IPL Structuring

I remember that this time, last year, I was eagerly looking forward to the IPL auctions. It also happened to be a time when I was actively looking out for a new job (i wasn’t going to find one till about six months later). And I was secretly hoping that one of the IPL franchises would employ me as a game theory and structuring consultant in order to help them out with the player auctions. While I tracked it online, I imagined myself sitting in the bidding room at the Trident, showing my excel sheet to the franchise owner and captain, and watch Preity Zinta enhance her Mata Amrita Index.

It was also a period of extreme NED, due to which i didn’t bother looking out actively to try consult for an IPL franchise. It was a period of low confidence, so I assumed I wasn’t good enough for this kind of work, and didnt’ bother doing anything in this direction. Frankly, I didn’t have a clue how to proceed, else i might have put SOME effort at least. A few months later, when the IPL was well underway, I figured out that one of my cousins is a big shot with Bangalore Royal Challengers, and he was among the people at the Trident who picked the Test XI to represent BRC. I wanted to kick myself, but for some reason I didn’t.

Currently, I’m comfortably employed, and so far have been happy with this job. Else I might have wanted to throw my hat into the ring. Once again, IPL team formation season is on. A few transfers have gone through already, and a few are currently in limbo. Bidding will happen next season for people who are joining the league this year. It promises to be an interesting time. And so far I’ve been deeply unhappy with the way the franchises are going about their business.

I’m especially upset with BRC, and have half a mind to call up my cousin who consults for them and give him a piece of my mind. How the hell could they let go of Zaheer Khan in exchage for Robin Uthappa? Yes, the latter is from Bangalore, and has that local pull factor. He has batted quite well this Ranji, though not anywhere close to what he played like 2 seasons back when he topped the batting charts. But he is supposed to be paid twice of what Zaheer was being paid! Is he really worth that much? I’m sure that BRC missed a trick here. I’m sure that had the BRC asked for a fee from Mumbai Indians in order to release Zaheer in exchange for Uthappa, the Indians would’ve definitely paid up. When Chelski can reportedly offer Anelka, Malouda, Alex and 15 million pounds in exchange for Robinho, Mumbai could definitely part with Uthappa and maybe a million dollars in exchange for Zaheer.

There were rumours of the Mumbai Indians negotiating a swap with Kings XI Punjab for a swap between Powar and Harbhajan, which reportedly got stalled because Harbhajan earns so much more than Powar. Once again, what if the Mumbai Indians paid a fee along with Harbhajan for Powar? I know it is ridiculous that Powar is worth Harbhajan plus a fee, but given their disparity in income, this is the only way that this deal is possible. And I’m sure that there is a particular fee, which if paid along with Harbhajan in exchange for Powar, will leave all the interested parties (Punjab, Mumbai, Harbhajan, Powar) better off. It seems like people are too lazy to find it.

The opportunities like this are endless. All that the franchises need is someone who has sufficient knowledge of game theory, coase theorem, a decent knowledge of cricket (interest in domestic cricket is a desirable quality) and who understands how to structure deals. I don’t know if franchises have already recruited such people but if they haven’t, they should try and recruit. The most obvious choice of person that I can think of who possesses all the above skills (including interest in domestic cricket) is me. Unlike last year, I’m not in the job market right now, but don’t mind doing some part-time stuff. I may not get paid, but I’m willing to work for a few IPL tickets and maybe invites to some parties with cricketers.

I’m also wondering if cricketers’ pay will go down starting the 2011 season onwards. The IPL auctions happened just before the downturn was to begin, and I’m sure that franchises have overpaid for most players. Since players have all signed three year contracts, their pay till the 2010 season is safe. Beyond that, I’m not sure if franchises will offer them fresh contracts at higher or equal salaries.

It would also be interesting to see if some version of the Bosman ruling is to operate in the IPL. We can only wait and see.

10 thoughts on “IPL Structuring”

  1. Few questions dude-

    1. How did these franchises go about recruiting? I’m guessing they hired people with work-ex,so what industries did they look at?

    2. The IPL off season is a lot longer than conventional leagues (its a 6 week league whereas other leagues only have a 6 week break), so what do these consultants do in the off season?

