Catch the IPL scandal in a nutshell

Catch the IPL scandal in a nutshell

• How big is the IPL business? Difficult to estimate. Optimists reckon the revenue earnings of the BCCI and the 8 teams would be a little over Rs 2,000 crore this season. With TV advertising revenues, it would swell to around Rs 2,700 crore. The revenues of the BCCI and the 8 teams would put IPL on a par with Glaxosmithkline Pharmaceuticals (Rs 2,057 crore last year) and above Vijay Mallya’s United Breweries (Rs 1,983 crore)

• What is the BCCI’s share in this (is this equal to a small, medium or large business’s revenues)? The BCCI stands to earn around Rs 1,170 crore. It must fork out about Rs 620 crore to the 8 teams as their share from the central pool of revenues. It will pay out another Rs 33 crore as prize money and umpire salaries. This will leave it with a non-taxable income of around Rs 517 crore. In terms of profits from the IPL, the BCCI would rank on a par with Glaxosmithkline (Rs 500.46 crore last year) and much higher than Videocon Industries (Rs 415 crore)

• What is the franchises’ share? The teams will get to split about Rs 950 crore — which is roughly Rs 120 crore for each franchise on an average. Teams like the Chennai Super Kings, the Mumbai Indians and the Kolkata Knight Riders should be able to get sizeable revenues from sponsorships, ticket sales and merchandise

• How much did the promoter stump up? KKR co-owner Shah Rukh Khan, for example, paid Rs 14 crore, a fraction of what it cost to make My Name is Khan. Mukesh Ambani, Vijay Mallya, India Cements, Deccan Chronicle Holdings and GMR — which hold the entire stake in their teams — will have to fork out more. But the other teams have several co-owners and the amount each will have to put up will be much lower. The ownership pattern in some teams isn’t clear because of suspicion that there may be a layered shareholding structure leading to indirect stakes in the team. This will further reduce the burden on the people generally regarded as the owners

• Is it right for BCCI members/office-bearers to own IPL franchises, directly or indirectly? There is a possibility for a conflict of interests. N. Srinivasan, the BCCI secretary, is MD of India Cements, which won the Chennai franchise. BCCI regulations do not permit any administrator to have, directly or indirectly, any commercial interest in matches or events conducted by the board. But the BCCI, in September 2008, amended the regulations through clause 6.2.4 that took the IPL and other T20 tournaments out of the ambit of this regulation. The amendment has been challenged in court

• There is talk about companies that own the franchises having been registered in tax havens like Mauritius? Is that illegal? No. But there are doubts over transparency. If the structure had been clearly declared, there would have been no problem. There is some suspicion that the identities of the real owners of some teams are concealed in this maze of trans-border companies

• What do tax havens offer? They help people minimise their tax burden. Certain tax treaties between India and other countries, known as double-taxation avoidance agreements, allow entrepreneurs to set up companies in India and repatriate profits without having to pay high taxes here. Companies owned by an Indian pay a corporate tax of 34.5% here; those owned by foreigners pay as much as 40%. Tax havens like the Cayman Islands and Bahamas have no income tax, corporation tax, inheritance tax, capital gains or gift tax

• There is also talk of money coming in from banks in Mauritius and other foreign countries. Is that illegal? No. Mauritius has emerged as the biggest springboard for investments into India. Between 2000 and 2009, 44% of all foreign investment into India was routed via Mauritius. Singapore ranks second with 9%. The reason is the double-taxation treaty India has with Mauritius. Mauritius has negotiated similar agreements with other countries, including tax havens, which allow foreign investors to take their money out of the country without paying more than 3% as tax. As long as they can prove they are tax-paying entities there, the entities or persons do not have to pay tax in India. It is a legitimate tax-reducing device but has been much abused. Lately, some foreign investment proposals have been rejected because of “treaty shopping”

• Some of the investments routed through the tax havens are paltry, as low as Rs 9 crore in some cases. Why use havens if tax savings are inconsequential? The suspicion is not about the money coming in but about the money going out. Also, the needle points to the documentation of some of these companies registered in the tax havens

