ipl – Pertinent Observations

Water, IPL and the ease of doing business

The latest controversy surrounding the just-about-to-start ninth edition of the IPL (a court case challenging its staging in Maharashtra while farmers are dying in Vidarbha) is a clear illustration of why the ease of doing business in India doesn’t look like it will improve.

At the bottom of it, the IPL is a business, with the IPL and teams having invested heavily in team building and marketing and infrastructure. They have made these investments so far hoping to recover them through the tournament, by way of television rights, gate receipts, etc.

Now if the courts were to suddenly decide that the IPL should not take place in Maharashtra, it will mean that alternate arrangements will have to be found in terms of venues and logistics, teams which have prepared grounds in Nagpur, Pune and Mumbai will have to recalibrate strategies, and most importantly, the people of these cities who have bought tickets (they clearly believe that the value of these tickets is higher than the price) will also end up losing.

Farmers dying for lack of water is a real, and emotive, issue. Yet, to go after a high-profile event such as the IPL while not taking other simpler measures to curb fresh water wastage is a knee-jerk reaction which will at best have optical effects, while curbing the ability of businesspersons to conduct legitimate business.

There has been much talk about how policy measures such as the retrospective taxation on Vodafone or Cairn have been detrimental to investor sentiment and curbed fresh investments in India. This court case against the IPL days before it began is no different, and a strong signal that India’s policy uncertainty is not going away quickly.

Unless the political class manages to fix this, and provide businesses more stable environments to operate in, it is unlikely we’ll see significant increase in investments into India.

Super-specialisation in cricket

Cricket has always been a reasonably specialised sport. You are either a batsman or a bowler or a wicketkeeper or an all-rounder. If you’re a bowler, you’re classified based on your bowling arm and the speed at which you bowl and the spin you impart the ball (last two are not independent). If you’re a batsman you’re classified based on your batting stance and whether you’re an opener or a middle-order batsman.

In Test cricket, there’s further specialisation if you’re a middle-order batsman. You have specialist Number Threes, like Rahul Dravid or Ricky Ponting. You have specialist Number Fours, like Sachin Tendulkar or Younis Khan. Five and six are fungible, but a required ability for both these positions is the ability to bat with the tail.

In One Day cricket, too, there’s some degree of specialisation within the middle order but it’s not to the same extent as in Test Cricket. In One Day cricket, batting orders are more flexible and situation-based. You do have specialist threes (Dravid and Ponting again come to mind) and sixes (usually hitters) but the super-specialisation is not as much as in Test Cricket.

A logical extension of this would be that in T20 cricket, which is played over an even shorter duration and where batting orders are even more flexible, you don’t need even as much of specialisation as in ODIs. However, Siddharth Monga argues in this piece that this lack of specialisation is why India isn’t doing as well as it could in T20s (having just lost the home series to South Africa).

In other words, what Monga is arguing is that Kohli, Raina and Sharma are all similar batsmen and effectively Number Threes for their IPL franchises, and when they are arranged 2-4 or 3-5 in the Indian national team, two of them are effectively batting out of position.

It would be interesting if Monga is indeed right and that T20s require a higher degree of specialisation than ODIs. It is also interesting that India’s number 6, MS Dhoni, bats like a typical number 5 in T20s, accumulating for a while before going bonkers. Maybe T20 will end up as a much more specialised sport than Tests? That would be interesting to watch.

Was the RR-CSK match on 12 May 2013 fixed?

The Justice Mudgal committee which looked into possible corruption in the Indian Premier League has mentioned that the game between Rajasthan Royals and Chennai Super Kings played in Jaipur on the 12th of May 2013 was possibly fixed. CSK, batting first, were 83 without loss in 11 overs, at which point their “mascot” (let’s call him that since his official status is unclear) Gurunath Meiyappan allegedly said that the team was unlikely to score over 140 (refer to the video with Gaurav Kalra and Sharda Ugra on Cricinfo). The team finished on 141, with Dwayne Bravo finishing with a quick 23 in 11 balls.

