NEW DELHI (Reuters) – With its cocktail of celebrities and cheerleaders, the Indian Premier League’s dizzy rise to become cricket’s richest tournament is under threat, illustrating how politics and business don’t mix.
A scandal over a government junior minister accused of influencing a bid for a team has sparked a tax investigation into the estimated $4.1 billion sport franchise, also signalling the inherent risks in the Asian giant’s corporate juggernaut.
It is a scandal that touches much of India, including some of Bollywood’s top stars who became team owners, senior politicians as well as some of India’s richest executives who have all wanted a piece of the pie since the tournament kicked off in 2008.
“Like much of corporate India, the attitude behind IPL was with globalisation, liberalisation, we can take on the world,” said Paranjoy Guha Thakurta, a well-known commentator in India.
“But the IPL has not been transparent. It has become big business, but a rather murky big business … and shown the very cosy ties between very rich businessmen and politicians.”
Lalit Modi, a 46-year-old businessmen known for his flashy suits and love of the high flying celebrity circuit, formed IPL in 2008, a short form of cricket that won millions of dollars in advertising and upset much of the traditional cricket world.
It was a by-product of an emerging India, when local companies like Tata bought brands like Jaguar and Land Rover for $2.3 billion to reflect the self-confidence of Indian business as it enjoyed one of the world’s fasted economic growth rates.
Such was IPL’s success that some team franchises were sold for more than the value of English Premier League football teams.
The tax probe has so far revealed nothing but huge newspaper headlines, and Modi says he has nothing to hide as taxmen visit offices around the country with cameras and lights in tail.
But whatever the results of the investigation, few in Indian believe the tournament will be the same freewheeling business extravaganza, and Modi is now under pressure to resign.
AT THE CUTTING EDGE
The IPL was at the cutting edge of cricket from day one when its use of cheerleaders sparked initial outcry as conservative India questioned whether it was ready for dancers with bulging breasts and gyrating bellies parading in packed stadia.
Modi himself called it all “cricketainment” — with Bollywood stars watching matches in seats costing as much as $1,000 a game in a country where half the population earns less that $2 a day.
“IPL can be seen as a metaphor for the new Indian middle class which thrives on excess,” wrote commentator Ronojoy Sen in the Times of India.
Modi showed that “Can Do” attitude on which Indian business people pride themselves — the ability to deal with the country’s notorious red tape, corruption and poor infrastructure.
When security concerns and a general election threatened the second year of the tournament, Modi simply transferred the whole event to South Africa in a few weeks.
“Forget Modi’s brashness for a moment. There is an underlying admiration for Modi in India — the fact that he could get through the red tape and get things done,” said V Ravichandar, managing director of Feedback consulting in Bangalore, which advises multinationals on doing business in India.
“That kind of thing goes down well in the Indian street.”
But any admiration may not save the IPL.
After Modi tweeted questioning the role of Junior Foreign Minister Shashi Tharoor in a team’s $333 million bid, the minister was forced to resign.
India’s tax department suddenly announced a probe into Modi and the IPL — in what many saw in India as a blatant use by the government of tax authorities to win political points.
The political ramifications widened.
Suddenly key Congress party coalition ally and farm minister Sharad Pawar was on a collision course with his own government after he infuriated Congress by initially supporting Modi.
Pawar is president elect of the International Cricket Council and former head of the Indian cricket board — just one of many many politicians in India who also run cricket boards.
The tension came just as the government was seeking to secure its allies support for a possible vote in parliament over high food prices. The government would fall if it loses the vote.
Few think the government will fall. But the fact that a tweet from a businessman sparked worries about the government’s coalition strength a few days later showed the nexus between business and politics in India — and the fragility of both.
“The IPL was about getting things done despite everything,” said Ravichandar. “It is a spirit of Indian enterprise with all the risks that it entails that holds a mirror to ourselves.”