• What then is the problem with the IPL? The apparent lack of transparency in its dealings. Some IPL governing council members have alleged that Lalit Modi did not take the council into confidence and entered into agreements unilaterally

• Why is Lalit Modi being put in the dock? Suspicion, unconfirmed so far, that he owns stakes in some of the franchises through friends and relatives. Modi’s brother-in-law Suresh Chellaram, for example, holds majority stake in the company that owns the Rajasthan Royals. Modi’s stepson-in-law Gaurav Burman owns a stake in Kings XI Punjab. Companies owned by Modi’s friends and relatives have come to own IPL online rights through a web of deals

• What was Modi’s role in the team auction? Why the cloud on the bidding? Again, there is suspicion — unconfirmed — that the process was not designed to extract the best price. It was a process to create a closed club of preferred people. Modi, the suspicions are, was looking to pick and choose (as far as he could) the people who would own the clubs. That is why the bids were low for Jaipur, Calcutta and Punjab

• What are MSM and WSG? Why is the broadcast deal under a cloud? Multi Screen Media (MSM), formerly Sony Entertainment Television, holds the telecast rights for the IPL which it bagged for $1.02 billion for 10 years in 2008. The deal was later scrapped by the BCCI, which renegotiated with MSM for a nine-year deal for $1.63 billion. Tax sleuths are focusing on a “facilitation fee” of $80 million (about Rs 356 crore) which MSM paid the Mauritius arm of World Sports Group, the marketing agency of the IPL. MSM says the fee was paid to WSG to give up its broadcast rights for the Indian subcontinent, thus paving the way for the BCCI and MSM to enter into a direct deal. The suspicion is that the money was routed back to India to be paid as kickbacks to top people associated with the IPL

• What might the govt investigation be looking for? Financial irregularities, routing of slush funds through tax havens

• What has the BCCI accused Modi of? The allegations relate to the Rajasthan Royals and Kings XI Punjab bids at the 2008 team auction; the broadcasting deal with MSM; the team auction this year; the allotment of Internet rights of the IPL; and the behaviour of Modi

What the franchises won’t chronicle: From Season I, a Profitable League

What the franchises won’t chronicle:

From Season I, a Profitable League

Mumbai, April 25: The Indian Premier League has been a money-spinning proposition from the very first season.

Team owners have often groaned about their big-spending budgets that gave them very little chance of making profits in the first two seasons.

As the third season draws to a close, most team owners grudgingly concede that they might break even this year. That basically means they will neither suffer a loss nor make a profit.

But just as they have been reluctant to reveal the ownership structures of their teams, they could be masking the truth about the profitability of the country’s biggest sporting league.

Here’s why. Deccan Chargers — the team that finished at the bottom of the pile in IPL 1 — reported a profit of Rs 1.62 crore after the very first season — and that’s after paying the government Rs 90.33 lakh as tax.

The numbers are tucked away in the fineprint of the Deccan Chronicle Holdings’ annual report for 2008-09, which captured the earnings of the first season of the IPL.

Deccan Chronicle Holdings is the only one that has placed some critical numbers in the public domain.

It was also the first team owner — the franchisee owner Deccan Chargers Sporting Ventures is a 100 per cent subsidiary of the Secunderabad-based media group — that voluntarily disclosed the ownership structure of the franchise when the showdown between former junior foreign minister Shashi Tharoor and IPL commissioner Lalit Modi snowballed into a controversy.

Deccan Chronicle Holdings’ books shows that it raked in Rs 56.6 crore as revenues from the IPL and earned a pre-tax profit of Rs 2.53 crore in the year ended March 31 last year.

In the past few weeks, there has been intense speculation about how much the owners actually invested in their teams. Deccan Chronicle Holdings — a 100 per cent owner of the sporting venture that holds the rights to the team — put up Rs 50 crore as equity capital. In contrast, Shah Rukh Khan, who is a co-owner of the Kolkata Knight Riders, is supposed to have stumped up Rs 14 crore, indicating the virtues of operating through a consortium.