I have an algorithm similar to the WASP algorithm used in the recent New Zealand-India ODI series which I use to evaluate player performances in each game. For this particular game, the following table shows the batting ratings (according to this algorithm) for various players.

You can notice that apart from Dwayne Bravo, all batsmen from Chennai Super Kings (look at the batting column) had a negative rating. The two players with the most negative batting ratings, you can see, are Ravindra Jadeja and M Vijay. The question is which of these two was more culpable for the innings slowdown in the latter half.

Our algorithm allows us to analyze performances in parts of innings, so let us break down the innings into two – before Mike Hussey got out (on 11.3 overs) and after. When did Vijay collect his -10 score?

Vijay started slowly, getting to a cumulative -5.3 after four overs. Then, starting in the sixth over he started hitting out. By the time Hussey got out in the twelfth over, he was at 10.17. Raina and Dhoni both perished in the 13th over. At the end of that, Vijay was at a still respectable 8.49 (the wickets falling having evidently slowed him down). And then Ravindra Jadeja walked in.

For the next four overs, when Vijay was at the crease, he diminished his team’s chances of winning by 8%, 4.5%, 5.6% and 1% respectively (total of 19%). He then got out, and Bravo came in to make amends and take the team to 141. What of Jadeja?

It is interesting to note that Jadeja held steady while Vijay was slowing things down (overs 13 to 17), but once Vijay got out, he had two massively horrible 18th and 20th overs (he didn’t get to bat in the 19th, when Bravo took all the strike!).

Was it the handiwork of some particular bowler that Jadeja was quietened in overs 18 and 20? No! The following graph shows the over-wise performance of Chennai Super Kings (a negative number means Rajasthan Royals got the upper hand in that over). Colour of the bars vary by bowler. No one bowler did superlatively well for RR.

The negatives in the 12th and 13th overs are on accounts of wickets falling. And then there is a series of negatives, with Vijay and Jadeja batting. Then Bravo comes in, gets himself a positive, but Jadeja continues to get really negative. And it’s not really one bowler who bowled superlatively well.

Draw your own conclusions.

Sangakkara and the IPL Auction

Sri Lankan cricketer Kumar Sangakkara has decided to not participate in this year’s IPL auction. In the opinion of this blog, this is an extremely smart decision, for Sri Lankan cricketers are unlikely to be available for a large part of this year’s IPL, thanks to their tour of England starting in May. Let me explain.

The IPL Auction is a strange beast. Each team has a salary cap, and players are auctioned across teams such that a team spends no more than its salary cap (in total). Now, in case a player is not available for a particular part of the tournament (due to a clash in schedules due to international commitments, essentially), the fees paid to the player is pro rated according to the number of matches for which he is available. However, while calculating the team’s salary cap, the player’s full season salary will be counted.

For example, if Sangakkara were to participate in the auction, and win a salary of Rs.5 Crore. Now, if he is available for only 40% of his team’s games, he would be paid Rs. 2 Crore. However, when his team’s total salary is determined, the full amount of Rs 5 Crore is taken into account.

Assuming that the salary cap is the real reason as to why teams don’t bid too much for a player (as opposed to capacity to pay), teams will not want to let go of a large amount of their salary cap for a player who is unlikely to be available for the full tournament. Thus, if Sangakkara were to enter the IPL Auction this year, he is likely to be undervalued, and hence he has decided to not take part in the IPL at all.

What Sangakkara is betting on is that in the auction teams will have a short-term perspective, and will be looking at only this year’s commitments in order to determine a player’s availability . Ideally, since the auctions are for purchase of a player for three years, teams should be taking into account the tours scheduled for the IPL seasons of those years (the gap in India’s schedule will show when the IPL will take place, and a player belonging to any country that has cricket scheduled at that time according to this chart will not be available for the IPL). However, perhaps due to the uncertainty in next year’s schedules (thanks to the proposed ICC revamp), teams are only going to take into account this year’s commitments in order to guide their bidding.

