Game theorists coined the term Bushido Endgame to describe a situation where a nation losing a war uses its weapons of mass destruction (WMDs) and exits in a blaze of glory. Lalit Modi seems to have embraced the concept. Given the number of secrets he is privy to, humongous damage could result before he goes down.
Cricket is unipolar. India generates about four-fifths of global revenues and, therefore, calls the shots. The Indian Premier League (IPL) generates most of Indian cricket’s revenues and one-man controls IPL. On Monday, that man is likely to be removed, and he is evidently not prepared to go gentle into the night.
The surprising thing is how fast this situation developed and how utterly unnecessary it was. Just over a month ago, two new franchises had been inducted with bids that far exceeded the most inflated expectations. Everything seemed hunky-dory.
Then Lalit Modi started tweeting and Shashi Tharoor, counter-tweeting. They opened many cans of worms. Modi’s decision to ventilate the ownership structure of the Kochi franchise seems to have been motivated mainly by pique. It set off a chain reaction. Questions were naturally raised about other ownership structures and about IPL’s revenue management model.
Glasshouses, stones. In order to embarrass Tharoor, Modi put his entire empire in jeopardy. Yes, Modi may have had a sweetheart deal with one (or more) of the disappointed bidders, as has been alleged by a member of the Kochi consortium. It still doesn’t make sense.
Now that the IT department is in the act, it’s anyone’s guess whether IPL will go into season IV at all. The Board of Control for Cricket in India (BCCI) is trying to undertake a damage-limitation exercise and may be able to distance itself. But until the IT department does unwind the IPL tangles, if it can do so at all, the league’s future will be uncertain.
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The damage to the game could go beyond that caused by the collapse of Allen Sanford’s Ponzi schemes. An entire generation of cricketers and cricketing support staff may see their paycheques disappear into the ether along with Modi’s tweets. Hell, cricket as we know it, could disappear into the ether if the IPL bubble implodes with sufficient force. Would the game survive if more than half its revenues disappeared?
It has never been a secret that IPL’s revenue streams and franchise-ownership patterns are murky. The key to understanding that lies in the convoluted mind of the man who put it together. The central broadcasting and sponsorship deals went through him; he conceptualised the bid-award system for franchises and he dreamt up the player auctions. Things had to be convoluted to obscure any incentives for himself that Modi wove into the financial structure.
Analysts have broken their heads trying to understand how IPL works. Only two franchisees are said to have made money in Season-I. According to some analysts, season III would have been very profitable for most franchises. According to other analysts, most franchises will lose pots of money in Season-III and continue to lose large sums for years to come.
Cynically, IPL works. Somehow it generates positive cash-flows or at least, the promise of positive cash-flows. The existing franchises are owned and run by people noted for their business acumen. They would not have continued to support their teams with the open-handed enthusiasm they display, if it was a losing proposition. What is more, nobody would have been willing to bid outrageous amounts for the two new slots.
Between them, BCCI and the franchises have enough political clout to survive this crisis. IPL is too big to fail. It would be too much to expect a complete clean-up. But it is very much in BCCI’s interest to ensure that power is never centralised in this fashion again.