Under the bidding rules, the franchise rights were given to the teams for a period of 10 years. These are presumably re-negotiable at the end of the period in 2017 but there are no explicit details about the process.

However, the Deccan Chronicle annual report has a very curious accounting treatment that gives rise to speculation about tacit agreements with BCCI that nobody else seems to be aware of.

Deccan Chronicle’s annual report says: “The franchise rights will continue in perpetuity. However, the useful life has been determined as 25 years based on the expected term that the franchise will continue to contribute to the net cash flows of the company. Accordingly, franchise rights are being amortised over the estimated useful life of 25 years,” it says. The company has estimated its franchise rights at Rs 428.04 crore — a sum that has been added to its fixed assets.

The franchisee rights represent the sum that the Deccan Chargers is supposed to pay BCCI. Both Deccan Chronicle and India Cements are treating this amount as an asset on the books since the payment will be made in instalments over 10 years.

Deccan Chronicle is going a step further: on its books, it is stringing the payment out over 25 years! This means that at least for book-keeping purposes, it is taking into account an effective payout of Rs 17 crore a year — which is a piffling sum. The analysts had estimated this payout at Rs 41.9 crore in the case of Deccan Chargers over a period of 10 years.

Deccan Chargers Sporting Ventures’ total assets are estimated at Rs 442.12 crore and total liabilities at Rs 390.49 crore at the end of the first season.

There’s one more detail: the Hyderabad team has the smallest number of sponsors at 10 in the third season — on a par with Kings XI Punjab. Both KKR and the Mumbai Indians have as many as 18.

Coy about figures

The Deccan Chargers’ numbers raise an uncomfortable question: at a time when several team owners remain reluctant to reveal the details about the ownership structure are they also prevaricating on the profits they made from the very first season?

The implicit suggestion here is that if the bottom-of-the-table Deccan Chargers team made a small profit at the end of Season I, wouldn’t the other teams make money as well?

Experts admit that this might not always be true because each team has a different revenue model. Until these details are available, it may be hard to tell.

The numbers for the other teams are difficult to come by because many are either owned by a consortium of individual owners (who have no obligation to give out these details) or by companies that do not choose to report the figures.

Surprisingly, owners like Mukesh Ambani, Vijay Mallya and India Cements boss N. Srinivasan — who has been dubbed the “most conflicted person” by detractors from the Modi camp — have been very coy about the figures.

However, India Cements has given very sketchy details in its annual report for 2008-09 and a little more in a document presented to potential institutional investors who were given the opportunity last month to pick up 24.6 million shares in the company through a preferential placement. But in neither document does India Cements reveal details about turnover and profits.

Essentially, India Cements says its other income rose by Rs 71.45 crore, largely because of IPL revenues in 2008-09, that is the first season.

Not all of this is attributable to the sporting franchise because some part — it doesn’t say how much — comes from interest it earned from certain deposits. But it could be higher than the Rs 56.6 crore that the Deccan Chargers earned, considering that the Chennai Super Kings went all the way to the finals that year.

India Cements throws up some details about the IPL2 numbers as well. In the preferential share issue document, the company says expenditure on the team rose by Rs 21.14 crore during the six months ended September 30, 2009. This period would cover expenses relating to IPL Season 2.

It says advertising expenditure also rose by 63 per cent to Rs 11.74 crore, most of it relating to its team franchise during the same period.

While it gave out some expenditure details, it didn’t talk about IPL earnings in the second season.

Other teams have been less forthcoming than Deccan Chargers and the Chennai Super Kings.

In its annual report for 2008-09, Reliance Industries acknowledges it owns the franchise. But it doesn’t divulge either numbers or any other details. It has put out a bland statement: “The Indian Premier League (IPL) offered yet another opportunity to support and sponsor cricket. RIL bagged the IPL franchise for the city of Mumbai. Mumbai Indians (MI), the Mumbai team, is among the most followed cricket teams in the IPL. This is yet another step to help make India a world-beater in sports.”