    “There were rumours of the Mumbai Indians negotiating a swap with Kings XI Punjab for a swap between Powar and Harbhajan, which reportedly got stalled because Harbhajan earns so much more than Powar.”

    3. Is this because they felt Bhajji wasn’t worth it or because they have some restriction on how much they can spend on the entire squad? Rumour has it Bhajji isn’t too happy with the setup at MI,so is there any scope for Punjab to take advantage of this and negotiate a new contract with him for the remaining two seasons?

    4.”It would also be interesting to see if some version of the Bosman ruling is to operate in the IPL”

    I thought the current contracts are null and void at the end of the third season. Unless there’s a first right to refusal clause somewhere in the contract.

    5.”I’m sure that had the BRC asked for a fee from Mumbai Indians in order to release Zaheer in exchange for Uthappa, the Indians would’ve definitely paid up.”

    Is there a provision for that in the current rulebook? So using the football funda, Zak would have got 10% of the transfer fee.

  2. It was a win-win for MI as they want someone to replace Polly. Zak was a great deal for them given that he plays for Mumbai and has a great rapport with Sachin. Among all the IPL teams, I think they got the best performances from the local boys (kulkarni, nayar and even their wicket keeper in couple of matches). I think MI will try to snap up Duminy. He doesn’t have much star power, but he can give solidity to the middle order, win a few matches on his own and save MI a few bucks. He would also be available for the entire season.

    I think BRC’s strategy has been bad right from the start. They might want to look at selling Kallis with some extra money (just like the bhajji-powar swap u talked about). Even otherwise, if they buy KP, the quota of 4 foreign players would be taken by Ross Taylor, KP, Bracken and Steyn/Boucher. Kallis would again be the costliest bench warmer who would play in the absence of other foreign players.

    I think they are counting on Nathan Bracken to deliver for them this time around. While he may not be as incisive as Zak, he is very economical and too good at the death.

    1. it was definitely a win for MI.
      but it wasn’t a win for BRC. to give up zaheer for uthappa (remember uthappa gets paid wtice as much as zaheer)

      so it’s win-loss. not win-win. win-win woudl’ve happened at a nonzero fee

    1. let’s see. rumours are that they’re going to go mad for pietersen. i’m not sure it’s such a good strategy.

      1. I totally agree. BRC might overspend if they get KP. But I wanted to figure out which IPL teams will gun for KP? The ones that are low on batting firepower – and going by last season’s performance, the ones that struggled to get big scores in the 20 overs were BRC and MI.
        DC also struggled but it had a very poor bowling attack and its batting was quite good. Especially Gilly and Rohit. I trust them to do well with a reliable buy like Voges. Someone who will score runs consistently without being too flashy. They certainly wont gun for KP.
        Royals are a strong candidate to snare KP from Mallya given the obvious Warne-KP connection and I also believe they might need KP to shore up the middle order. If you remember, last season they had SOLID starts from Smith, Asnodkar, Pathan and Akmal but they missed a good number 4. Jadeja and Niraj Patel are not good enough to play at 4. I think KP should be a good fit at Royals as well.
        Given this rationale – I expect strong bids from MI, Royals and BRC. I think Royals might get outbid by BRC given Mallya’s risk appetite. I think MI might transform into a powerhouse more than BRC if they get KP. It depends where they set their upper limit. BRC even if they get KP might not be the team to beat.

        1. overall the auction seems quite crazy. 600m for Mortaza, and no takers for Jerome Taylor and Shakib is really funny. None of these buggers bidding know anything about cricket, I thinkm=

        2. overall the auction seems quite crazy. 600m for Mortaza, and no takers for Jerome Taylor and Shakib is really funny. None of these buggers bidding know anything about cricket, I think

  3. I think BRC were clearly gunning for KP right from the beginning. And Mallya was gonna snare him up at any cost. In a way, a good ploy cos he’ll get a captain material in KP as well. Swapping Zaheer is a big mistake, though Uthappa is a good addition to the team. BRC is losing out on a good bowler. Wonder who they’ll get to fill in for him, cos Mallya hasn’t bought any quality bowler. I am happy atleast that Mallya didn’t waste money like KKR… 12times the reserve price for a ok-ok bowler… Atrocious

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