Sangakkara has said that he plans to take part in next year’s IPL, and he hopes for a much better valuation then compared to this year, for he will be free of international commitments. Given that the salary cap for the teams increases by only 5% (Rs. 3 Crore) next year, what he will be banking on is that teams might release some high value players they will be employing this year.

Tailpiece: Given that the English domestic calendar invariably clashes with the IPL, English Test players are going to be forever undervalued in the IPL. At least they should be if teams are intelligent about their bidding.

Tailpiece2: Samit Patel and Alex Hales have a deal with their county Nottinghamshire that they will be allowed to play in the IPL only if they can get a fee of USD 400000 (INR 2.5 Crore). They have both put their base prices as Rs. 2 Crore. It will be interesting to see if and how teams go about picking them!

Who should the IPL franchises retain?

I have a proprietary algorithm for evaluating cricket matches. This algorithm analyzes matches ball-by-ball and then computes the “impact” of each player on the game, in terms of both batting and bowling.

I’ve been intending to do this for a while now but I finally got down to calculating the impact of different players in the past editions of the IPL, and who it makes sense for franchises to retain (incidentally, today is the last day for franchises to announce to the IPL who the players are who they are going to retain).

Let us go franchise by franchise and see who the best players are. The numbers in the brackets represent the impact of each player according to my proprietary system.

1. Chennai Super Kings

By a long way, their two best players are MS Dhoni (3.53) and Ravindra Jadeja (3.46). Interestingly, the primary reason for the latter’s high score is his batting (2.86)- he has been bowling well, too (0.6), but it is his batting that has had significant impact.

These two are followed some distance behind by Raina (2.02) and the now retired Mike Hussey (1.75). Ashwin is some way behind at 0.7 (his bowling is at 1 and batting at 0.33; the algorithm tends to unfairly penalize bowlers for their batting abilities, or the lack of it).

Chennai have already made their decision on who to retain. They are going to retain Dhoni, Jadeja, Raina, Ashwin and Dwayne Bravo. The last is a bit of a puzzle, at -1.09. His batting has been excellent – he has contributed 1.52 but his bowling has been utter crap at 2.61. CSK would do well to use him as a batsman only

2. Delhi Daredevils

This is a team that has performed rather badly in the last bunch of IPLs, so they might be expected to dispense with some players. Virender Sehwag (3.14), though, has performed exceptionally in the rot, though this season’s domestic performance (or the lack of it) might go against him. Next is the injury-prone Irfan Pathan (1.72). Shahbaz Nadeem is a surprise package at 1.56. I wouldn’t expect them to retain anyone.

Umesh Yadav (-1.77) and Mahela Jayawardene (-2.33) have been especially poor performers

3. Kings XI Punjab

Another franchise that didn’t do particularly well in the last set of IPLs. David Miller (2.05) was their standout performer, followed by Gurkeerat Singh (1.24), Shaun Marsh (1.11) and Praveen Kumar (1.02). The latter two are highly injury prone and they may not want to part with a large part of their budget for the yet uncapped Gurkeerat. So if you expect them to retain any players, it would only be Miller.

At the other end, Parvinder Awana (-1.92) has been the standout performer.

4. Kolkata Knight Riders

Sunil Narine (4.48) and Gautam Gambhir (4.22) tower over the rest. Following them are Shakib al Hasan (1.63) and Iqbal Abdulla (1.13). One would expect them to hold on to the first two (Narine and Gambhir) and try to use their trump card to match a price for Shakib.

Jacques Kallis performed particularly badly (-2.81) and is unlikely to be retained.

5. Mumbai Indians

If you were to rank all players in descending order of impact, the standout player across teams would be Harbhajan Singh (5.04; 3.64 bowling, 1.41 batting). Despite his axing from the national team, one would expect him to be retained by the franchise. He is followed some way behind by Lasith Malinga (2.01), Kieron Pollard (1.97; with 3.05 in batting and – 1.09 in bowling) and Rohit Sharma (1.74). One would expect all of those three to be retained. Dinesh Karthik at 1.31 might also be retained, for they will only need to give up Rs. 4 Crore from their salary cap to get him.

