BCCI's Bodyline Bowling: Attack of a Monopolist

Update [7 Sep] -

The anti-monopoly watchdog in India, the Monopolies and Restrictive Trade Practices Commission (MRTPC), has initiated an investigation against the Indian board over its reported threat of a life ban to players joining the Indian Cricket League (ICL).

See BCCI faces monopoly investigation

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The rebel Indian Cricket League (ICL) has been grabbing headlines for a while, and the war of words between ICL and the BCCI has been escalating. Courts have given verdicts, current and former cricketers have taken sides and the media has played its part in sensationalizing the story.

The discussion so far appears to have focused mainly on the ICL's role as an unlicensed, unaffiliated body that is promoting itself without knowing exactly what it wants to be - is it a complete alternate cricketing structure? Is is a 20-20 cricket league? Is it an opportunity for players long on the fringes of the BCCI's national team, forever ignored by the selectors?

From an economics perspective, it is none of these. In pure economic terms, ICL is a competitor challenging what looks like an established monopoly. It is instructive to identify the market that the monopoly operates in and conduct a proper analysis.

The BCCI's "business interests" are mainly in selling broadcast rights (television, radio) of live cricketing events, selling official merchandise, tickets at the grounds and so on. Of these, the broadcast rights are the major revenue earner and the most contentious issue. The ICL's chief sponsor, Subhash Chandra, started it only after failing to match or exceed a bid for the rights to telecast BCCI events on his channel, Zee Television. Let us focus therefore on the "broadcast rights" issue, the main revenue source for the BCCI and the bone of contention in this debate.

Starting with the antitrust basics, what is the "market" that the BCCI has allegedly monopolized? How can it be properly defined? How can antitrust economics be properly applied to determine whether the BCCI possesses or is attempting to illegally maintain a monopoly?

"Broadcast rights" are a revenue source because they in turn enable television, radio or other media that acquire these rights to sell "advertising slots" to advertisers. Thus, in essence, the BCCI is merely a "content provider" that enables advertisers to show messages to a specific audience (one that is interested in cricket matches). Thus, the right economic analysis is NOT "control over cricket played in India" - but rather, the sale of "advertising slots".

Any analysis of monopoly must begin with a proper market definition. The next question then is whether an alleged monopolist has "monopoly power" in this properly defined market. The usual analysis begins with the "narrowest" market definition and applies the "Small but Significant Non-transitory Increase in Price" (SSNIP) test. The central question is: can an alleged monopolist in the properly defined market "profitably" implement a SSNIP? If the answer is yes, the analysis proceeds by expanding the market definition until a SSNIP becomes unprofitable. If the SSNIP is profitable only in a very narrowly-defined market, the "market power" held by the alleged monopolist is negligible, and thus, does not satisfy the "monopoly" criterion. [Note: If the market is already monopolized, a SSNIP may not be profitable since substitutes may be relevant at the monopoly price. The correct analysis however is to consider demand substitution at the "competitive price". See SSNIP and cellophane fallacy].

Let us consider the smallest market that the BCCI operates in - this may be defined as the "advertising slots" for a single match involving a BCCI-approved team (India, India A etc.). Can the BCCI profitably implement a SSNIP in this market? It is possible - especially if it is a match that has few substitutes (e.g. a world-cup final involving India, an India-Pakistan match of importance etc.). However, defining a market as a "single match" does not permit analysis of any increase in price as "non-transitory" and is more akin a one-time event, a single round of a multi-round game.

Broadening the definition, let us consider advertising slots for "matches involving the official BCCI India team" over a substantial length period of time. At present, BCCI has a monopoly over these advertising slots, through its ability to control the broadcast of these matches. Given that BCCI's team is widely acknowledged as the "Indian National Team", it is clear that there is no perfect substitute. Now consider some of the substitutes available to the advertisers:

• International cricket matches not involving India - Given an advertiser that is attempting to promote her product in India, these appear to place no constraint on the BCCI's ability to profitably implement a SSNIP. A SSNIP in BCCI's charges for broadcast rights will not result in the advertisers taking their business to an Australia-Pakistan match (the quality of cricket played may be better - but from a pure economic perspective, the advertiser cannot substitute the size of the audience for an India match by advertising in such matches).

