appropriate stakeholder representation in decision- making, the terms on which private individuals and enterprises can plug in to the system and contribute to its growth, the transparency and disclosure standards that need to be in place, and similar such rule-based standards. For those goals to be achieved, a market-based view provides far more suitable guidance. This requires us to recognise that a sports federation is a supplier of independent governance services to participants, consumers and stakeholders in the markets it controls.
But before we get to more detail on that, it is worth getting some preliminary things out of the way. Sport does need suppliers of governance. There is value in these governors being independent from participants such as athletes and businesses. Governors need not exclusively be athletes or former athletes — a broad variety of skills is required in sports administration. There are also many good reasons why the managerial decision maker ought not to be the government itself. Finally, and perhaps most importantly, there are indeed a limited number of functions and roles with respect to which it is both appropriate and efficient for sports to be administered using a pyramidal monopolistic structure. This involves international-, regional-, national- and state-level governing bodies vested with recognition and exclusive rights of dealing. This monopoly structure furthers administrative coordination, efficiency of investments in sport and international sports comity through events and exchange. Essentially, sports administration tends towards being a natural monopoly in certain aspects.
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That said, monopolies are apt structures in very few settings and, even so, must be monitored regularly, limited appropriately and regulated carefully. It is difficult, if not impossible, to find an example of a self-regulating monopoly that produces optimum results without tending towards obvious self-perpetuation by incumbents, anti-competitive business conduct and similar such behaviour. This really is the crux of why we must have well-principled and consistently-enforced sports governance regulation.
At the heart of the matter are three markets: the market for sports talent (players and progression pathways), the market for sports facilities (stadia and training centres) and the market for sports platforms (events). Practically and factually, these are all claimed as monopolies by sports federations in their respective disciplines and regions. For example, today it is impossible for an athlete to be selected to play for the country without the blessings of state and national associations; stadia built on public land can often be unlocked only with keys held by federations; and any event of any sort in the country that remotely resembles the sport being regulated apparently requires the federation’s approval and sanction (usually at considerable cost) before athletes of stature can participate without facing adverse consequences.
Any behaviour that questions or challenges a monopoly is usually attacked strongly and vehemently by incumbents so as to sustain and strengthen the existing monopoly structures. When political influence and quasi-state power pervade these monopolies — and perhaps this ‘regulatory capture’ is indeed their primary role within federations — the prospect of peeling back monopoly powers through legislative or administrative action becomes even less likely. As recent events in India have shown, it has been left to the judiciary to pick up the mantle, for better or for worse.
In this context, the question must appropriately shift from ‘Should sports federations be regulated?’ to ‘What are the appropriate regulations on sports federations to ensure that they deliver public value in the markets they control?’. It is ultimately the consumer interest that must be at the core of governance. Today, no one argues that the railways, albeit a natural monopoly, must be regulated. Nor for that matter private airlines by the DGCA, telecom providers by TRAI and numerous other consumer-facing services. The private nature of entities does not limit SEBI from protecting the interests of public investors. Sports markets are no different.
The sooner we have the wider realisation that sports markets are public goods, the more self-evident will be the public interest in ensuring fairplay in their governance. The elements of fairplay will include matters such as the appropriate scope of monopolies (for example, whether federation sanction is required to hold an amateur community event), the basic commitments and obligations required of a federation to retain monopoly status (including the manner in which compliance will be monitored and the consequences of non-compliance) and the skills, aptitudes and qualifications required of boards and managers. The mantra must be to promote what has the potential to deliver value to the markets and limit that which doesn’t. Match rights to obligations, responsibilities to privileges. Ultimately the role of sport governance must be to deliver value to the athlete, the potential athlete, the fan and the public. In all of these are embedded the broader concept of national interest.
Ensuring that the sports markets run efficiently, fairly, transparently and responsibly must be at the heart of sports regulation. How our sports bodies are administered is indeed something everyone should care about. It is in this background that efforts at sports governance reform, such as the recent cricket reform and the Sports Governance Code/Bill must be seen.
For an aspiring sports nation like India regulating its sport administration is no longer an option. It is, in fact, a priority.
The writer is a sports lawyer based in Bangalore and also acts as Managing Trustee of GoSports Foundation. He was a member of the Injeti Srinivas Committee tasked by the Ministry of Youth Affairs and Sports with preparing a draft code for good governance in sports.
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