Vijay Mallya’s UB group supposedly owns the Royal Challengers Bangalore franchise but curiously there is no mention of this on the UB group website. The team has its own website that is run by Royal Challengers Sports Pvt Ltd, an unlisted company whose details are not known.

Dabur India, which has Mohit Burman as one of its directors, doesn’t say anything about IPL. Mohit Burman is believed to hold 25 per cent in the Punjab franchise. However, the annual report lists KPH Dream Cricket Ltd — the owner of Kings XI Punjab — as part of a group with respect to inter se transfer of shares under Sebi’s takeover regulations.

Mohit and cousin Gaurav Burman are also listed as part of group of 90 persons and entities for inter se share transfers — that is a closed group of entities and persons that would not attract strict provisions of Sebi regulation as long as the share sales are confined among themselves.

This really creates an enabling environment for a transfer of stake from Mohit to Dabur India, if and when that becomes necessary. By doing so, Dabur India will not have to contend with some of the rigorous provisions of the takeover regulations.

Under takeover rules, a person or entity must come out with an open offer if they acquire a stake above 15 per cent in a publicly-listed company. KPH Dream Cricket is an unlisted entity. But should it list, the rule would have kicked in if it had not been listed as part of this group.

The only restriction is that the shares should have been held for at least three years. Since the team-owning entities were formed in 2008, the lock-in restriction that bars stake transfers will end sometime next year.

The GMR Group — which owns the franchise rights to the Delhi Daredevils — has set up a company called GMR Sports Private Ltd which operates under the parent company GMR Holdings Private Ltd. The financials of neither company is available since they are unlisted entities.

How to feed your billionaires

How to feed your billionaires

P. SAINATH

Freebies for the IPL — at a time of savage food subsidy cuts for the poor — benefit four men who make the Forbes Billionaire List of 2010 and a few other, mere multi-millionaires.

And so the IPL fracas is now heading for its own Champions League. Union Cabinet Ministers, Union Ministers of State, Chief Ministers (and who knows a Governor or two might pop up yet) are being named as people trying to influence the bidding process. Both houses of Parliament are in uproar. The taxmen have launched a “survey.” Many in the media and politics are happy to reduce it all to issues of propriety or personality. For, the BCCI-IPL is one platform where the Congress and the BJP cohabit, normally with ease. Big money is, after all, a secular, bi-partisan space. (Or tri-partisan: let's not deny the central contribution of the NCP to this phenomenon.) It's also interesting that the media, though now compelled to give the IPL's underbelly some coverage, are still reluctant to ask larger, harder questions. To go beyond their Modi-Tharoor feeding frenzy. And to avoid induced amnesia.

It was just 10 years ago that cricket was rocked by the game's biggest-ever match-fixing scandal. That too had its centre of gravity in Indian cities, and involved Indian bookies and Indian businessmen. But along comes a new hyper-commercialised version of the game. It has scandal-waiting-to-happen written all over it and the media say “wow! This looks great,” promptly going into the “willing suspension of disbelief” mode. This venture had the right names, high glamour and, above all, big advertising and corporate power. There were obvious conflicts of interest (apart from what it did to cricket, the game) from day one. Here was Big Business in open embrace with its political patrons. There were also those who did not give the public office they held a fraction of the time or importance they gave to the BCCI-IPL. But few serious questions came up in the media.

Now there's a forced discussion of opaque dealings, bribes, and “we-know-how-to-deal-with-you” threats. Of shady investors, murky dealings and, possibly, large-scale tax evasion. Of franchisees alleging they were offered a $50 million bribe to exit. Or claiming that a Union Minister warned them to withdraw from the rodeo with grave threats. It all leads to things much bigger than Modi versus Tharoor or issues of “impropriety” (a nice, genteel word). Leave aside the narrow money details or the fact that some franchisees are thought to be losing tens of crores each year. Skip the fact that despite those losses, newer franchisees between them put up over Rs.3,000 crore for two teams that don't exist. Only a tiny band of journalists have at all shown the scepticism demanded of their profession. These few have stuck at it gamely only to find themselves isolated, mocked as party-poopers and the recipients of threats and abusive mail.

