Howzzat for reforms?

WHEN LAST YEAR'S BUDGET was unveiled, the South African cricket team was on the last lap of its India tour. The team had re-entered international cricket (they were pariahs since March 1970 due to Apartheid) in 1991, the same year India re-entered the world economic order. While this may have been pleasantly coincidental, over the years, numerous events have led cricket fans, businessmen, economists, and policymakers to ponder over the correlation the sport has had with the changing economic landscape of the country. Indeed, many of the individual events that changed the game for India coincided with those that altered its economy. On a broader level, reform of the sport often tracked reform of the economy. The patterns sometimes look so similar that the journey of the game could well be a surrogate for the economy’s trajectory.

A quick example. If in recent years the big story for India Inc. has been going abroad and conquering the global markets (think Novelis, Corus, betapharm, Zain, etc.), so has it been for cricket. In the 1980s, the win-loss ratio for India in Tests and one-day internationals (ODIs) on foreign territory was 0.25 and 0.35 respectively. (India won a match for every five Tests it played). Over the last decade, that has improved to 1.09 and 1.03.

Laveesh Bhandari, director at Indicus Analytics, an economic think tank, agrees that key events in the economy and cricket have happened alongside. He then points to a correlation: “As retail per capita income increases, it allows individuals to invest in the game and play better.”

Three years back, economists Russell Smyth and Vinod Mishra of Australia’s Monash University published a paper that showed how the performance of the Indian cricket team in ODIs influenced Dalal Street. The idea for the study came from articles on “how cricket stops India”, says Mishra. “We thought of conducting a systematic study based on actual data.”

The research found that while the Nifty (CNX Nifty) stayed generally flat the day after a win, the day after a loss, it dropped by an average of 0.23%. Sachin Tendulkar’s influence was more pronounced. In the 100 matches that he played and India lost, the stock market’s loss was nearly 20% more.

The 1980s threw up early signs of the relationship cricket had with the economy. Economist Amir Ullah Khan, who teaches at the Bangalore Management Academy, says both emerged from the dismal scenario of the preceding 30 years. It was the decade when the 3% annual growth of GDP, the ‘Hindu rate of growth’, was finally shrugged off. Rajiv Gandhi, the then prime minister, experimented with taking a market-friendly approach; joint ventures were inked with foreign companies; the transforming powers of technology became visible in the wide-scale computerisation of public sector offices; the new Telecom Commission spawned thousands of long-distance telephone booths across the country, etc. India may not have been an economic powerhouse in the making yet, but there was no denying its potential.

In cricket, India came out of nowhere in June 1983 to beat the West Indies and lift the Prudential World Cup. When the tournament had begun, the odds of India winning were 66:1. At the finals they were 60:1. Two years later the country would win another tournament, the Benson & Hedges World Championship of Cricket in Australia. West Indies, Australia and England still dominated the game, but India was now the country to watch out for.

Gandhi’s willingness to take a more pragmatic view occasionally benefitted cricketers. When Ravi Shastri
won an Audi 100 after being adjudged the Champion of Champions at the 1985 tournament, Gandhi waived the hefty import duty on the car, at a time when duties were among the highest in the world.

If there were two things that changed the mood of the nation at that time, they were winning the 1983 Prudential Cup and the launch of the Maruti 800, events separated by nearly six months. The game and the car brought about a new sense of confidence to the nation. Business also began taking a closer look at cricket. Dhirubhai Ambani, ever savvy about the next big thing, sponsored the Reliance World Cup, held in 1987.

By the 1990s, finance minister Manmohan Singh began dismantling the licence-permit raj. Business was no longer about managing licences. This broke old monopolies and facilitated the rise of new entrepreneurs—Sunil Mittal, N.R. Narayana Murthy, and the like. At the same time, many of the old industrial houses faded—the Modis, Mafatlals, and parts of the Birla clan, among others. Many of India’s most valuable companies today, such as Infosys Technologies and Airtel India, grew post-1991.

If business democratised, so did cricket. For nearly 50 years, Bombay (now Mumbai) had a stranglehold on the game, much of which had to do with privileged access to coaches and selectors. Bombay’s greats included the Vijays (Merchant and Manjrekar), the Dilips (Sardesai and Vengsarkar), Polly Umrigar, Farokh Engineer, Sunil Gavaskar, and Sachin Tendulkar.

As historian Ramachandra Guha writes in his book The States of Indian Cricket: ‘If Yorkshire has been the cradle of English cricket, Bombay has played an identical role in India. The dominance of the two teams in their countries’ cricketing histories is such that what is said of Yorkshire—that if it is strong, England is strong—could just as easily be said of Bombay and India’.

Like in business, cricketing talent from the remotest corners of the country scripted their own fairy tales. The mix in the current Indian World Cup squad is an example of the wane of the Bombay Club: Munaf Patel (Ikhar, Gujarat), Piyush Chawla (Aligarh, Uttar Pradesh), Harbhajan Singh (Jalandhar, Punjab), S. Sreesanth (Kothamangalam, Kerala), and Zaheer Khan (Nashik, Maharashtra).

Harsha Bhogle, television presenter and writer, says young cricketers from small towns are hungry for recognition and thus spend much of their time practising. “The upside (playing professionally) for them is huge and the cost of failure relatively small,” he says.

