auction of players in indian premier league: the strategic perspective

ZENITH

International Journal of Multidisciplinary Research

Vol.2 Issue 2, February 2012, ISSN 2231 5780

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AUCTION OF PLAYERS IN INDIAN PREMIER LEAGUE:

THE STRATEGIC PERSPECTIVE

SONALI BHATTACHARYA*; SHUBHASHEESH BHATTACHARYA**

*Associate Professor,

Symbiosis Centre for Management and Human Resource Development,

Pune-411057, India.

**Professor,

Symbiosis Institute of International Business,

Pune-411057, India.

ABSTRACT

Indian Premier League (IPL), one of the biggest sporting properties of the world is now in its

fourth edition. It is considered as one of the best business model of recent times. On 7th

and 8th

January, 2011, it had held auctioning of players for the ten franchisees in the contest, which was

televised world over by Sony Max. It is of interest to study how the various teams have

strategized their decision on setting the final bidding price of the players according to

performance of the players in the previous editions of IPL and other similar formats of the game,

and team‘s own performance in previous seasons. Also, it has been a revelation how

personalities of individual players and team leaders can affect the performance of the team.

KEYWORDS: Indian Premier League, Auction, Game Theory, Strategy.

______________________________________________________________________________

INTRODUCTION

In 2008, Vice President of Board of Control for Cricket in India (BCCI), Lalit Modi partnered

with IMG executive Andrew Widblood to initiate India Premier League, a T-20 version of

cricket, in which each match was to be of around 3 hours with each competing team facing

twenty overs. Teams were auctioned and ownership were won by leading Business tycoons and

Bollywood celebrities which ensured pumping in of huge money. The DLF IPL has been rated

fourth largest sporting property by Forbes in 2009. The IPL is expected to generate revenue of

nearly $2 billion in the period 2008-19, including proceeds from TV rights ($918 million),

promotions ($108 million), and franchises ($724 million). Pune and Kochi are the two new

franchisees added in the recent fourth Edition of IPL 2011 to the previous eight. The IPL - has

four major sources of central revenue. The first is the sale of media rights for the matches, which

is likely to fetch the BCCI $1 billion over a 10-year period. The second includes things like title

sponsorship of the tournament, licensed merchandise and so on. From the sale of media rights,

IPL keep 20% for itself, give out 8% as prize money for the tournament and distribute the

remaining 72% evenly between the franchisees. These proportions will be valid till 2012, after

which IPL's share goes up in two stages by 2018, with the shares of both prize money and

franchisees declining.

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The second stream - other central revenues - is shared between IPL, franchisees and prize money

in the ratio 40:54:6 up to 2017 after which IPL's share will increase to 50%, the franchisees'

share will drop to 45% and the remaining 5% will go for prize money. The third major source is,

of course, the amounts bid by the franchisees. The fourth stream comes from the revenues

generated by the franchisee rights, of which 20% will be given to IPL.

IPL is reaching two different kinds of agreements with players when it gets them on board.

Under one arrangement — called the "firm agreement", the IPL commits a certain fee to the

player. If a franchisee bids more for that player in the auction between franchisees for different

players, the IPL gets to keep the excess. Under the other - the "basic agreement" – the player gets

whatever is bid for him. Not surprisingly, most players so far have opted for the "basic

agreement". The players are ensured daily allowance of $100 and can have share of bonus and

prize money depending upon the performance of the team. King Fisher Airlines has secured the

official partnership right with a $0.02 billion deal and Sony Entertainment Television has won

the broadcasting right with a staggering payment of $190 crore for ten years. The present paper

is intended to discuss the strategies that have been used by the ten franchisee teams during the

auctioning of the players in 2011 IPL season and economical, behavioral factors and cricketing

attributes which may have affected the decision of the franchisee.

GAME THEORY APPROACH TO AUCTION

Vickerey (1961) first introduced auction by game theory approach. There are traditionally four

types of auction that are used for the allocation of a single item. They are:

First-price sealed-bid auctions in which bidders place their bid in a sealed envelope and

simultaneously hand them to the auctioneer. The envelopes are opened and the individual

with the highest bid wins, paying a price equal to the exact amount that he or she bid.

Second-price sealed-bid auctions (Vickrey auctions) in which bidders place their bid in a

sealed envelope and simultaneously hand them to the auctioneer. The envelopes are

opened and the individual with the highest bid wins, paying a price equal to the exact

amount of the second highest bid.