How about questions on public subsidies going to some of the richest people in the world? The BCCI-IPL cost the public crores of rupees each year in several ways. The waiving of entertainment tax worth Rs 10 crore -12 crore for the IPL in Maharashtra alone was discussed in the State's Assembly. It was little reported and less discussed in the media. Maharashtra has extended other support to the IPL, which is yet to be quantified. This, despite being a State whose debt will cross Rs. 200,000 crore in the coming year. And there are similar subsidies and write-offs extended to the BCCI-IPL in other States, other venues.

A whole raft of concealed freebies from public resources to the BCCI-IPL is also not discussed. We have no picture of their full scope. No questions either on why a public sector company should be billing itself as the “sponsor” of a team owned by the fourth richest man in the planet. No questions asked about issues ranging from super-cheap land leases and stadia rentals and low-cost stadia security. We don't even know what the total bill to the public is: just that it is probably in tens of crores. We do know that these supports to the IPL from public money come at a time when subsidies to the poor are being savaged. But we don't want to go down that road. An inquiry into the IPL must cover the BCCI as well and must record all the open and hidden write-offs and subsidies that both get.

Who stand to gain from the public wet-nursing of the IPL? Among others, four gentlemen who make the Forbes Billionaires List of 2010. Three of them are team owners and one is a title sponsor. All dollar billionaires and long-time residents on the Forbes List. Then there are the mere millionaires in the shape of Bollywood stars. For all these and other worthy people, governments bend over backwards to make concessions. Even as they slash food subsidies in a period of rising hunger. Big time partying is an integral part of the IPL show. Only look who is paying for that. Street argot has already begun to brand the IPL as Indian Paisa League or, more directly, India Paisa Loot.

But the BCCI and the IPL preside over huge sums in advertising. So even when the IPL angers the media by pushing them around on coverage restrictions, the media cave in. The larger silence continues. The strongest criticism of what has been going on (till the Kochi chaos) has come from Sports Minister M.S. Gill, an old-fashioned cricket lover actually worried about the game. Not from the media that cover the IPL. He has criticised the tax concessions and security subsidies that have hurt public security in the cities concerned while the IPL is on. It's also worth pointing out that Mr. Gill is the one Minister (of the four Ministers on your TV screens in the present drama) actually connected with sports in a legitimate way — and not tainted by scandal. But maybe that's natural: the IPL has little to do with sports.

The Sports Minister pointed out a long time ago that there were dangerous conflicts of interests at the top levels of the BCCI-IPL. He also told Karan Thapar on television that he found the idea of “letting off tax” (waivers for IPL) quite unacceptable. “This is a poor country. I never forget that. There is a huge deficit in the budget even this year ...” And went on to say that: “when business is earning it in the shape of these teams and whatever the structure, I think the legitimate tax should be taken and should be used for the country maybe even for sports, other sports.” Far from that happening, we are taking it from the public and handing it out to the billionaires.

Fire brigades in the cities have been muted or overruled in their objections to the IPL's ‘hospitality boxes' (where seats can cost you Rs. 40,000) as fire hazards. But some of these tickets also get you to a late night party with IPL stars and other dubious benefits. Some have raised the question of what this does to the players' performance the next day. But the party goes on. Nothing could be further removed from the lives of the ‘cricket crazy public' — whose supposed interests are invoked for every new spin to the game. IPL does not come cheap.

Mumbai's elite recently preened themselves on Earth Hour where the city saved some power by switching off lights for 60 minutes. Great savings could be made if all IPL games were played in daylight. There is something ugly about that much electricity consumed by a private profit entity (guzzling public money) in a season when Marathwada and Vidarbha suffer 12-15 hour power cuts. Something that always devastates the performance of their poorer children in the examinations. They could end up having (on paper at least) a Right to Education, but none to electricity.

