The way forward for sports federations

For an aspiring sports nation like India, regulating its sport administration is no longer an option. It is, in fact, a priority.

Abhinav Bindra carries the Indian National Flag during the Opening Ceremony of the 2016 Olympics in Rio de Janeiro. The Indian government made 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.   -  AP

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.

Read: 'The Code should conform to the Olympic Charter’

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.

SPORTS CODE: IN A NUTSHELL

What is a Sports Code?

A Sports Code is a set of rules that establishes standards and protocols for national sports federations, that is, the bodies governing various sports in the country. These rules can be issued as administrative directions, in which case they are called a Code; or may be in the form of legislation passed by the Parliament, in which case it would be known as a Sports Act.

When did it first come into existence?

We have had a National Sports Development Code in India since 2011. The existing Code is more an aggregation of various notifications and letters on a variety of sports governance subjects and administrative matters than a single, organised code.

Why do we need it?

The Sports Code establishes criteria, obligations and standards of conduct for sports federations that they must comply with in order to retain their recognition and status, field Indian teams and receive public funding. These are seen as essential norms for bodies carrying out a public function.

When is the new Code expected?

A new Sports Code/Bill has been on the anvil for many years now. The subject has returned to the forefront since the constitution of the Injeti Srinivas Committee in January 2017. It is understood that the Committee has submitted its report and it is expected that the draft of the Sports Code will be made available for public comment in the coming weeks.

What are the likely major amendments in the new Code?

The Committee was tasked with updating the Code to reflect recent court decisions and national and international developments on sports governance. It is, therefore, likely that the Sports Code will be a comprehensive document covering a wide variety of subjects that will focus on accountability, corporate governance, transparency and professionalisation of sports federations.

How will it change the sports landscape in the country?

Increased professionalism in and accountability of sports federations have the capacity to improve the sports climate and lay greater emphasis on talent spotting, coaching, development of talent pathways and conduct of events. The creation of institutions that will monitor compliance, oversee elections and resolve disputes would also be valuable in sustaining this climate.

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.

Read: Saluting the Code

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.

Sports Code: What has been proposed

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.

COMMON QUESTIONS ANSWERED

1. Does the BCCI (Board of Control for Cricket in India) come under the National Sports Development Code (2011)?

The BCCI claims that it is not covered under the National Sports Development Code, 2011, on the basis that it does not accept any public funding. Yet, it is permitted to field the national team and its affiliates build stadia on public/subsidised land, among other state concessions received.

2. Should motorsport, which is growing rapidly in the country, be still categorised under ‘adventure sport’, thereby depriving it of any government support?

There is no universal definition of ‘sport’. It is always evolving, and there is an increasing merger of entertainment and sport, with activities such as eSports being widely popular in numerous jurisdictions and the Olympic Movement introducing a number of new disciplines that are oriented towards youth participation. Any attempt to categorise what is and isn’t ‘sport’ is likely to be futile. That said, each country has to pick its priorities especially when it comes to use of public funds.

3. Why diligence is needed for appointment of coaches?

All talent requires coaching to improve, progress and excel. Today, most of our sports federations are highly dependent on foreign coaches, and many of the appointments are ad hoc and not planned ahead, which means we usually select from a pool of professionals who are not already employed elsewhere. There is also little effort on up-skilling indigenous coaches and creating career pathways for Indian coaches within the existing systems.

Why don’t we have uniformity in voting pattern and choice of officials across National Sports Federations?

There is wide variation in the electoral colleges, voting schemes (such as proxies) and procedures among the various federations, and these are often used strategically by entrenched interests to retain and concentrate power. As opposed to international practice, there are few institutional avenues for athlete-representation and a separation of governance from professional management.

What are the 10 essential reforms needed to improve governance in Indian sports?

i) Include ‘sport’ in the Concurrent List

ii) Constitute an independent regulator for sport

iii) Create a sports election commission

iv) Constitute a sports tribunal to resolve sports related disputes

v) Institute uniform guidelines to tackle age-fraud in sport

vi) Pass anti-doping legislation with mandated protocols

vii) Criminalise match manipulation

viii) Institutionalise athlete and gender representation across federations

ix) Rationalise the sanctioning power of sports federations for professional leagues

x) Incentivise sports funding and participation through the tax structure and CSR.

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.