6. Rajasthan Royals

If one goes by the gossip, the Royals are expected to retain a large number of players. They are the “moneyball” team of the IPL. They don’t spend too much on salary but try to get otherwise undervalued players to play for them.

Brad Hodge (1.91) has been their star performer but his age might go against him – they might prefer to match him using their trump card. They are expected to retain Shane Watson (1.55 with 3.83 batting and -2.28 bowling), though. Stuart Binny at 1.34 is also a good bet to be retained.

Interestingly, the system shows a negative impact for the otherwise highly rated Sanju Samson (-0.17)! He is, however, another player they might retain.

7. Royal Challengers Bangalore

The Royal Challengers have already made their decision – they will retain Chris Gayle (4.93; with 6.51 batting and -1.58 bowling), AB de Villiers (3.12) and Virat Kohli (1.95 with 2.22 batting and -0.27 bowling). The one highly rated player they are not retaining is Zaheer Khan (3.69). Khan has been exceptional considering that his partners in the RCB pace attack are Vinay Kumar (-3.59), RP Singh (-2.83) and Abhimanyu Mithun (-1.69).

Their only other highly rated bowler is Murali Kartik (1.05). They will need to completely rebuild their bowling attack in order to compete this IPL

8. Sunrisers Hyderabad

Dale Steyn (3.43) is the standout performer and they would do well to retain him. The next best is Shikhar Dhawan, who is some distance away at 0.72. Given the paucity of quality Indian players, though, they might end up retaining Dhawan also.

I’m willing to share the full results of my analysis. Do reach out to me if you want to play around with it and I’ll send it to you. And let me know what you think of these ratings.

Spending on Indian Players in IPL Auctions

In the first IPL Auction in 2008, teams spent an average (median) of 47% of their overall spend on Indian players, the rest going to foreign players. By the time of the auction in 2011, however, they had wisened up to the fact that only four foreigners can play in the eleven, and the average (median) spend on Indian players went up to 65%.

How did different teams fare on this count? The following graph describes this (I’m generally not a big fan of “dodged” bar graphs but couldn’t think of a better way of representing this data. If you have any ideas, do let me know).

As you can see in this graph, most teams significantly increased their spending on Indian players. The only teams that failed to do so were Deccan Chargers (who performed really badly and then dropped out of the IPL), Kings XI Punjab (performed badly all three seasons) and Rajasthan Royals (who built their team around “uncapped” Indian players who were not part of the auction).

It will be interesting to see what this ratio is like in the following auction.

Analyzing the IPL Auction Rules – 1

So finally after a really long delay the rules for the IPL Auction 2014 are out. Each franchise has the option of retaining up to five players, with additional “trump cards” that allow them to match the price of a winning bid in the auction for players that were part of their teams in the earlier IPLs.

At the outset, the rules of the auction look loaded towards teams that already have strong squads and want to retain as many players as they can – for example, given the rules of the auction, a team can retain up to 6 players from their existing squads, and this significantly biases the auction in favour of teams that want to retain players.

Looking a bit deeper, though, it is clear that this luxury of retention comes at a price. For example, irrespective of what the team negotiates with its number one player, Rs. 12.5 Crore (125 million), or a little more than 20% of the cumulative salary cap will be debited from the team’s account. For the next player, Rs. 9.5 Crore (95 million) will be debited. There is a sliding scale and the fifth player a team retains will cost them Rs. 4 Crore in terms of their budget.

The question is if this pricing is appropriate – is charging 20% of the team budget for the number one player enough compensation for the benefit the team gets by way of retention? Is charging two thirds of the total salary cap (Rs. 39 Crore) enough for retention of five players?

At first look, this pricing looks appropriate – after all, why would someone want to forego two thirds of their auction kitty for keeping just five players, when the total squad size is 16 to 27? However, looking at the previous auctions tells a different story.

