Corporatise Bcci

Earlier this week, a couple of foreign investors came to see me. They were from Australia, looking for a new market to bet on because of the turmoil in the east Asian ones. They wanted to know whether the Indian stock market was a good place to invest in.

I told them that I didnt know much about these things but given that the Sensex was moving down, it could be a good time to buy. Which scrips, they asked, and I dutifully trotted out the names of the usual A-group companies.

After they had gone, I narrated the conversation to a colleague. He does this kind of thing rather more often than I do, so I asked him if I had sounded sensible. He nodded and after some thought said ruefully how much nicer it would be if something new and sure-fire would come along.

 

I have been thinking about his remark since then, wondering what this new and sure-fire thing could be. And the more I think about it, the more it seems to me that that the time has come to look at the sports business more closely.

The reason is this: as India urbanises and television becomes more pervasive, the entertainment needs of the people will be met, in a very large measure, by sports. In other words, the demand side of the industry is well taken care of.

That leaves the supply side. As far as supply is concerned, there is really no dearth. Cricket and tennis are excellent examples of this. Both sports are characterised by a large number of international tournaments.

In cricket, particularly, hundreds of crores of rupees are involved, and had Board of Cricket Control in India (BCCI) been a company, its turnover would have been between Rs 500-600 crore. And its profit margins, should they be calculated in the usual way, would be astronomical.

In other countries, where sports have begun to generate large turnovers and profits, sports companies have come into existence. Why should not this happen in India as well? Why, to start with, cant the BCCI be corporatised?

I see the following advantages accruing if this were to be done.

First, it would make the operations of the Board more transparent and the constant whiff of something odd would not be in the air.

Second, if the public and the local cricket associations were allowed to hold shares in the company, not only would there be more money available, it would also help them share in the profits that cricket is generating. This would make a dent in the betting market.

Third, since the price of the scrip would depend on whether the team wins or not, there would be more pressure to select better teams. The current practice of zonal quotas would end.

Fourth, it has been a long-standing demand of the players that they should be paid according to seniority and performance. The current practice of paying everyone the same amount makes no sense. A cricket company would pay players precisely on that principle.

Lastly, the game could be developed as a business which it has, in fact, become rather than as the amateur interest of some busybodies who use it for private gain.

Theres only one problem. I dont know how the process of corporatising the BCCI should begin. Any suggestions will be welcome.