Field of Schemes?

Lalit Modi created a hugely successful cricket league, but corruption charges may undo him

By Elliot Hannon / New Delhi Monday, May 31, 2010
    • Ritam Banerjsee / Getty Images

    Lalit Modi

    In professional sports, the off-season isn't supposed to make headlines. When India's fledgling professional cricket league, the Indian Premier League (IPL), ended its season in late April, however, the championship match won by the Chennai Super Kings felt more like a prelude than a grand finale. Sensational tales of corruption among the country's wealthiest and most powerful — the very franchise owners who had made the IPL "the world's hottest sports league" — had shifted the focus from the field to a looming boardroom war over the league's survival.

    The intrigue is wrapped up in the fate of the league's founder and chief architect, Lalit Modi. Throughout India, Modi, a member of a powerful Indian family, is both a revered and a reviled figure. The brash businessman's ambition hoisted the IPL into existence, but his impatient bravado has run afoul of India's most entrenched hierarchical reflexes, making him many powerful enemies.

    In April, Modi was suspended as head of the IPL by the Board of Control for Cricket in India following accusations of financial irregularities. He went into immediate exile to build his defense, leaving behind a whirlwind of mystery. Accusations ranged from the serious, like the rigged sale of franchises, to the surreal and implicated every corner of the country's elite. Allegations of political meddling have already forced the resignation of the Deputy Foreign Minister. Stories of league owners' using political clout to bump passengers off commercial flights in order to ferry the wealthy and well connected to IPL matches touched a nerve and sent India's politicians running for cover.

    Until the scandal, the IPL had struck gold with its alluring mix of India's two greatest passions — cricket on the pitch and Bollywood intrigue in the owner's box. Modi assembled the league in just over six months, selling eight franchises for almost $725 million and inking a billion-dollar TV deal along the way. That's a startling achievement in India, given that country's famously inert bureaucracy.

    In its inaugural season, the IPL proved to be not only wildly popular but also big business, generating some $300 million in revenue. To make the game attractive to the casual fan — particularly women and families — and more TV-friendly, the IPL adopted a new, abbreviated form of the sport, in which matches lasted just three hours and were moved from the afternoon to a nightly prime-time slot to entice advertisers looking to court India's growing middle class. Modi beamed the games live to movie theaters around the country, charging a fraction of the cost of a match ticket. The IPL also extended its distribution to the Net, signing a landmark deal with Google earlier this year to broadcast IPL games on YouTube, the first sporting event to be streamed live by Google. The IPL channel soon became the most viewed sports channel on YouTube, with almost 55 million hits.

    The problems erupted when the IPL awarded the state of Kerala one of two expansion franchises for just over $333 million, a relatively astonishing sum given the league's age. India's Deputy Foreign Minister — who had served as an adviser to the winning investment team — quit after it was revealed that his frequent companion had received a "sweat equity" share of the new club valued at more than $15 million.

    Modi's freewheeling, at times autocratic style also led some to wonder just how the deals got done. The BCCI has charged Modi with abusing his power when selling the league's online rights to a company in which his son-in-law is an investor and unilaterally renegotiating the IPL's broadcasting contract. Despite wide-ranging valuations of the IPL — some of which reach $4 billion — it remains unclear just how profitable the teams are.

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