The two graphs here shows the proportion of total auction money spent by each team on each player in the last two auctions. The graph might appear complicated so let me explain. For each team, I ordered players bought in the auction in the descending order of price. Then I looked at how much the top player cost as a proportion of the total money spent at the auction. Then, how much the top two players cost and so on.

ipl11

(click on images for full size. For the 2008 auction, marquee players have been included in the analysis)

In the 2008 auction, teams spent between 60 and 85% of their budgets in order to select their five most expensive players, with a median of 72%. In the 2011 auction, teams spent between 65 and 90% of their budgets for their top five players (takes into account retained players), and the median spend was 71%.

Given that the “top 5” players for each team cost them upwards of 70% of their total budgets in the last two auctions, charging teams only Rs. 39 Crore (65%) for retaining five players is blatantly unfair, and biased towards the teams that want to retain. Also, considering that retained players are “known devils”, there is more value for money for teams from retained players. So in the ideal case, the fee for retaining 5 players should have been definitely upwards of 75% of the total budget (Rs. 45 Crore).

The following table helps to show the undervaluation of each retained player:

The second and third columns in the above table shows the median percentage of total budget teams spent in order to buy their top N players. The last column shows what percentage of their budget they would have to spend if they are to retain players in the auction.

The message for teams is clear: retain as much as you can. It is cheaper to retain your top players rather than building a new team from the available pool. The challenge, however, is to negotiate a good price with these players.

PS: I have a solution that can help teams plan their auction strategy. If you are an IPL team and you are interested in this, contact me through the contact form.

Sales and marketing

On Saturday evening, I drank a Pepsi.

You might wonder why I’m making such a big deal about it. Because it is a big deal. Because I don’t normally drink pepsi. My preferred choice of cola is Thums Up, and if it’s not available I have a Coke. The only time when I have a pepsi is when both Thums Up and Coke are not available. There are times when I end up at PepsiFoods only stores, and sometimes I even have dew instead of pepsi.

You might think I’m extrapolating based on one data point. But I know more people who swear by thums up. For whom Pepsi is only a third choice cola.

The reason I’m bringing this up now is that Pepsi has spent a bombshell on sponsoring the IPL. Yes, despite being on HD, I managed to see a number of their ads. Pepsi Atom seems cool but they didn’t seem to have had its distribution in place when I wanted to try one. I reverted to my old faithful thums up. Now, I hear news that the India head of Pepsi has been sacked because he was deemed to have over spent on the IPL.

Why someone like Pepsi would spend so much on advertising is beyond me. Yes, they need to be on the top of people’s minds. But considering that everyone they advertise to has tried each of the major colas once, and loyalties to cola brands being rather heavy, I don’t see how they seek to influence sales by advertising. That Shah Rukh Khan drinks pepsi doesn’t alter my opinion one bit – I’m loyal to my thums up. I would think the same to be true to a loyal pepsi fan.

After having said so many times that I’m a loyal Thums Up customer, you might want to know why I drank Pepsi on Saturday. Because that little shop in Malleswaram I went to stocked only pepsi products. And he didn’t have dew. Faced with the choice of Pepsi or Mirinda or 7Up, I opted for the first. It was that exclusive agreement that PepsiCo had with that shopkeeper that made me consume their product.

Pepsi should invest more in this. Give higher margins to retailers who are willing to stock only pepsi products. Cola is something in which people have loyalties, but those loyalties are typically not so strong that the shop tends to lose business if the customer’s favourite brand is not available. Given lack of choice, customers will switch.

But then I guess the problem is that Pepsi is a “marketing-driven” rather than “sales-driven” company (we used to hear a lot about this distinction during recruitment time at business school). And the thing with marketing everywhere is that they are not measured. Like this friend who markets phones once gleefully told me that an advertisement he put out had a million likes on facebook. I asked him how many extra phones his company sold as a function of that ad. He had no answer. Marketing is like that everywhere. It is not judged based on real tangible numbers. And I hear that marketers like to keep it that way!

