Tuesday, April 3, 2007

Free Market Solution to Counter the BCCI Sloth.

ICL (Indian Cricket League) is here.
Read Business mogul announces new cricket league or Zee TV announces parallel cricket league.

I believe that this could be the biggest thing that has happened to Indian Cricket since 1983. Maybe since Sachin joined the team. But you get the idea.

For starterts, I am sure that this is going to get much more ugly before the beauty of free markets and competition will hit the BCCI. For those who follow the NFL in USA, this is very similar to the starting of AFL to counter NFL's monopoly over American Football.

You can read the entire story behind how the David in AFL brought the Goliath in NFL to its knees and formed the new NFL here. This also gave birth to the Superbowl, which is still the most wanted trophy in American sports (as in winning a superbowl, or getting a superbowl ring, as it is usually referred to, is considered more prestigious than any other sporting achievement, including winning the NBA, MLB, NASCAR or NHL championships). They all have pride associated with them, but a winning a superbowl is winning a superbowl.

Obviously, the ICL has just been announced and BCCI is still the most powerful (at least richest) sporting organizations in the world. This all might end in two weeks, but I hope Subhash Chandra has as much business acumen, support structure and more importantly, the guts (read as MONEY) to fight the battle as Lamar Hunt had to fight the NFL.

But the most interesting aspect of this fight is going to be the business strategy element, not cricket itself. This is a text book situation of an attempt to turn a monopoly into a little more competitive oligopoly, and all the answers lie in Game Theory. The idea here is simple (yet complex). Since there are only two players in this game (BCCI and ICL), it is relatively easy to predict what the next move of a player is going to be, and your current move takes into consideration your opponent's next move. The research is done, awards have been distributed and the world has seen millions of real life scenarios of Game Theory in practice. There will be an eventual equilibrium. We just have to walk through the science to see what it is.

So, let's try to predict what is going to happen in the Chess match between ICL and BCCI. The only disclaimer here is around the assumption that both the parties involved behave "rationally" (whatever that means). While ICL can be expected to be reasonably rational (given its affiliation to a private corporation that is interested in money and nothing else), BCCI could very well go out of the limits of "reasonable behaviour" to protect its monopoly. In that case, all bets are off and we wait for the Supreme Court to settle issues for us, and that is never a good idea.

I can almost hear this conversation between ICL and BCCI:

ICL: I will develop the domestic talent pool and you can pick and choose from that pool to form the national team. I will take care of scouting for talent, developing talent (physical fitness and the likes included), make a more compelling domestic cricket product, make money out of it and everyone is happy. What I need from you is to share your facilities, allow some of your contracted players to play in my league and treat me like a little brother.

BCCI: I already have a slew of younger brothers in the form of various regional entities. They have a domestic product (Ranji Trophy, Duleep Trophy). They alredy take care of their cricketers and provide me with a pool to select talent from. Maybe there are some loopholes in this "family", I agree, but we don't need to bring in an outsider to settle this issue. We will clean our house and you, my dear ICL, can to go to hell. And by the way, I am also starting a inter-city 20-20 format league. You are not bringing anything new to me.

ICL: Well, you do have your regional brethren, but they are sloths (in a hushed tone "just like yourself....hahahah"). They don't offer a compelling domestic product. You can keep your domestic cricket in the form of Ranji and Duleep trophy alive. No one watches that any way. I will introduce a 20-20 league and expand into a one day format. Mine will be more compelling and my output of cricketers will be better than yours. Given the recent performance of the team in the WC, you better accept my very well timed offer, or else you will have a lot of explaining to do.

BCCI: Well, you do make a good point. But I still believe I can solve my problems and you can still go to hell.

ICL: If you want to stick to that routine, then that's your call. I am going to start my league any way. Let's see who can manage the process better. Me, a corporation designed and developed to perform such processes or you big gorilla, who has a lot of money but cannot put forward a good team when there is a need for you to do so. You can get lost.

All this to say that ICL and BCCI are going to be competitors long before they can be collaborators.