• Cricket matches involving other "India" teams - These are also under BCCI's control and therefore not valid substitutes.

• International sports events involving Indian teams or individuals - No other sport in India matches the popularity of cricket. The prices for advertising slots for non-cricket team sports- football, hockey, or other team events or individual sports - tennis, billiards, chess - etc. are "much below" than those for cricket. A SSNIP in cricket advertising slots may push some advertisers towards these other sports - however, the SSNIP will still likely be profitable.

• Other advertising slots - "sporting events" attract a certain audience - and advertising for with other content (e.g. television soaps, sponsored television shows, reality television or game shows, live concert telecasts, movies) is an imperfect substitute for cricket advertising. The per-second rates of some of these events may be comparable (e.g. the Filmfare awards) - however, the target audience reached by cricket is not duplicated by these events.

• Not advertising through these media - clearly, no advertiser will "fully withdraw" advertising from television or other media in response to a SSNIP by the BCCI.

It is apparent that the BCCI wields "monopoly power" in the "advertising slots for cricket featuring Team India". In fact, an even broader market comprising "advertising slots for cricket featuring teams from India" may be monopolized by the BCCI.

The effects of a monopoly can be seen along dimensions - increased price (already seen in the advertising prices), reduced consumer choice (variety) and reduced quality.

The reduction of variety is obvious in world cricket, especially in comparison with other team sports. Unlike other sports such as soccer or basketball, cricket does not have "club teams" that are composed of talented players drawn from the various countries that play the sport. Unlike basketball - in which the NBA, US College Basketball and international basketball - all follow different rules and therefore, provide variety, cricket is confined to the ICC's rules. The pace of innovation has been slow (e.g. 20-20 or fielding restrictions in ODI cricket etc.), and has often been a response to challengers (e.g. The Kerry Packer alternative is credited with several innovations such as coloured clothing, day-night matches, limited overs cricket etc.). The number of international stars in cricket is capped by the number of international teams playing the sport and also the strength of his team. Thus, many high quality Aussies, Indians, Pakistanis etc. must wait their turn (sometimes for over a decade) to play for their teams while lesser players get the opportunity to compete internationally for teams such as Bangladesh, Bermuda or Zimbabwe.

The reduced quality came to the fore during the most recent cricket world cup. By including several fringe team (under the presumed goal of "developing the sport"), the world body permitted teams that wouldn't be competitive at the club-level in Australia, England or India, to compete with much superior teams, resulting in a large percentage of one-sided games (of reduced quality to consumers interested in watching a keenly contested match). Such mismatched contests are omnipresent in the present structure of cricket.

[One must acknowledge here that the pride of seeing a "national" team compete may not be substituted by city, county or club teams. However, the soccer example - with its immensely popular club teams - and a world cup every four years - proves that alternate structures that preserve international teams while allowing club teams to prosper are feasible.]

The BCCI's pronouncements after the announcement of the ICL and the unveiling of its initial list of players may then be seen as efforts to maintain its monopoly. The BCCI raised salaries for its players in domestic teams (as an employer of cricket players, the BCCI possesses "monopsony" power - i.e. it is the sole source of demand for cricketers), it threatened players with a life ban and that they would not be allowed to represent "India" (raising barriers to entry), it declined to make its stadiums available to the ICL (raising barriers to entry) and even roped in the ICC and other boards to prevent their players from joining the rebel league. It also barred coaches and officials joining the ICL from any current or future ties to "official" Indian cricket (e.g. Kapil Dev was removed as the head of the NCA, past-player's pensions were threatened).

