Thursday, March 27, 2008

How bizzare can a Not-for-profit organisation get ? The example of Indian Cricket Board (BCCI).

Fanaticism consists in redoubling your effort when you have forgotten your aim.- George Santayana.

Opening the national TV channel the other day , I zoomed into a discussion on BCCI’s affairs and the IPL. While the discussion was mostly on between the merits of slam-bang cricket (read T20) & classical cricket (read Test matches & ODI), the advent of big money to BCCI was also being discussed with lots of enthusiasm.
In between, two comments caught my attention.

The first one made by a BCCI marketing official stated that
“BCCI is a not-for-profit organisation …..” He was speaking about the fact the individual BCCI officials don’t make money.
The second one , made by an international cricket commentator who also represents a global broadcaster , was about
“How much value can the BCCI give a sponsor?” . He was talking about general improvements in cricket.

Give me a break.
NFP ? - I thought these guys make crores of money but it sounds like they are doing a favour to the Indian public
Value to the sponsors ? - What about value to the game of cricket, its tradition and the paying public?

Lets take first thing first.

BCCI is a NFP.
BCCI’s annual revenue is nearing 500 crores now and is bigger than quite a number of midcap companies in the country.
The question is, who is the BCCI for ? To know that one must revisit the characteristics of a NFP .

In my first post about the advent of Corporate NGOs, I made a distinction between a Not for profit organisation (NFP) and an NGO. Essentially both are similar kind of legal entities qualifying for income tax exemptions. But a NFP can generate any amount of revenue and spend any amount too while a NGO is purely grant driven and has to rein in the costs.

A NFP can be registered as a Trust, Society or a section-25 company (a company promoted for charitable purposes).1
BCCI is registered as a Society under the Registrar of Society act of Tamilnadu. As per the act , it is managed by a governing council , whose member are elected in the annual AGM. The AGM is attended by the members of the society , who essentially are the state associations.
The stated aim of the BCCI is to promote cricket in India and the stated stakeholders are the Indian Public. 2 (Incidentally, BCCI still doesn’t have a website of its own. All information was sourced from public domain in the world wide web. It has just today signed a 50 MUSD deal for development of BCCI & IPL website on a 50:50 revenue sharing basis.)

BCCI generates revenue through primarily four means:

1. Membership fee from the associations.
2. Sponsorhip deals
3. Selling of broadcasting rights
4. Hosting of cricket matches.

Since the number of state associations is fixed , it is obvious that the majority of the nearly 500 crores revenue for the BCCI comes through sponsorship deals & sale of media rights.

Now, here comes the catch.

A society which has been set up nearly 90 years ago to promote cricket in India is legally bound to provide increasing value to the members of the society (in this case , associations) and through them the affiliated cricketers .
Secondly , promotion of the game in India involves making it more popular which implies that the general public or the viewers are indirect stakeholders who also should get increasing value from watching high quality, competitive international and national cricket.
Finally, cricket in India will said to have been promoted if there is substantial growth in the number of qualified first class cricketers.

Sponsorship in a NFP is necessarily solicited to fill the revenue gap of the budget after the planned budget is drawn up listing down the annual, activities of the board. Because BCCI hosts hundreds of matches every year across the country , sponsors & broadcasters will generally see a lot of value in putting their money after cricket . Once the revenue gap is plugged in , BCCI should typically go ahead with their agenda of promoting cricket and spending the money judiciously in building infrastructure, in wide-spreading the talent-catching net , in coaching and in hosting matches. In this way, it would provide additional value to its members, cricketers and the general public.

But when money generated from the sponsorship and media rights become the most important objective of the society , then it is but natural that the BCCI would have to start thinking of giving value to the sponsors first and its members next.

This is exactly what is happening today in BCCI.
Insiders say that the BCCI has been so subservient to the sponsors that even the selection committee members sing to their tune. Players are selected or dropped depending on the duration of the individual multi-year contracts with various sponsors. During a live telecast, advertisements sometimes eat away beyond the stipulated time between end of one over and the start of the next. Contracted players even give their practice a miss just two days before a test match to spend one half to a full day with their sponsors to take part in an ad-shoot.

Of course , the public pays for all the extravaganza by buying overvalued products of sponsors (read colas, energy drinks, durables etc.) , buying entry tickets , watching endlessly smartly- made- ads of ordinary products during the match, participating in inane contests through SMS polls & generally getting carried away by all the hype generated around a match.

It’s the age for hype , of carefully generated advertisements around the game or the player and more-carefully planted mass promotion through broadcasting media. The timing of promotion is also important. Notice that the ongoing test match with South Africa is not on national television. Just about an year back, the Information & Broadcasting minister had raised a hue and cry against private broadcasters for not giving feed to Doordarshan. Wonder why the government is silent today. Aren’t cricket matches serving any more the interests of the public ? or Is it because , sponsors of IPL want to “purposefully” spend their money for generating hype around IPL and hence they are giving the test-match adverts a miss. With no ads forthcoming, it looks like Doordarshan has chickened out of national broadcast of the matches.

The Brave New World of Cricket is here. Sponsors want to invest money in younger players and hence test matches do not get shown on national television. Even the public takes in all the hype and thinks that they will get to see quality and competitive cricket.

The sponsors have equated cricket with entertainment and are looking at those public who will part with some of their entertainment budget to watch more of 3- hour -slam-bang cricket and less cinema or visits to the mall. So, the masala drama churned out by filmy performers gets equated with the drama on the cricket field.

Give me a break! Will a hundred Amitabh or a thousand Sharukh Khan equate one Tendulkar, Sehwag, Kapil, Gavaskar, Pataudi, Azhar or Ganguly?

Will the demand on performances on the cricketers also burn them out quickly?

Will test match and thereby classical cricket die a forced but gracious death in viewer-ship interest?

Of course, time will give the answer.

But one answer is right in front of us.
BCCI is aN extremely corrupt form of a NFP in India today.
It does not follow the fundamental aims of the body to give value to its primary stakeholders & public . It gets exemptions from payment of tax inspite of making 500 crores a year. It promotes sponsors’ interests. It has no vision of how to conserve the traditional game of thinking cricket in the years to come. It has become a hot bed of power & money broking for mediocre official-bearers while the ex-cricketers are treated like employees.

Either the NFP rules must get amended ( to get a revenue-cap for example) or the Government must tax the body. The government should also probably make it compulsory for such high-revenue bodies to make their accounts, MOU and Article of Association public. A society registered as NFP should show evidence that it exists for the interest of the public.

Till that happens, BCCI will revel even at the hype generated by such controversies.

1. Registration of NFP:
2. Vision Statement of BCCI (Circa 2000)

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