Associate, GameChanger Law Advisors
Associate, GameChanger Law Advisors
The Board of Control for Cricket in India (BCCI) just held its first ever auction for the Women’s Premier League (WPL) which resulted in contracts being secured for 87 cricketers within the WPL franchise teams. This inaugural WPL auction racked up Rs. 59.5 crores towards the security of such 87 contracts, and promises better commercial revenue for women cricketers.
This short explainer briefly describes how BCCI looks at such player auctions and player contracts, and the law applicable to the same.
BCCI Player Auctions: A Legal Outlook
The general principle of the auction process is that each franchise team is allotted a budget of Rs. 12 crores and may bid for specific players at their pre-set base price fixed at Rs. 10 lakhs, Rs. 20 lakhs, Rs. 30 lakhs, Rs. 40 lakhs or Rs. 50 lakhs. And similar to all auctions, the highest bidding team secures a right to field a particular player for the season. Moreover, BCCI may have communicated additional conditions to the WPL teams.
However, apart from the general principles, certain questions remain from a legal perspective relating to the execution of player contracts upon conclusion of the auction. These include questions such as:
(a) When is a player contract concluded? Is it at the time of a successful bid or after the auction, OR is there a in-principle agreement/memorandum/letter of intent signed by the player prior to the auction, with only the price to be inserted after the auction?;
(b) Who concludes such a contract with the player? Is it BCCI or the franchise team? and
(c) Will a successful bid at such auction compel the conclusion of a player contract? Or is it open to a player to refuse to enter into the player contract?
Documentation related to the Indian Premier League, 2022, as made publicly available by the Bihar Cricket Association, gives us a hint to the above questions.
At the first stage of an auction related transaction, each player is mandated to enter into a Player Auction Agreement with the BCCI, prior to the auction. Such Player Auction Agreement is a contract between BCCI and the player, whereby such player undertakes to enter into a player contract with the franchise team (should any franchise team purchase them). In other words, there are two contracts executed for each player who forms part of the auction pool, namely:
i. A Player Auction Agreement between BCCI and the player, executed prior to the auction, which is a pre-cursor to the final Player Contract; and
ii. A contract executed after the auction to which the franchise team and the player are parties to (“Player Contract”), where a player is contracted to play with the said team during the season.
Hence, in specific answer to questions (a) and (b) above, a Player Contract between the franchise team and the player is concluded only after the successful bid of the player and conclusion of the auction.
As for question (c), from a reading of the Player Auction Agreement, and as mentioned above, under the Player Auction Agreement, a player undertakes to enter into a contract with a franchise team that has successfully bid for such player. If a player chooses to not sign the Player Contract with the successful bidder franchise, then such player could be liable for breach of the Player Auction Agreement.
If a player has entered into a Player Auction Agreement and has successfully been bought by a franchise team at the auction, then a successful bid at such auction could consequently compel the conclusion of a Player Contract. However, it is not publicly known whether there exists a corresponding obligation imposed by BCCI on the franchise teams (which are a party to the Player Contracts) obligating the franchisee who has won a bid for the player to conclude the Player Contract.
Legal Framework for player auctions
Player auctions are primarily governed by the following:
i. Institutional auction rules applicable to the franchise team and the player, as issued by the relevant sporting institution (BCCI, in this case), wherein the franchise team may be restricted to a maximum number of bids per player, or other such rules in relation to budget allocation and the composition of each team.
ii. Indian Contract Act, 1872, as applicable to every agreement entered into amongst the players, BCCI and the franchise teams, including the Player Auction Agreement and the Player Contract. The conditions for a contract, including ability to execute contracts (which may be relevant to any players who are minors), consent, etc. would apply to every contractual arrangement.
The Authors would like to thank Samheeta Rao (Senior Partner, GameChanger Law Advisors) for her inputs.
Disclaimer: This post has been prepared for informational purposes only. The information / or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.
Click here to know more about our Sports & Gaming practice.