The BCCI is bowling a lot of deliveries that would be considered "unfair" competition at a minimum (and "illegal" under several countries' laws). Let us hope that the ICL successfully ducks some, hooks other to the boundary and overcomes this "bodyline" attack to deliver some spectacular cricket!

The Rockstar Historian

I just returned from the publication event for Ramachandra Guha's India After Gandhi. Guha gave a wonderful account of his book and its main characters. In style and manner, his speech was nothing short of a rock performance. His eyes, the nervous energy of his movements, rapid speech interspersed with sips of water and a booming voice, combined with a mastery of the subject at hand - Ramachandra Guha is as wonderful a speaker as writer. He conveyed the essence of the book, some of the best stories, and the primary evidence for some of his striking conclusions, and most of all, his command over the subject. All in all, Ramachandra Guha has rockstar appeal coupled with a historian's studiousness.

A rare and valuable combination indeed. Time to read the book!

The Glass Palace by Amitav Ghosh

The novel is spread over more than a hundred years, in sub-continental settings ranging from Burma, to coastal India (Eastern and Western) and Malaya. Ghosh uses extensively researched facts to create a wonderful, arresting setting for the story. He opens the book with the fall of Burma to the British with this fabulous opening sentence:

There was only one person in the food-stall who knew exactly what that sound was that was rolling in across the plain, along the silver curve of the Irawaddy, to the western wall of Mandalay's fort. His name was Rajkumar and he was an Indian, a boy of eleven - not an authority to be relied upon.

Starting with the subsequent exile of the Burmese royal family to Ratnagiri, Ghosh runs through a century of events and many generations of characters in a book that alternates between the closely pictured personal lives of its characters and wide ranging social and political issues engulfing the sub-continent. He does a great job using such wonderful material to weave a captivating story. The writing is somewhat varying in quality, ranging from mostly sublime to somewhat trite in a few places.

Covering such a large period of time necessarily means that Ghosh picks and chooses the places and periods where his narrative goes into extensive detail. In such places, the book is languorous, describing the setting and emotions in fabulous detail. The visual imagery is striking. The royal palace in Mandalay, and the royal family’s forced removal are captured in such words that one can almost see the events unfold in front of one’s eyes. The teak trade, the dizzying geometry of rubber plantations, and the myriad working class occupations of colonial times are brought forth.

The characters in the first generation, Rajkumar, Dolly, Saya John, Uma and others are fascinating personalities. Born in uncertain times, many to unknown parents, these people without moorings of family find themselves taking whichever opportunities come their way. Yet, rather than be drawn along the stream, each of them stands strong. From Dolly’s dedication to the royal family, to Uma’s independent thinking, and Rajkumar’s entrepreneurship, the reader sees real people whose lives are constructed and change before their eyes. The next generation however, is rendered more as stereotypes – the artistic, liberal minded Dinu, the obedient handsome son Neel, and the innocent soldier Arjun. They appear to be in the novel to represent certain viewpoints or ideas, not as full of surprises as the earlier generation.

Ghosh uses this backdrop and cast of characters to narrate a tale of multiple countries under British colonial rule. The novel expresses the opinions of the rulers and the ruled, conflicting yet each very believable. The role of the British Indian army in the maintenance and expansion of the British empire is well captured, as is the revolt by its soldiers in the WW-II era. Throughout, Ghosh's characters are true to life, and yet represent the larger reality of the world.

A fabulous read.

The changing face of India...

India is changing, removing layer upon layer of accumulated dust, to reveal a "shining" economy.

Two television advertisements symbolize this change:

1. Lifebuoy for women (from the makers of "tandurustee ki rakshaa karta hai Lifebuoy")
2. Fair and handsome (from the makers of "Fair and Lovely" fairness cream)

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Another quote symbolizing the new India:
"India: From self-reliance to Reliance"

The Black Cloud

Over the last couple of days, I read science fiction after a very long gap. The book was Fred Hoyle's 1957 novel "The Black Cloud". It is good science and good fiction.

