The Indian Premier League is also widely and justifiably viewed as a civilisational nadir. A previously unimaginable blend of bad taste and bad faith, the IPL manages to simultaneously insult women, history, cricketing skill, and the intelligence of its viewers. What is too little appreciated, however, is how much it reveals about the Indian economy.
About its excesses prior to the slowdown; about the borderline-illegal self-centredness of the owners of Indian companies; about poor management being covered up by good public relations and a sycophantic press; about an apparent inability to do business openly and transparently.
I don’t just mean the extraordinary obscurity that surrounds who actually owns some of the teams. The Indian public and its Press have happily chosen to believe that many expensive cricket teams can be owned largely by movie stars and other assorted celebrities, and not shadowy financiers spending a few years unknown for tax purposes.
This once again demonstrates India’s unique ability to be dazzled and distracted by glittery things.
Unsurprisingly, this country is also a major growth market for American pro wrestling. I don’t even mean the complicated question of how much tickets actually cost. If you watch a match in Delhi from box seats, for example, you get a ticket that has “Rs 30,000” or something like that prominently printed on it but, naturally, you didn’t pay that much, you got it at a sharp discount ‒ or you were given it free by an oligarch who wants a favour. In effect, nobody pays full price for hideously expensive tickets, which allows the league to claim both that the games are exclusive and that their future revenue from ticket sales are incredibly high.
If people start questioning the claims about ticket revenues, then too many other aspects of the teams’ finances will start being analysed. This is not unlike India’s real-estate market, where sale prices for houses are way too high, and yet many are empty ‒ because no real-estate developer can afford to admit that they’re too high. They might have to send them lower, which would affect the value of their companies’ assets, and so on down the slippery slope to housing- market collapse.
No, the IPL reveals a great deal about the Indian economy because of the identity of the teams’ owners ‒ at least, in those cases in which we know who the real owners are.
When one of the IPL’s champions was removed from the roster in 2012 because the team’s owners went bankrupt and couldn’t pay league fees, people began to notice that being really, really bad at business seemed to be what most IPL owners had in common.
Let’s see. The team that was removed in 2012 was the Deccan Chargers, owned by the Deccan Chronicle Group. The companies’ value in 2007? Rs 5000 crore. Their value in 2012? Rs 200 crore. The group had lost 96 per cent of value, and was massively in debt.
Who else? Well, shares in the Delhi team’s owners, the Andhra Pradesh–based construction company GMR, were trading at around Rs 120 as 2007 ended; they’re trading at around Rs 25 today.
Another team was removed in 2013; it belonged to the Sahara India Group, whose flamboyant owner was thrown into jail by the Supreme Court for apparently running a Ponzi scheme. Subrata Roy, the owner of the Sahara Group ‒ officially the Sahara Parivar, or Family ‒ is one of a kind. He legally changed his name to Subrata Roy Sahara. He calls himself “Saharashree”, or “Man of Sahara”; designated himself his group’s Managing Worker; and had a special “Sahara salute”.
He had his wife record a music video as a paean to their marriage and his corporation ‒ which coincidentally served to get pictures of his real-estate project and his airline free airtime on music TV. In it, he was pictured repeatedly walking down roads and in motorcades surrounded by people dressed as members of an American President’s secret service.
He himself also wore a dark suit and dark glasses, but was set apart by the fact that he was also wearing a cape with a red lining. He claims to employ a million Indians. A Noted Patriot, he occasionally brings a hundred thousand or so of them together to set a national-anthem-singing record. He also claims to have 30 million investors; though, oddly, when the regulators tried to return a lot of money to them in 2013, not one actual person showed up, which has got to be a far more unusual world record.
But the most interesting thing about Subrata Roy Sahara is that he was considered perfectly normal for an Indian tycoon .
The league’s overall sponsor was India’s largest real-estate company, DLF: its shares cost around Rs 1200 each when the league opened, and around Rs 170 in late 2014, and thousands of crores of rupees of value has just vanished. DLF is one of the two companies to have lost most value since 2007. (Fortunately, the other was its main rival, Unitech.)
Oh, and let us not forget that its dealings with the son-in-law of India’s most powerful woman, Sonia Gandhi, mean DLF is the best-known crony capitalist in the land.
And, above all, there’s the Chennai Super Kings. I don’t even know where to begin. OK, here’s this: they’re owned by N. Srinivasan, who also happens to run the board that controls Indian cricket. This is not a conflict of interest, because in India, we do not have conflicts of interest ever.
