- -..- ;WW.ECONOMICTIMES.COM BCCI: Caught Behind hecricketboardhasviolatedcompetitionlawwhenhandingoutIPL's long-termTV,mobileandwebsiterights MSHARMA port, and particularly cricket, has be- come big business in the country. The recent inquiries initiated by the 'd of Control for Cricket in Iridia ICCI)againstLalit Modi have brought se- jous financial irregularities, including lid-rigging in the award of contracts dur- gprevious three Iridian Premier League )L) seasons, to the fore. But the competi- ton issues involved thereinl have been Iverlooked. The BCCI's conduct of award- g contracts, say, for broadcasting rights, ises serious competition issues. With an Iverarching competition watchdog, Com- etition Commission of Iridia (CCI), in ac- ion, the time has come to bring the anti- ompetitive 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 Iri- lian Cricket League (ICL) and, instead, lromoted its own 'official' Iridian Pre- ier 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. . The world over, competition in sports is l regulated like that in other sectors of the economy.Forinstance, Sin).onRottenberg, a well-knownUS economist, in his paper TheBaseball Players' Labor Market states that the "economics of professional sports leagues could be analysed using the same economicframework as for any other ind- ustry'. SinceIridia now has a modern com- petition law,competition issues in cricket carmot be allowed to be overlooked any more.Let us first examine them in the con- text of the BCCI-sponsored'official'IPL. Butbefore I dwell on 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-con- trolled enterprises and runs on the basic premise of 'competitive neutrality'. Con- sequently, we have the CCI examining a complaint of cartelisation med by Re- liancelridustries, the largest private enter- prise, against the three public sector oil marketing companies. Hence, no enter- prise in the country is now permitted to in- dulge in any anti-competitive business practice prohibited by the Competition Act.Of course,the BCCIisno exception.Iri this backdrop,let us now seehowtheBCCI, perhaps out of ignorance, is continuing with apparently blatant violation of the lawbyabusing its monopolist position. COMPETITION ISSUES LIKELY WITH IPL Without going into the past deeds, the way 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 se- rious 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 com- petition." The allegations .that IPL bosses allegedly advised the DhootsandAdanis to keep their bids modestly above $300 mil- lion or that IPL administration also alleg- edly told the promoters of Kochi consorti- umnottoputmorethan$300millionon the table are sufficient to provoke a complaint to CCI under Section 3 of 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 . \ agency tocontrol the organisation of crick~ ty of longer duration, of over three years, etinthecountry,theBCClisundoubtedlya as granted by the BCCIand that too for a monopolist provider of. cricket-viewing wider range of rights can defmitely re- services for the people of Iridia and, hence, strict competition. This is particularly the an enterprise in a 'dominant position' un- case if the broadcaster too is ina dominant der the Competition Act. The BCCI has position. Thus, if Sony can be proved to be been 'selling' broadcasting rights to its 'ex- having a large market share of viewership clusivepartners' for along time. in telecast of cricket matches in Iridia, be- Firstly, how these 'excluSive partners' sides BCCI,it will also face the charge of were selected is shrouded in mystery.The abuse of its dominant position from other compliance with the Competition Act is competingTVchannels suchSTARSports, now mandatory for selection of anyexclu- ESPNorTEN Sports,etc. sive'agent' orpartnerforanybusinesspur- ~ Mobile application rights: DCI Mobile pose, i.e., it has to be done by competitive Studios, a division of DotComInfoway,in bidding process in a fair and transparent conjunction with Sigma Ventures of Sin- manner. Secondly,even if one overlooks gapore,hasreportedlyjointlyacquiredthe this selection process of the BCCI,the con- rights to be the exclusive mobile applica- centration of rights in a few agents seri- tion partner and rights holder for the IPL ously hanlpers the prospects of fair play cricket matches worldwideforthelongpe- and serious competition issues arise. nod of the next eight years (mcludingthe Now let us see what the BCCIhas done. 2017season). Recently,they released the The board soldfive-yearcontracts to ESPN IPLT20mobileapplicationsforthe iPhone, STARSports (1995-99) and Prasar Bharati Nokia smartphones and Blackberry de- (1999-2004). Thereafter, it sold the rights on vices. Soon, these will be made available a territorial basis and Nimbus Communi- across all other major mobileplatforms in- catioDS'boughtthe rights for Iridiafor five eluding the Android, Wmdows Mobile, years (2006-10), ESPN Palm aridothers. This is also likely toraise STARSports for overseas similar exclusivity issues. matches. for four years ~ Offzcial websiterights: The IPL has re- (2005-08)and Zee Televi- port:edlynegotiated a contract with a Ca- sion for matches in neu- nadian company, Live Current Media tral venues for five years Iric,to run and operate its portals and the (2006-11).The broadcast minimum guarantee has been negotiated rights forIPLweresoldex- at$5Qmillionoverthelongextendedperiod clusivelytoWSG-SonyEn- of the next 10years. The officialwebsite of. tertainInent combine for the tournament is www.iplt20.com.Thisis 10 years reportedly for also likely to raise similar exclusivity is- $1.03 billion. Although sues as market foreclosure for new en- grant of exclusive broad- trantsisalmostinlminent. ." casting and telecasting .,~, '$' ..... rights is acommon commercial practice in INTERNATIONALEXPERIENCi the sport industry, it isimportantto consid- The law on the subject is almost settled in er the impact of such long-term agree- coUntries having a developed jurispru- ments on competition in this market. The dence on competition issues in sport. For BCCI'sgrantofexclusiverightscanleadto instance, Iri the EU, EC competition law anti-competitive consequences such as (i) is now applicable to economic activities creation of barriers for new entrants, (ii) generated by sport, particularly after the driving out existing competitors, and (ill) Mecca-Medinacase(2004). Irianother case,. foreclosure of competition by hindering UEFAcase(2OO1), theEC commission orig- entry into the market. Allthese are specific inally objectedto the joint selling arrange- violations of the CompetitionAct. . ments, which were notified in 1999,be- The grant of exclusivity for such long duo cause the European FootballOrganisation rations willf6reclosure competition on ac- (UEFA)sold all Chanlpions League TV count of the fact that at the time of renego- rights in one packageto a singlebroadcast- tiation at the end of the contract, the eronanexclusivebasisforuptofouryears broadcaster with the exclusive rights will at a time. ASa result of the commission's b~ at an advantage in.comparison to the objections,UEFAproposedanewjoint sell- other players due to the massive revenues ing arrangement, operational from the it would have amassed during that long 2003-04football season, whereby UEFA time. Therefore, it does not allow for a real . agreed not to sell the rights to televise the allocation of rights at the end of exclusivi- UEFAChampionsLeagueforlonger than a ty.Yet,exclusivecontracts forasinglesport three-year duration. With these decisions, event or for one season in a given cham- the duration of any exclusivity in sports pionship would not normally. pose any coptracts has been limited to a period of competition problem. However,exclusivi- threeyearsinEurope. - Compliance withthe Com~n Actls' mandatory forselecting any exclusive 'agent'or partnerfor any business purpose ANIMISI 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 rights - yet,conductnot coveredby 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' the BCCI and its exclusive br,oadcas may soon have questions to answer be the CCI in case a vigilant viewer or ac 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 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 an adequate level of competition thai sustain demand and determine the : run viability of the league. (Theauthor headscompetition lawpractic VaishAssociates.Vzewsarepersonal.Hisa ate Vaibhav Chouksecontributed tothean