- The portrayal of the scientific and political establishment of the late 1950s - early 1960s is excellent. Particularly, in the aftermath of the atomic bomb, and the ongoing arms race, the societal responsibility of scientists is a central issue in the book.

- Another interesting aspect is the prescient description of the various uses a digital computer may be put to. Some of those such as speech recognition, voice synthesis, complex mathematical calculations, and so on have already become real.

- Its a quick read - the plot moves pretty fast, there are few important characters, which are reasonably well developed. The story does have a couple of twists, but does not indulge in any kind of sensational surprises.

- Its the first science fiction book I've read that actually contains derivatives and other mathematical notation to explain some calculations made by the characters. In fact, many scientific principles are discussed in way more detail than in most science fiction books.

- The portrayal of Britain's decaying power, and of the helplessness of non-industrialized nations is spot-on.

On the whole, a fun book to read.

Hazaaron Khwaishen Aisi

One of the most acclaimed Indian movies of 2005. I saw "Hazaaron... " on VCD. It is truly a different movie by most hindi movie standards. It stands out in many aspects, most importantly the top-notch performances in leading roles by Kay Kay Menon (who has recently begun to receive the attention his talent and screen presence demand), Shiny Ahuja (supremely confident in a terrific role) and Chitrangda Singh (wow! she sets the screen on fire!), and small but effective parts by other actors.

Hazaaron is set in the late 1960s through 1970s period in various North Indian locations. The director, Sudhir Mishra, truly brings this period to life. The language, clothes, and setting all seem very real. Neither is there any attempt to "glamorize" the past, as seen in the lavish sets in melodramas such as "Devdas" or "Parineeta" nor the big scale of the unknown past of 1857 as seen in "Mangal Pandey". The music, costumes, dialogue and situations are all straight out of the 1970s. More than anything else, the film succeeds in capturing the India of 1970s - full of uncertainty, youthful energy, and idealism.

The film is a series of really quick scenes - the story moves very fast, from Meerut to Delhi to rural Bihar, and from the late 1960s to the later period of emergency rule and naxalite movement. The quick cuts, and lack of "obvious" dialogue leaves a lot of room for interpretation, a valuable characteristic for a movie such as this. It is highly entertaining and provocative. Through each of the lead characters, and the different directions their intertwined lives take, we see various forces at work on the minds of young people in that period.

Hazaaron succeeds at two levels - in telling the story of its characters and in telling the story of that period. It is a classic love story, with true to life characters - each moving to their own rhythms, each dreaming their own dreams. This story is set against the backdrop of a nation in a period of turmoil. I was impressed by how the movie conveyed the essence of each character - how their thoughts and motivation leads to actions that may seem irrational to an outsider.

There are three central human characters in the story. Siddharth, Vikram and Geeta. They are all college students in an unnamed Delhi college.

The idealist Siddharth, a rich father's son, moved by leftist thought and the extreme divide amongst the haves and have-nots, decides to leave the pleasures of the city and his born with a silver spoon life for a stint in rural Bihar, joining similarly motivated young people in the naxalite movement. His revolutionary, non-compliant nature is conveyed through very simple things. He calls his father by the name Judgesaab, in a firm refusal of the personal relationship , preferring to stress the class divide between the masses of poor and the very few rich. In spite of all his revolutionary spirit, he cannot give up his love for Geeta, a college sweetheart, herself conflicted in many ways.

The pragmatic, go-getter Vikram, the son of a Gandhian is skeptical of Siddharth and his Marxist friends. He has keenly observed the corrupt bureucracy, sycophancy, and the way the world works. He believes in working for his own upliftment, whichever way possible. He succeeds in almost anything he tries - property deals, brokering agreements between government and businesses, and keeping politicians appeased. A true lobbyist, broker, a man seemingly with no ideals but his own gain. Yet, he is defeated in many ways - the idealistic Geeta, whom he loves, is in love with Siddharth; his Gandhian father, for whom he cares refuses his help, choosing to go to jail during the emergency. No matter how much money or power he earns, he cannot win the respect or love of those that matter to him.