The last time I was in this guru mode I had commented that Nokia’s strategy of promoting Lumia by the strength of its camera was doomed to fail – for people don’t buy phones because they want a camera. Nokia seems to have learnt. The latest ad for the 520 talks about the apps that are available. This time they seem to have got it right.

Big Bash

Half an hour back, I moved from my room/office to the hall to catch what I thought will be five minutes of Big Bash (Australia’s version of the IPL). I ended up staying there for half an hour. I don’t know if the quality of cricket was decidedly superior to that of the IPL, a tournament I hardly watched in its latest edition (I keep forgetting who won, even). It was the quality of broadcast that had me hooked.

I must mention here that I was watching the broadcast on Start Cricket HD, but even the IPL was telecast on SetMax HD this year. And there was simply no comparison in terms of the quality of pictures. I don’t know if it has something to do with the nature of floodlights at the Gabba (maybe it does), but the pictures from the Big Bash were so significantly superior to that of the IPL (tough to explain this objectively, so you should watch and see for yourself). And then there was the commentary. Again, I don’t think any of the famed Channel Nine line-up was involved (the broadcast is by Fox Sports, and I didn’t hear any familiar voices), but the commentary was good while not being too intrusive. Again, there was no idiotic playing up of the sponsors (DLF maximums and the like), and then they had wired up Shane Warne as he thought aloud as he plotted Brendon McCullum’s dismissal.

There is something about the overall sound of the Big Bash telecast that the IPL misses out on. It probably has to do with the way they capture the crowd noise, but it does make one feel like one is in the stadium. Of course, I must mention here that of whatever bits of IPL I watched this year, I watched most of it on mute thanks to the insufferable commentary.

And then the ads. The IPL simply doesn’t seem to have figured out an effective ad model. They stuff the viewer with so many ads that there is little brand recall, and people mostly react to these brands with a sense of irritation. The Big Bash, on the other hand, seems to have figured out the model of fewer and shorter ad breaks, which will still keep people in their seats. I hope they are being compensated for it with higher revenue.

There is a lot that the IPL has to learn from the Big Bash. Hopefully the low TRPs of the last edition will mean that they will be open to innovation and improvement. I surely won’t mind watching the IPL if it is produced with the same quality as the Big Bash. Maybe I’m being too hopeful here..

IPL Fixing

If Chennai beat Punjab today, then both RCB and DC will go through to the semis. Right now all three teams (Punjab, Bangalore, Hyd) are on 14 points and Punjab has a significantly lower NRR than the other two. So irrespective of who wins tomorrow’s game, it is likely that both are going to go through.

If Punjab lose tonight, then Kumble and Gilly can sit down and “cut the IPL melon” and decide among themselves who wants to face Chennai and who wants to face Delhi. And fix tomorrow’s match accordingly. As long as either RCB wins or if DC doesn’t win by a big margin, both go through. Splendid stuff.

Which is why, in football, in all leagues all last round games are played simultaneously. This happened after in the 1982 world cup, Germany and Austria figured out that as long as Germany would win 1-0, both would go through to the quarters ahead of Algeria. So Germany scored quickly, and then both they and Austria just passed the ball around for the rest of the game and chucked out Austria Algeria.

however, the iPL is more about money and about TRPs than about real competition so we are unlikely to see the last four games being played simultaneously.

Update

Ok so through some expert analysis I’ve come to the following conclusion after yesterday’s games.

1. Deccan Chargers are through irrespective of today’s result

2. Royal Challengers Bangalore can also be through even if they lose. All they need to make sure is that if Deccan bats first, then the margin of victory is not more than 75 runs. If Bangalore bats first, they need to make sure that Deccan takes at least 10 overs to reach the target.

Note that these numbers are approximate and will vary with the exact score that is made. But these two numbers can be taken as a ballpark.

Bottomline is that unless RCB mess up royally, Punjab are on their way home.