bcci caught behind in et dated 12.5.2011

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BCCI:CaughtBehindhecricketboardhasviolatedcompetitionlawwhenhandingout IPL'slong-termTV,mobileandwebsiterightsMSHARMA

port, and particularly cricket, has be-come big business in the country. Therecent inquiries initiated by the'd of Control for Cricket in Iridia

ICCI)againstLalit Modi have brought se-jous financial irregularities, includinglid-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 beenIverlooked. 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-richlodyto public notice.For the record, competition issues inricket arose for the first time when theICCI, by abusing its dominance, refused0 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

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regulated like that in other sectors of theeconomy.For instance, Sin).onRottenberg,a well-knownUS economist, in his paperTheBaseballPlayers' LaborMarket statesthat the "economicsof professional sportsleagues couldbe analysed using the sameeconomicframework as for any other ind-ustry'. SinceIridia nowhas a modern com-petition law,competition issues in cricketcarmot be allowed to be overlooked anymore.Let us first examine them in the con-textof the BCCI-sponsored'official' IPL.Butbefore Idwellon them, it maybe apt to

remove doubts on the vast scope of theCompetitionAct,2002.Sufficewouldbe tostatethatwhiletheBCClmay ormaynotfitin the definition of a 'public authority' forthe purposes of applicability of the RTIAct, which was the Competition Act,whichequally coversmost of the state-con-trolled enterprises and runs on the basicpremise of 'competitive neutrality'. Con-sequently, we have the CCI examining acomplaint of cartelisation med by Re-liancelridustries, the largest private enter-prise, against the three public sector oilmarketing companies. Hence, no enter-prise in the country isnowpermitted to in-dulge in any anti-competitive businesspractice prohibited by the CompetitionAct.Ofcourse,the BCCIisno exception.Irithisbackdrop,letus nowseehowtheBCCI,perhaps out of ignorance, is continuingwith apparently blatant violation of thelawbyabusing its monopolist position.

COMPETITION ISSUES LIKELY WITH IPL

Without going into the past deeds, the waythe award of contracts in IPL have beenhandled by the BCCI till now is likely togive rise to grave competition issues intimes to come. Let us have atlavour of someof these issues.~ Bid rigging: The allegation of rigging ofbids by IPL bosses as well as collusionamong bidders, like cartels, is the most se-rious crime in competition law. Under theCompetition Act, '~y agreement whichdirectly or indirectly results in bid riggingor collusive bidding shall be presumed tohave an appreciable adverse effect on com-petition." The allegations .that IPL bossesallegedly advised the DhootsandAdanis tokeep their bids modestly above $300 mil-lion or that IPL administration also alleg-edly told the promoters of Kochi consorti-umnottoputmorethan$300millionon thetable are sufficient to provoke a complaintto CCI under Section 3of the Act.~ Grant of exclusive broadcasting rights:This is the most widely-known concernand'directlyproves the allegation of abuseof dominance by the BCC!. As the sole

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agencytocontrol the organisation of crick~ ty of longer duration, of over three years,etinthecountry,theBCClisundoubtedlya as granted by the BCCIand that too for amonopolist provider of. cricket-viewing wider range of rights can defmitely re-services for the peopleof Iridia and,hence, strict competition.This is particularly thean enterprise in a 'dominant position' un- caseif thebroadcaster toois ina dominantder the Competition Act. The BCCI has position. Thus, if Sonycan beprovedto bebeen 'selling' broadcasting rights to its 'ex- having a large market share of viewershipclusivepartners' foralong 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 othercompliance with the Competition Act is competingTVchannels such STARSports,now mandatory for selectionof anyexclu- ESPNorTEN Sports,etc.sive'agent' orpartnerforanybusinesspur- ~ Mobile application rights: DCI Mobilepose, i.e., it has to be done by competitive Studios, a division of DotComInfoway,inbidding process in a fair and transparent conjunction with Sigma Ventures of Sin-manner. Secondly,even if one overlooks gapore,hasreportedlyjointlyacquiredthethis selectionprocess of the BCCI,the con- rights to be the exclusivemobile applica-centration of rights in a few agents seri- tion partner and rights holder for the IPLously hanlpers the prospects of fair play cricket matches worldwideforthelongpe-and serious competition issuesarise. nod of the next eight years (mcludingtheNow let us see what the BCCIhas done. 2017season). Recently,they released the

