There is too much money to handle in cricket

In a chat with this writer during his recent visit to New Delhi, International Cricket Council president Malcolm Gray made a pertinent point on the problems faced by most cricket boards. He was bang on target, but in a whispering tone, remarked that there was a huge inflow of money into sport and in some places the sports administrators haven''t had the experience or the expertise to handle the gush.
The only way you can promote the new-found cash-crop, according to Gray, is to have a high level of professionalism in terms of management in the governance of sport. Perhaps, India was one of the countries he had in mind when he talked of professionalising the board''s functioning as much of the money flows into the game from here.
Lo and behold, within a couple of weeks of his profound words, the income-tax authorities shot off a demand notice to the cricket board for Rs 10 crore on its receipts of over Rs 50 crore and an estimated profit of Rs 26 crore for 1997-98. The board has initiated the long process of questioning the veracity of the I-T department''s conclusions and promising to go in an appeal against slapping such a huge amount as tax. It''s typical of the board run by some big time and some small time businessmen, traders and middlemen.
This gush of money, which Gray says the administrators have not been able to grapple with, began to overflow the board''s coffers only from early 90s when that ingenious duo of Inderjit Singh Bindra and Jagmohan Dalmiya discovered the golden goose in the shape of television rights money. When they took over the board in a bloodless coup what with Madhavrao Scindia showing little interest in propping up the group that put him in the saddle, the board had a deficit of Rs 80 lakhs.
As a populist measure, there had been a fee hike across the board from Test cricketers down to the Ranji Trophy players, taking the deficit to Rs 1.20 crore. Such was their acumen that the Bindra-Dalmiya combine turned the deficit into surplus in their very first year. They ended up with a surplus of Rs 75 lakhs.
It was all hunky-dory and here the problem of riches started to pose major problems for the board. They represented to the I-T authorities for tax exemption on their income, arguing that almost all of it was being ploughed back into the game. Such was their clout that the tax exemption was easy in coming. Under clause 10 (23) of the I-T regulations, the board has to spend 75 per cent of its earnings, and if it can''t do that then it has to earmark for some future expenses, but the amount must be spent within ten years.
The period has now been reduced to five years. In the first flush of money the board spent 85 percent of its gross earnings in 1993-94 and as more and more money started pouring in, the board started creating more and more reserve funds, like the benevolent fund for players, something akin to PF, DDCA Reserve Fund, Lata Mangeshkar Night Fund for the money her concert raised after India''s World Cup victory and newer ones like Grounds and Pitches Committee Fund, Infrastructure Reserve Fund, Board Headquarters Reserve Fund, and National and Zonal Cricket Academy Funds.
From the Lata Fund, Rs 16 lakhs have been paid to the players and the manager of the World Cup-winning squad. Obviously, with the increase in the receipts, the board is faced with a peculiar situation. Earning over Rs 100 crores a year, depending on the calendar, the board put a lot of money in the infrastructure fund, raising the subsidy from Rs 1 crore to Rs 2 crore for improving playing facilities.
Since not many state associations have their own grounds or stadiums, the expenditure has become difficult to explain. Moreover, the subsidy has become a tool in the hands of the strongmen of the board to arm-twist officials of state units to toe their line. However, some state associations have genuinely spent the money on improving the facilities at their grounds.
The I-T slap comes at a time when board president A C Muthiah has started initiating steps to spend the money for setting up the NCA and the five zonal academies. Though he has been hamstrung as far as professionalising the board is concerned because of the stonewalling by some of the so-called honorary officials who don''t want their positions to become redundant, Muthiah seems hell-bent on going ahead and appointing experts to do the job.
The Indian board is perhaps the only one not to have a CEO. A section of the board members argue that the honorary officials are saving the board a huge amount that it would have spent on professionals.
Treasurer Kishore Rungta says that the administrative expenditure of the board works out to a mere two percent of its income and that''s chicken feed compared with any other corporate house whose overheads run into high double digits. Whatever the argument, the board must improve playing conditions at major centres, otherwise you''ll have to hang your heads in shame with Margao. The list is long.