With the IPL comes the convergence of the most important media trends: the ABC of Media — Advertising, Bollywood and Corporate Power. Corporate barons and Bollywood stars own cricket teams. One IPL team is owned by a newspaper. Other dailies have become ‘media partners' of IPL teams. Some Bollywood stars have ‘promotional agreements' for their films with TV channels who disguise their paid-for gushing over those films as “news.” Once national heroes, cricket's top icons are now ‘capital assets' of the franchise owners. Once proud of their disavowal of tobacco and liquor advertising, the icons now plug for the latter in surrogate form. And are linked to the former in other ways. And a once great game moves from heartfelt public ownership to a pocket-driven private one; from a national passion to a hyper-commercial nightmare.

Need not be a game for big moneybags

Need not be a game for big moneybags

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How to own an IPL team

How to own an IPL team

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The good, the bad and the ugly of IPL

PRABHUDEV KONANA

There are several things wrong and ugly about India's greatest show, including the unintended consequences of the government getting embroiled in private economic activity. But let's not forget that the Indian Premier League can become a giant platform for energising the masses for the greater good.

Once again a promising initiative is embroiled in controversy, money laundering, nepotism, corruption, and subsidy for the rich and famous. This time it is the Indian Premier League (IPL). History repeats itself where public trust is misused and a great opportunity to make a positive impact on society is lost. Irrespective of how one feels about the IPL, the fact is that it provides three hours of excitement and entertainment to millions of cricket enthusiast worldwide. There is a demand for such a form of cricket and the IPL capitalised on this passion. For a change, divisive issues like language, religion, or nationality have little influence on how cricket fans enjoy the game.

Rather than viewing the IPL purely as a vulgar display of wealth and fashion, let's look briefly at the good side of it that was in display in South Africa last year. During the tough economic conditions, South Africa benefitted remarkably from the IPL as an economic stimulus event. There was significant economic activity from thousands of tourists converging in that country. Hotels, restaurants, gift stores, and other small businesses benefitted from increased spending from visitors and the IPL. It softened the economic upheaval in South Africa that plagued the world.

The best of the IPL in South Africa was not the wins, the spectacular sixers or the Bollywood stars, but the frequent recognition of hundreds of children, teachers, and schools in every game. Much-needed scholarships and gifts were given out in each game to children and schools. Eight-year old S'bonda Zuma, who lost his mother and had huge concerns over whether he could complete his schooling, was helped by the IPL. Four schools from each host city were selected for a scholarship fund to improve educational opportunities. Many local papers in South Africa cited the benefits of the IPL to numerous communities by raising awareness and community interactions.

If the IPL can be used to benefit local communities and educational opportunities, why not encourage it? While I could not find a formal study of the economic impact of the IPL on various cities in India, it is possible there are significant impacts on job creation in host cities. I am sure local businesses, including for example the garment industry (which supplies the apparel related to each franchise), are thrilled at the economic activity. It is the greatest show on Indian soil with millions of educated, well-off people watching who may be motivated and enticed positively to take ownership of improving their communities and schools. Bollywood stars and cricketers could be part of this movement to enable change. Is there a better platform to encourage citizen participation on local issues?

Sadly, what the IPL did in South Africa vanished on re-appearing on Indian soil. There were few instances of supporting education and children. What the TV cameras have been busy showing are cheerleaders, Bollywood stars, and highly subsidised rich individuals. I wonder what happened to all the good causes the IPL supported while in South Africa.

It is interesting to contrast India's greatest sporting event with American sporting events – college or professional. There is no major sporting event in the U.S. without the national anthem and the presence of the armed forces. On the occasion of Veteran's Day – a national holiday in the U.S. to celebrate and thank those who fought past wars – a National Football League (NFL is the professional football league that can be compared with the IPL), player after player thanked his friends, relatives, and family members who are serving or have served in the military. Military personnel, police officers, fire fighters, and war heroes are acknowledged and celebrated practically every major game.