Theboard soldfive-yearcontracts to ESPN IPLT20mobileapplicationsforthe iPhone,STARSports (1995-99)and Prasar Bharati Nokia smartphones and Blackberry de-(1999-2004).Thereafter, it soldthe rights on vices. Soon, these will be made availablea territorial basis and Nimbus Communi- across allother major mobileplatforms in-catioDS'boughtthe rights for Iridia for five eluding the Android, Wmdows Mobile,

years (2006-10), ESPN Palm aridothers. This is alsolikely toraiseSTARSports for overseas similar exclusivityissues.matches. for four years ~ Offzcialwebsiterights: 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 Mediatral venues for five years Iric,to run and operate its portals and the(2006-11).The broadcast minimum guarantee has been negotiatedrights forIPLweresoldex- at$5QmillionoverthelongextendedperiodclusivelytoWSG-SonyEn- of the next 10years.The officialwebsite of.tertainInent combine for the tournament is www.iplt20.com.Thisis10 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 INTERNATIONALEXPERIENCithe sport industry, it isimportantto consid- The law on the subject is almost settled iner 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. ForBCCI'sgrantofexclusiverightscanleadto instance, Iri the EU,EC competition lawanti-competitive consequences such as (i) is now applicable to economic activitiescreation of barriers for new entrants, (ii) generated by sport, particularly after thedriving 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 sellingarrange-violations of the CompetitionAct. . ments, which were notified in 1999,be-The grant of exclusivityforsuch long duo cause the European FootballOrganisation

rations willf6reclosure competition onac- (UEFA)sold all Chanlpions League TVcount of the fact that at the time of renego- rights in onepackageto a singlebroadcast-tiation at the end of the contract, the eronanexclusivebasisforuptofouryearsbroadcaster with the exclusive rights will at a time. ASa result of the commission'sb~ at an advantage in.comparison to the objections,UEFAproposedanewjoint sell-other players due to the massive revenues ing arrangement, operational from theit would have amassed during that long 2003-04football season, whereby UEFAtime. Therefore, it does not allow for a real .agreed not to sell the rights to televise theallocation of rights at the end of exclusivi- UEFAChampionsLeaguefor longer than aty.Yet,exclusivecontracts forasinglesport three-year duration. With these decisions,event or for one season in a given cham- the duration of any exclusivity in sportspionship would not normally. pose any coptracts has been limited to a period ofcompetition problem. However,exclusivi- threeyearsinEurope.

-CompliancewiththeCom~nActls'mandatoryforselectinganyexclusive'agent'orpartnerforany businesspurpose

ANIMISI

Iri the US, broadcasting issues in PoP\)sport are governed by 1:l\eSports Brccasting Rights Act, 1961. Competitionsues relating t() professional sport harisen primarily mpriVate litigationder section 1of the Sherman Act.Although there are some antitrust

'emptions - such as baseball, collecbargaining and pooling of broadcasirights - yet,conductnot coveredbyexemptions remains subject to the atrust laws, and is. typically analysedder tile 'rule of reason'.,,!J'}lus,'iU.tl1oughtheputcom~.maY-be d

cUlt t6be pi-edicied, one Cfu1safely say'the BCCI and its exclusive br,oadcasmay soon have questions to answer bethe CCI in case a vigilant viewer or a cpeting broadcasting TV channel or asumer group decides to me a compllThe CCI is also not likely to ignore thetIed international law on the subjecproactive CCI may also take up suo r.cognisance of such anti-competitive 1ness agreements. . The interest inmatches will be determined by the levcompetition in the league. The profes!al sports leagues in the US have strover the years to ensure 'parity' astheIa viewer is willing to pay is directlyre]to theenjoymenthegetsfrom watchingame. Therefore, it is in the interest 0league organisers and the BCCI to enan adequate level of competition thaisustain demand and determine the :run viability of the league.(Theauthor headscompetition lawpracticVaishAssociates.Vzewsarepersonal.Hisaate Vaibhav Chouksecontributed tothean