The democratisation of cricket also resulted in Jharkhand’s finest hour. Mahendra Singh Dhoni with his Samson-like mane, showed a small-town background was no impediment to a meteoric rise. He debuted in December 2004, went on to captain the Indian side to the first ICC World Twenty20 crown in 2007, and put the country atop the Test rankings in December 2009. He also has the biggest endorsement deal in cricketing history—a three-year deal worth approximately Rs 210 crore with a JV between Rhiti Sports Management and advertising agency Mindscapes signed in July 2010.

“The great difference that we see today is the distinction between gentlemen versus players,” says Surjit Bhalla, managing director, Oxus Research and Investments, a New Delhi-based investment firm. “Nowadays, there are players in the Indian team from the upper, middle, or lower strata of society. It reflects the reality of upward mobility in Indian society; a person is no longer confined to a stratum just because he was born into it. This is what economic liberalisation promised.”

BY THE 2000s, both cricket and the economy had begun attracting big bucks. The 1996 Wills World Cup played across India, Pakistan, and Sri Lanka, saw rights for telecasting matches being wrested from Doordarshan and auctioned. WorldTel’s Mark Mascarenhas outbid heavyweights including Mark McCormack’s IMG-TWI and Rupert Murdoch’s News Corp in a deal that included a $2.5 million (Rs 11.4 crore) down payment as part of a $10 million guarantee to the Board of Control for Cricket in India (BCCI, the apex agency that governs the game).

TV deals have not only gotten bigger since, but the BCCI has also found more opportunities to make money through hosting fees, team and tournament sponsorships, gate receipts, etc. It is the richest cricket board in the world among the 10 full members of the International Cricket Council (ICC), with reserves of around $265 million, according to Ratnakar Shetty, BCCI’s chief administrative officer. Twenty years back it ran a deficit of $150,000. Shailendra Singh, joint MD, Percept, a marketing outfit that represents cricketers says BCCI funds nearly 70% of ICC’s expenses.

“India being such an important part of world cricketing affairs is a huge positive for the game; it is no secret that a major portion of our economics is drawn from India,” says Haroon Lorgat, ICC’s chief executive. He could well have been an MNC CEO referring to consumer products like cars or TVs.

BCCI’s story has uncanny parallels with the Indian economy. Around the time it was running a deficit, the Indian economy nearly capsized because of a balance of payments crisis. The country then had foreign exchange reserves of barely Rs 2,500 crore, enough to meet a fortnight’s imports. Today, they are at $300 billion.

India’s economic rise and more money chasing cricket are today entwined in a virtuous cycle. As new investments (hence jobs) put more money in hands of people, they consume more and more products, which pulls in more companies, who use the national opiate to advertise.

As cricket’s importance grew, BCCI began importing global talent to train local players. Former New Zealand opener John Wright arrived in 2000 as the Indian team’s first overseas coach. Till then, thanks to a misplaced sense of patriotism, the board had persisted with Indian coaches, even when they were ineffective. Wright was followed by Australia’s Greg Chappell and South Africa’s Gary Kirsten.

India Inc. mirrored this. Ranbaxy Laboratories picked Brian Tempest as its CEO, Taj Hotels brought in Raymond Bickson from The Mark, New York, Jet Airways appointed Wolfgang Prock-Schauer as CEO, Tata Motors hired Carl Peter Forester, and so on.

Businessmen and cricketers were now national icons, with a massive fan base. Today, Infosys’s Murthy and Tendulkar are crowd pullers, as much as Shah Rukh Khan.

Policy makers in both spheres also upturned conventional thinking. If disinvestment confronted set notions on the status of PSUs, setting up the Indian Premier League (IPL) and hawking star players was no different.

Balu Nayar, former MD of IMG India, the sports marketing firm, which helped develop and monetise IPL, remembers how the tournament came in for criticism. “Because of our socialistic baggage, people thought sport shouldn’t be linked to profit,” he says. The resistance to disinvestment was similar.

Ultimately, both fetched money. The state’s 74% stake in Modern Food Industries was bought by Hindustan Lever (now Hindustan Unilever) in 2000 for Rs 105.45 crore, Sterlite Industries bought Bharat Aluminium in 2001 for Rs 551.50 crore, Indian Petrochemicals Corporation was sold to Reliance for Rs 1,490 crore, and the like. The parallels in cricket: Kolkata Knight Riders paid $2.4 million for Gautam Gambhir, and Chennai Super Kings’s price tag for Dhoni was $1.5 million.

THE SIMILARITIES aren’t just about achievements. The match-fixing scandal of 2000 fell squarely in the middle of the two stock market scams of Harshad Mehta and Ketan Parekh.

The recent scams surrounding ex-IPL chief Lalit Modi and former telecom minister A. Raja have a similar ring. Both now 47, achieved success early. Raja became a cabinet minister at 35, while Modi became BCCI’s youngest vice president in his early forties. Both enjoyed significant political patronage, be it under DMK patriarch M. Karunanidhi (Raja’s mentor) or former Rajasthan chief minister Vasundhara Raje Scindia, but only for a while.

Coincidentally, it was auctions they oversaw that led to their downfall; for Raja it was 2G spectrum, while for Modi it was IPL franchises. The irony: both thought their actions would ultimately benefit their domain, and the end would justify the means.

There was a time not too long ago when India’s only potent attack was the slow spin, and wins were a rarity. The pace of attack changed irrevocably after the 1990s with India fielding an array of quick bowlers. Over the same period, the economy, which hitherto had been slumbering without any intention of becoming a world beater, transformed and got hungrier. For both, the game changed.