At my university, every (American) football game has invitees from the military and the 80,000-plus spectators cheer war heroes and military personnel. It is common to recognise excellent researchers and teachers during the game and to beam their names on giant screens. Many scholarships are given to promising and deserving students. Numerous businesses are recognised for their contributions to improving local communities. People who have made significant contributions to the community are recognised. The games are used to inform worthy causes and contributions that encourage others to participate in the broader societal goals.

How wonderful if the IPL could bring attention to the hundreds of thousands of military and police personnel who toil in the harshest conditions and protect the freedom of others? Why should the IPL not partner with leading NGOs who have made sustained contributions to improve communities? Let an independent body of thinkers select those NGOs for the IPL to showcase.

The ugly part of the IPL is long and has been discussed extensively. It is getting nastier each day. What else one can one expect if the government is a partner and subsidises the cost of the show? While some economic incentives can be justified to get the ball rolling, there is enough evidence that the IPL is enormously profitable and there is no need to provide it tax subsidies or for the government to bear all the security costs.

It is not worthwhile blasting the IPL for having rich owners and Bollywood stars. The fact is they have the resources to take risks and make certain things happen. The objections that the rich are becoming richer are shortsighted. But what we need is to stop subsidising these rich owners in the name of economic development that lowers the supposed risk, but makes the rewards disproportionately higher. In fact, the opaqueness of the bidding process in the IPL gives rise to such disproportionate risk-reward tradeoffs. We need a full investigation of alleged money laundering, tax evasion, gambling, and other illegal activities. Sadly, there are hundreds of investigations in India that have not yielded any meaningful results. These investigations are themselves manipulated or delayed as the nexus runs deep and wide. One should not be surprised if there are one or two sacrificial lambs to maintain the status quo. The trust in the system's willingness to unearth the truth is very low.

There is anger over the exorbitant compensation paid to the players. Once again, it is futile to grudge this compensation. The owners will pay, based on the value players bring to the franchise. But this value is unnecessarily exaggerated by government subsidies. If the franchise had to pay taxes and market-based facility rental costs and incur security costs, then there would be greater sense in how players are compensated. It is once again a lesson on how the government enables these private initiatives to be irrational.

The real ugly part of the IPL is the disruption of the education of the most important national resource – the children, who are also the most passionate about cricket. Why in the world would the IPL host its games during the exam period of the entire nation? Of course, it is easy to say to the parents: shut off TV and the radio. But in this day and age of the Internet and wireless connectivity, the distraction remains.

While the media thrash the IPL management and politicians call for banning the IPL, let's not throw the baby out with the bathwater. Let's promote the good and minimise the ugly side. It is a giant platform that attracts the resourceful and educated and the energy can be translated for the good of society. Let the IPL adopt government schools, promote education, recognise community leaders, teachers, and the military, and bring attention to the issues that matter to the nation. We saw that in South Africa. I am sure people are forgiving of some of the sins and the subsidies. Let some of the profits go to a greater cause.

Hopefully, the players will involve themselves more with improving educational opportunities for the needy. Their value can only go up as more people will support the products they endorse. The former Australian captain, Steve Waugh, epitomises the good and what one can accomplish with fame and resources. His educational trust and welfare projects in India supporting children of leprosy patients at Udayan, and his initiatives to promote literacy and vocational skills in underdeveloped areas, must become a role model for the IPL and for cricketers. It is not unusual for American sport stars to have huge trusts to promote educational opportunities and become spokespersons to engage communities with meaningful projects. One can only hope the IPL and its players can engage on a greater scale to bring attention to real issues that plague the nation.

An important lesson once again: if the government becomes embroiled in private economic activity, there are numerous unintended consequences. Let the private take the risk, pay the market price for facilities and security, and reap the rewards. And let's not forget that the greatest cricketing event in India can be a giant platform to energise the masses for the greater good.

(Prabhudev Konana is the William H. Seay Centennial Professor and Distinguished Teaching Professor at the University of Texas at Austin, and can be contacted atpkonana@mail.utexas.edu)