Seriously - Manmohan Singh’s telecommunications minister, Dayanidhi Maran, regulated the business of his brother, Kalanidhi Maran, Tamil Nadu’s largest media mogul, and I am a hundred per cent sure he did it a hundred per cent objectively. Similarly, I am a hundred per cent sure that N. Srinivasan did not get people to keep picking lots of his Chennai players for the Indian team to maintain his cricketers’ brand value, but because he cared about the Indian team.
When his son-in-law was jailed for fixing IPL matches, Srinivasan pointed out with perfect justice that it had nothing whatsoever to do with him.
I confess to being a little puzzled as to why Srinivasan did not actually offer to investigate himself in case there was any wrongdoing. I am a hundred per cent sure he would have done it a hundred per cent objectively.
The amazing thing about N. Srinivasan is that he is not just a superb class-A above-reproach administrator for Indian cricket ‒ and now world cricket, since the International Cricket Committee has been so impressed by his uprightness and dedication to duty that it has elected him chairman ‒ but that he is an equally good businessman. Indeed, his company, India Cements, holds an enviable record: it is the worst performing company, relative to its sector, among India’s top 500. It lost 60 per cent of its value in the five years after the IPL started, while the rest of its sector held its own.
None of this is happenstance. The tawdry aesthetics of the IPL mirrors its owners’ errors of judgement. Its disconnectedness from true cricketing skill, from the lives and histories of the cities that hosted its teams, is a direct consequence of the sort of companies that were funding it.
The IPL was built on crony capitalism and the easy money of the pre–crisis boom.
Anyone, especially a crony capitalist, could get his hands on cash then, even for something as unproductive as a sports team; and the ambitious, self-obsessed crony capitalist took the money, why not?
Back in those days, it was possible to binge on easy money, using it to fund what seemed like endless expansion, and some very dubious acquisitions. The more dubious the profitability of the enterprise you run, the more important it is you overspend on something flashy like the IPL: the more visible you are, as any successful Ponzi schemester can tell you, the less likely the regulators are to come after you, and the less you are seen by possible lenders as a risk. And, of course, it makes you more likely to find defenders, including politically powerful protectors.
Excerpted with permission from Restart: The Last Chance for the Indian Economy, Mihir S. Sharma, Random House India.
We welcome your comments at
letters@scroll.in.
About its excesses prior to the slowdown; about the borderline-illegal self-centredness of the owners of Indian companies; about poor management being covered up by good public relations and a sycophantic press; about an apparent inability to do business openly and transparently.
I don’t just mean the extraordinary obscurity that surrounds who actually owns some of the teams. The Indian public and its Press have happily chosen to believe that many expensive cricket teams can be owned largely by movie stars and other assorted celebrities, and not shadowy financiers spending a few years unknown for tax purposes.
This once again demonstrates India’s unique ability to be dazzled and distracted by glittery things.
Unsurprisingly, this country is also a major growth market for American pro wrestling. I don’t even mean the complicated question of how much tickets actually cost. If you watch a match in Delhi from box seats, for example, you get a ticket that has “Rs 30,000” or something like that prominently printed on it but, naturally, you didn’t pay that much, you got it at a sharp discount ‒ or you were given it free by an oligarch who wants a favour. In effect, nobody pays full price for hideously expensive tickets, which allows the league to claim both that the games are exclusive and that their future revenue from ticket sales are incredibly high.
If people start questioning the claims about ticket revenues, then too many other aspects of the teams’ finances will start being analysed. This is not unlike India’s real-estate market, where sale prices for houses are way too high, and yet many are empty ‒ because no real-estate developer can afford to admit that they’re too high. They might have to send them lower, which would affect the value of their companies’ assets, and so on down the slippery slope to housing- market collapse.
No, the IPL reveals a great deal about the Indian economy because of the identity of the teams’ owners ‒ at least, in those cases in which we know who the real owners are.
When one of the IPL’s champions was removed from the roster in 2012 because the team’s owners went bankrupt and couldn’t pay league fees, people began to notice that being really, really bad at business seemed to be what most IPL owners had in common.
Let’s see. The team that was removed in 2012 was the Deccan Chargers, owned by the Deccan Chronicle Group. The companies’ value in 2007? Rs 5000 crore. Their value in 2012? Rs 200 crore. The group had lost 96 per cent of value, and was massively in debt.
