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Implications of sports laws in India

September 01, 2021
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Sports law

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This article is written by Miss Srestha Nandy, from IMS UNISON UNIVERSITY, Dehradun. This is an exhaustive article which deals with the laws regarding sports in India.

Introduction

Sports manifests a sense of belongingness and national pride, it also establishes loyalty in people. Sports also have an impact on different fields such as aiding with the promotion of different brands. Considering specifically the health of the individuals, sports play an important role in achieving maximum fitness. Apart from these, it also generates income for the country. At present, India is also engaged with international events and leagues. But even after having so many positive prospects, India lacks definite legislation for the arena of sports. But this does not mean Indians do not hold sporting events or participate in them at the international levels. Our Constitution possesses various definite legal bodies that aid sports and helps India to grow more in the field of sports.     

Defining sports law 

In simpler words, sports law is nothing but the application of general laws in the field of sports. The term ‘sports law’ signifies the rules related to the association or the disputes that occur during the games. Other than this, sports law includes the context of anti-doping and player transfers specifically in the football industry. One of the major grounds is the laws associated with the broadcasting of the event. Even the intellectual property rights cannot be excluded in this regard as, during any sponsorship transaction, the use of a trademark arrives on sports. In general, there is no specific context under sports law. Due to this, there is no existence of a definite body or specific legislation to govern the sports industry under state or central government. But the Ministry of Youth Affairs and Sports coordinates the working of various stakeholders or key players engaged with this field. There are many autonomous bodies for dealing with the administration of sports. These include Sports Authority in India (SAI), Indian Olympic Association (IOA), Hockey India (HI), Board of Control for Cricket in India (BCCI)

Which laws make up the compendium of sports law

Sports is principally associated with games whether it be indoor or outdoor. But when competitions are considered it occurs at national and international levels where the national and international law prevails. As the same law cannot be implemented at all the places in the same manner. So to this aspect, there is no single definite body that can be specifically identified as sports law, but the various existing laws aid the sports law. 

Contract Law

The Indian Contract Act 1872  plays a major role in the case of sports events. Here the contracts or the lawful agreements are expressed which are legal and binding by law. Contract related grounds include the following:

Sponsorship rights  

In this, the contract exists between the partners where one party enjoys the financial benefit whereas the other party in return gets advertised. As in the IPL of 2021 Puma was the official kit partner of Royal Challengers Bangalore.

Endorsement contract  

These are independent contracts where there is no requirement of the employee-employer relationship. For example, there is an endorsement deal between Cristiano Ronaldo and Nike for the lifetime where the starting year of the contract was in 2003. Under endorsement, the organization builds direct relationships with the players. The positive aspect of this is that the promotion of the product is being done by the well-known athlete especially to the fans which in return aids the organization in sales and production. 

Appearance contracts  

This contract is only for the appearance of the athletes in a public reception, sports camp, or any tournament. Here the athlete is paid for visiting. 

Broadcasting rights  

Many individual organizations team up for the broadcasting of the sport or the premiere. Broadcasting parties like Nimbus sports broadcast, ESPN star sports, Zee networks, Ten Sports, etc. make a deal in the form of contracts which include the terms and conditions of the media rights for broadcasting.   

Antitrust and Labour Law 

Antitrust laws are also known as competition laws. This law protects the consumers from predatory business practices and ensures the existence of fair competition in the open market. As majorly the sports are associated with non-profit organizations, so the antitrust laws apply to them. As negotiation and bargaining have always been a part while making any contract between the parties. Professional sports leagues are unincorporated associations owned by independent organizations, so they are fully capable of contracting and conspiring to restrain trade through concerted actions. They do enter contracts that include restrictions on salaries, joint broadcast deals, etc. So to prevent all this unfairness the Sherman Antitrust Act of 1890 was passed in the United States. Similar to this in India the application of Competition law is carried. 

In simple terms, the labor laws are in the disguise of employment laws in the field of sports where the individuals are professional players. Even practices like collective bargaining, lockouts do exist in the arena of professional sport. In early times players need to raise their voices for getting the facilities like health benefits, pensions, minimum salaries, etc. due to the lack of a distinct government body to regulate the sports affairs. Significantly in the arena of professional sports, the players share an employee relationship with the management authority, so there arise conflicts in the aspects of earning and privileges. 

Law of Torts

Due to the occurring outbreaks of violence during professional sports events, the law of torts lays its implications on this. For example the criminal charges against Todd Bertuzzi where a civil suit was filed against him. Hereunder the legal framework of law of torts, the defendant owes a duty to care for the plaintiff where the victim has the right to seek compensation for the injury sustained. 