And Geeta. She is torn between her love for Siddharth and a sincere desire to do something good, and her middle class fear or pragmatism on the other. Geeta is unsure of what her dreams really are. She drifts, she searches, she loses and then she wins. Geeta is the most fascinating character of the movie.

As the characters progress towards their future, we see India through their eyes. Geeta is most likely the character viewers will identify with - the many forces pulling her in many directions, all at once, a thousand desires unfulfilled. Yet, while the outwardly strong Siddharth and Vikram discover their failings, Geeta finds her strength. Many missteps along the way, but by the end of the story, Geeta is firmly set along a path that I believe will be hers throughout life. The changes are remarkable and very moving.

A truly amazing film, on many levels. I could probably write hazaaron more words, and yet not say enough!

The Argumentative Indian

Disclaimer: As an Indian, I have a stake in what the "Indian" character is perceived to be. In my own view, I regard it to be inclusive and broad-minded, open and welcoming to ideas, proud of its own heritage and respectful of others. Prof. Sen's book makes great arguments towards such a view. I must humbly admit that what is below are just the themes I discovered and thoughts I had upon reading the book. I do not consider myself qualified to comment on the book; rather I restrict to how it appealed to me.

The title itself is intriguing, characterizing an entire nation as "argumentative". The book is a superb ride through the history, culture, religion, philosophy and politics of the Indian subcontinent. The perspective is modern, and very strongly in support of India's pluralist tradition, tolerance and encouragement for heterodox views. Prof. Sen addresses the issue of India and Indianness using the cultural, religious, philosophic, and historical record of India in many ways. Importantly, from this record, he draws connections, shows parallels and provides context to a lot of contemporary questions about India. I see the book as a guide to Indianness, that focuses on a particular aspect of being Indian - the rich heritage of reasoning and argumentation about important questions. Prof. Sen explains the argumentative tradition well, and himself presents compelling arguments in the discussion of various current issues facing India, from the nuclear bomb to gross inequality.

The book is a collection of essays written over the past several years. The essays have been woven together in the book's theme. The four sections of the book, "Voice and Heterodoxy", "Culture and Communication", "Politics and Protest"and "Reason and Identity" are all based on Prof. Sen's many decades of research into these issues. Prof. Sen draws on results from his work in the economics of poverty, famines, and gender and class divisions. He uses a rich variety of documents, from religious texts such as the Vedas and Upanishads to modern Indian thought expressed in Tagore, Nehru and Gandhi's writings and Satyajit Ray's cinema. He relies on many foreign records of India in the past, such as those by Alberuni, Yi Jing and others. The arguments made by Prof. Sen are forceful yet put forth gently, with great care to respect a different point of view. He considers each narrow view carefully, and rejects it with great reasoninng.

Some of the important questions that Prof. Sen addresses include

• The historical record and present state of India's argumentative tradition. From the Vedas to the current democratic process, India's record of debate, dialog and discussion. How argumentation and reasoning is a truly indigenous tradition, not an influence of the west.
  
• The heterodoxy inherent in Hindu tradition. How does the concept of Hindutva being advanced by communal forces relate to Hinduism? In particular, how Hindutva restricts itself to a narrow, incomplete view of Hinduism, belittling a great tradition.
  
• India's global connections. How does (and should) India relate to the world - in the past and the present.
  
• The Indian identity. How do religion, class, caste, language and other factors relate to beind Indian. How is identity "defined", not "discovered" by an individual, and why it matters.
• Mistaken perceptions. How the western perception of India as a "mystical land of spirituality" is mistaken, in view of India's achievements in philosophy, science and literature. How do Indians' perceive India, and how that perception is influenced by Western beliefs.
  

This book is great reading for anyone with an interest in India. I believe it is required reading to understand being Indian.