Who else? Well, shares in the Delhi team’s owners, the Andhra Pradesh–based construction company GMR, were trading at around Rs 120 as 2007 ended; they’re trading at around Rs 25 today.
Another team was removed in 2013; it belonged to the Sahara India Group, whose flamboyant owner was thrown into jail by the Supreme Court for apparently running a Ponzi scheme. Subrata Roy, the owner of the Sahara Group ‒ officially the Sahara Parivar, or Family ‒ is one of a kind. He legally changed his name to Subrata Roy Sahara. He calls himself “Saharashree”, or “Man of Sahara”; designated himself his group’s Managing Worker; and had a special “Sahara salute”.
He had his wife record a music video as a paean to their marriage and his corporation ‒ which coincidentally served to get pictures of his real-estate project and his airline free airtime on music TV. In it, he was pictured repeatedly walking down roads and in motorcades surrounded by people dressed as members of an American President’s secret service.
He himself also wore a dark suit and dark glasses, but was set apart by the fact that he was also wearing a cape with a red lining. He claims to employ a million Indians. A Noted Patriot, he occasionally brings a hundred thousand or so of them together to set a national-anthem-singing record. He also claims to have 30 million investors; though, oddly, when the regulators tried to return a lot of money to them in 2013, not one actual person showed up, which has got to be a far more unusual world record.
But the most interesting thing about Subrata Roy Sahara is that he was considered perfectly normal for an Indian tycoon .
The league’s overall sponsor was India’s largest real-estate company, DLF: its shares cost around Rs 1200 each when the league opened, and around Rs 170 in late 2014, and thousands of crores of rupees of value has just vanished. DLF is one of the two companies to have lost most value since 2007. (Fortunately, the other was its main rival, Unitech.)
Oh, and let us not forget that its dealings with the son-in-law of India’s most powerful woman, Sonia Gandhi, mean DLF is the best-known crony capitalist in the land.
And, above all, there’s the Chennai Super Kings. I don’t even know where to begin. OK, here’s this: they’re owned by N. Srinivasan, who also happens to run the board that controls Indian cricket. This is not a conflict of interest, because in India, we do not have conflicts of interest ever.
Seriously - Manmohan Singh’s telecommunications minister, Dayanidhi Maran, regulated the business of his brother, Kalanidhi Maran, Tamil Nadu’s largest media mogul, and I am a hundred per cent sure he did it a hundred per cent objectively. Similarly, I am a hundred per cent sure that N. Srinivasan did not get people to keep picking lots of his Chennai players for the Indian team to maintain his cricketers’ brand value, but because he cared about the Indian team.
When his son-in-law was jailed for fixing IPL matches, Srinivasan pointed out with perfect justice that it had nothing whatsoever to do with him.
I confess to being a little puzzled as to why Srinivasan did not actually offer to investigate himself in case there was any wrongdoing. I am a hundred per cent sure he would have done it a hundred per cent objectively.
The amazing thing about N. Srinivasan is that he is not just a superb class-A above-reproach administrator for Indian cricket ‒ and now world cricket, since the International Cricket Committee has been so impressed by his uprightness and dedication to duty that it has elected him chairman ‒ but that he is an equally good businessman. Indeed, his company, India Cements, holds an enviable record: it is the worst performing company, relative to its sector, among India’s top 500. It lost 60 per cent of its value in the five years after the IPL started, while the rest of its sector held its own.
None of this is happenstance. The tawdry aesthetics of the IPL mirrors its owners’ errors of judgement. Its disconnectedness from true cricketing skill, from the lives and histories of the cities that hosted its teams, is a direct consequence of the sort of companies that were funding it.
The IPL was built on crony capitalism and the easy money of the pre–crisis boom.
Anyone, especially a crony capitalist, could get his hands on cash then, even for something as unproductive as a sports team; and the ambitious, self-obsessed crony capitalist took the money, why not?
Back in those days, it was possible to binge on easy money, using it to fund what seemed like endless expansion, and some very dubious acquisitions. The more dubious the profitability of the enterprise you run, the more important it is you overspend on something flashy like the IPL: the more visible you are, as any successful Ponzi schemester can tell you, the less likely the regulators are to come after you, and the less you are seen by possible lenders as a risk. And, of course, it makes you more likely to find defenders, including politically powerful protectors.
Excerpted with permission from Restart: The Last Chance for the Indian Economy, Mihir S. Sharma, Random House India.