The success of ICL depends on the following:
1. Their ability to attract talent, both domestic and international (At least in its nascency, be able to convince young cricketers that it is worth saying no to a regional team, not play a Ranji Trophy, but instead play the ICL 20-20 or one day trophy)

2. Their ability to promote a domestic cricketing product (mind you, this is going to be very difficult, but if ICL can pull this off successfully, then BCCI is in a lot of trouble. They will have to share the cash with someone else, which is not the case today)

One thing in ICL's favor is the timing. People's crazy infactuation with cricket is at its lowest levels in a long long time. Even a successful tour to Balgladesh will bring some more of this fanaticism back to life. It is like an addiction that people will never get out of. It is cyclical in nature and ICL has caught the wave at the best possible time. The issue of timing is also important from a sponsorship perspective. Sponsors are looking at alternative places to put their money, and this might be the right place for some sponsors at least.

The other thing in favor of ICL is its ownership, parenthood or lineage. Zee TV is already in everyone's house, India and abroad. They can push the ICL case as strong as anyone else. But the question is, how strong a commitment does Zee have? How much is it willing to "Invest" (read: lose) in this venture. Fortunately, Zee also has the exclusive rights to some of the neutral venue games played by the Indian team.

All said and done, the ultimate holy grail for each Indian cricketer (each potential cricketer born in India, I should say) is still to play for the national team, and unfortunately, BCCI has the final say in that. Money can change this player mentality to some extent, but I don't believe that domestic cricket will be THAT POPULAR any time soon.

That leaves BCCI with a lot of clout. What if the BCCI says:
1. No player on contract with BCCI can play for ICL or any other league for that matter. (well, this BCCI will say for sure)
2. For national selection, BCCI will give preferential treatment to players who have never signed with any other league (while BCCI may not be able to say this explicitly, they can easily convey the message and implement it as well)
3. It is a prerequisite to play in doemstic cricket under the BCCI aegis to be eligible for national selection

This is like Intel telling Dell that if you use AMD chips on your computers, then the next time we release a new chip, HP will get preferential treatment / "quota".

In reality, there may not be much ICL can do to directly attack that clout, but build the league in such a way that

1. Players are willing to play for ICL for life, knowing that there is more money in it than in other domestic cricket (and hence I give up on their international cricketing aspirations) or
2. The talent pool is so high that ICL can continuously demonstrate that ICL players are better than BCCI players

No matter how the saga will end, I am sure that if ICL can exist for 3 to 6 years, it will improve the Indian team. I strongly believe that a product coming out of a competitive market is bound to be better than one that is an outcome of monolopy.
All power to free markets.
I want ICL to be able to compete with BCCI to the extent that we believe an ICL team representing India has a better chance for success than what BCCI can deliver.
Let's all wait for the drama to unfold.

4 comments:

Maakhi kirkiri said...

Sridhar,

Good post. I agree for the most part. But the cynic in me believes the theory that Mr. Chandra, ZEE Tv is doing this to get a TV contract. He was jilted altough he was the higher bidder by BCCI in the last go around. So he might give up ICL if given a TV contract or an assurance.

The other aspect I read somewhere is ICC coming into the picture. BCCI has pissed of ICC and other cricket boards. What if ICC recognizes ICL and a team they form as an international team ? ICC will play a part and be a card Zee can use if they are really serious. But I do not beleive in thier intentions yet ..

Sridhar Loke said...

ICC may very well throw a monkey wrench into the system. I am not even sure if they can recognize ILC. BCCI may have a say in that one as well. BCCI has a lot of power, but if Chandra is doing this just for the future TV rights, then there is no hope. Even though I guess $100 crores in expenses and a potential alienation of BCCI may not be in his favor if that is the ultimate aim.

Srirambatla Dilip said...

Sridhar,
What abt condition of stste and below level cricket teams standards? If Chandra does some real groundwork at that level then he might be doing a great service to the game of cricket in India, and if he is eyeing only money involved at our oneday and test matches then its another BCCI making money out of indian fans

Srirambatla Dilip said...

Sridhar,
What about standards of state and below level cricket in India. it gives us best players for national team but gets a very little chunk of money in return. if Chandra is going to change that picture then it will really help a lot for indian cricket, rest it will be another BCCI eyeing money from indian cricket fans.