Tort law can be applied based on three main categories:

Negligence

This signifies the failure to exercise the care taken which is a duty of the individual, who should be concerned while performing acts that may result in accidents in the full spirit of a game without any vengeance. 

Civil assault

It is to some extent similar to that of criminal assault, which consists of the use of threat or force against another person. This differs from negligence on the ground of intention where the former is intentional and the latter possesses intention.  

Recklessness

This aspect lies in between negligence and civil assault. The conduct of recklessness includes the degree of foreseeability of harm.  

Intellectual Property Law 

Intellectual Property rights have a broad aspect in the field of sports. The commercialization of sport is aided by the protection provided by the various intellectual property rights, such as copyright, trademark, patent laws. As there are numerous sponsorships during an event, here the provisions of the Copyright Act,1957  protect the artwork engaged with logo, slogan trademarks, etc. In case of infringements, civil remedies are available under Section 55 of the Act which can be availed by any of the ways of injunction, damages, accounts, based on or otherwise can be conferred by the law. Also, the criminal remedies are included under Section 63 of the Act which states the punishment for the cognizable offences.  

Tax Law

Sporting events are principally a test of skill and strength but at present, it has also become a business and significant inflow of capital, as a tremendous amount of money is involved in sponsorships, broadcasting, etc. so this generates a significant increase in income and awareness. Section 115BBA of Income Tax Act 1961 provides a clause which states that any NRI or non-citizen of India participates in any games or contributes through advertisements, then 20% with surges will be charged on ones’ income. But it is also provided under Section 195EE of the Income Tax Act 1961 that in case the annual income is less than Rupees 2500 of the concerned being referred under Section 155BBA of the Act then no deductions will be made. 

In the case of Mahalakshmi Cultural Association vs. The Commissioner of Police & Ors. (2016) Supreme Court recognized that skilled-based games are to be considered for taxation, and it will also be the duty of the winner to pay the tax. In case the person wins an amount above rupees 10,000 then 30% tax will be charged upon it. With the gaining popularity of Sports in India, Foreign Direct Investment has also got raised, and even India got exposure to international sporting events. Also regarding sports accessories, a rate of 12% GST is charged, whereas 28% is imposed on physical fitness, gymnastic, and athletic goods, resulting in the growth of the economy. 

What are the major shortcomings of the current administration of sports in India

Corruption and mismanagement of sports authorities 

The Sports Authority of India (SAI) was charged with corruption charges by the Central Bureau of Investigation (CBI) as four officials from the administrative wing got suspended on the grounds of demanding a 3% cut to clear a transport bill of Rs. 19 lakh. This proves the current corruption scenario of India. In an interview where the former Chief Justice of the Supreme Court, Rajendra Mal Lodha stated that the Board of Control for Cricket in India (BCCI) has been a victim of corruption, nepotism, non-accountability, non-transparency, unlimited discretionary powers to the administrators, and mismanagement of revenue and financial matters. As India is a vast country and different sectors have different types of sports, so each of these receives funds, but the problem lies in the management and distribution due to the lack of a proper system to monitor the misuse and mismanagement. Even he mentioned that there is a need for a prominent body to monitor the issues of sports, due to the lack of distinct authority the issues are taken to courts where the existing laws are not implemented properly and in many cases remains pending where sometimes solutions are granted. 

Lack of funds 

The Central government allocated Rs. 2,596.14 crore in the Union Budget for 2021-22 which is 8.16% less than the allocation of the previous year, this is due to the spread of COVID -19. Also, the financial allocation of the Khelo India Programme got reduced to Rs. 657.71 crore which was previously Rs. 890.42 crore. The incentives of the sportspersons got reduced to Rs 53 crore from Rs 70 crore. The allocation for Commonwealth Games-SAI has slashed to Rs. 30 crore which was previously Rs. 75 crore in the last year. The budget got halved to Rs. 25 crore for the National Sports Development Fund. Also due to the pandemic, the development of the infrastructure and up-gradation of stadiums got postponed due to a shortage of resources. 

Conclusion

So these were the existing laws that aid the sports legal framework in India. But all these are not enough, as the recent cases of corruption or lack of funds leading to poor infrastructure are the evidence for the urgent need for a prominent legislative body to control and coordinate the activities in the field of sports. There the separate departments could take the charge of specific functionings and modify the unlimited discretionary powers which were given to the administration. A definite system for financial matters should be made to monitor the funds and flow of monetary transactions, salaries to the professionals without curbing the privileges that one deserves, preventing the misuse, etc. It is the responsibility of the management to develop an effective infrastructure and update it from time to time and in case of unfair practices, proper measures should be taken and reports should be communicated to the authorities so that actions can be taken and law and order can be maintained.  

References


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