Open Ascending-bid auctions (English auctions) in which the price is steadily raised by

the auctioneer with bidders dropping out once the price becomes too high. This continues

until there remains only one bidder who wins the auction at the current price.

Open Descending-bid auctions (Dutch auctions) in which the price starts at a level

sufficiently high to deter all bidders and is progressively lowered until a bidder indicates

that he is prepared to buy at the current price. He or she wins the auction and pays the

price at which they bid.

Mc Milan (1992) used English open auction for administering license in Spectrum deal by

Federal government. The open auction helps in avoiding ―winner‘s curse‖ as would be evident in

sealed bid, in which the highest bidder overestimates the value of the entity and often realizes

later he has to pay higher price than the actual value. In an open English type auction the bidder

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has the opportunity to play cautiously and discount its own estimate of the value. In an English

auction, a Nash Equilibrium can be reached as a bidder may choose to be in action till the

bidding price does not cross his estimated value. If all the bidders follow the same strategy, it

will be the weakly dominant strategy. An intelligent bidder may then try to change his strategy.

IPL AUCTION BACKGROUND

In the IPL Auction there are 10 teams, each team had USD 9,000,000 at its disposal which they

could use for buying or retaining at least eleven players that will be required to form their team.

Two of the teams: Pune Warrior and Kochi were playing for the first time. Each player was

priced at a base price depending upon his performance record and experience by the auctioneer.

Bidders in order to buy the players were required to quote a price higher than or equal to the base

price. To put it mathematically,

Let ni be the number of IPL players to be purchased by the ith

team, i = 1, 2,…, 9 (since there are

nine teams), where ni ≥ 11(each team requires eleven players to play a match)

Let Pij be the payment to be made to jth

player of ith

team Then, 1

9, 000, 000in

ijj

p USD

(as each team had USD 9,000,000 at their disposal to spend on the auctioning of the players.)

Suppose ith

team decides utility value to be given to a Player for batting, Bowling (wicket taking

capability) and fielding respectively is UBi, Uwi and UFi such that 1i i iB W FU U U . The

values of UBi and Uwi can vary according to whether a player is a batsman or bowler or an all

rounder. Let us say ith team decides following utility values

Type of player UBi Uwi UFi

Batsman 0.8 0 0.2

Bowler 0.1 0.8 0.2

All Rounder 0.4 0.4 0.2

Then, the team has to decide on the utility they wants to give to a batsman‘s average and strike

rate. Let it be wb1 and wb2 such that wb1+wb2 =1. Similarly utility of a bowler can be based on

his bowling average, strike rate and economy rate and a fielder‘s performance can be measured

by the number of catches and stumpings. The players can be ranked based on their percentile

rank in batting, bowling and fielding and bidder‘s assumed utility of each function. Suppose we

have a pure batsman has a percentile rank of 0.9 as a batsman and has a percentile rank of 0.4 as

fielder then his expected utility can be taken as 0.8 0.9 + 0.2 0.4 = 0.72+ 0.36 = 1.08

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PROBABLE FACTORS AFFECTING THE DECISION OF THE BIDDERS

(1) A bidder may then decide how many batsman and bowler he would require to form his

team. As in this shorter form of this game bats man has a bigger role to play let us

suppose the bidder may decide he will require seven batsmen and four bowlers. So for

him we can assume i iB WU U

(2) How many players from the top quartile he may like to be in his team. For example he

may want to have at least four players from the top quartile.

(3) How many players he wants from top quartile and how much money he desires to put in

stake for getting these players from the top quartile. For example: he may decide to spend

USD 4,000,000 on getting players from top quartile; then if he wants to secure four

players from the top quartile, he may likely to spend USD 1,000,000 on each of these

players.

(4) Whether he wants to create the ―team of future‖ then he may prefer to select a very young

team.

(5) If and to what extent he/she may want to give opportunity to local players of the region

they are representing, though the minimum number of local players or players from the

catchment area team has to accommodate was 4.

(6) Similarly, a team can have at most eight foreign players while four players can take the

field.

SOME OF THE STATISTICS RELATED TO THE IPL AUCTION, 2011

TABLE 1: NUMBER OF PLAYERS FROM EACH COUNTRY WHO WERE

SOLD/RETAINED DURING THE AUCTION

Indi

a

Austral

ia

Banglade

sh

Englan

d

Netherla

nd

Newzeala

nd

Sri

Lanka

South

Africa

West

Indies

52 38 1 7 1 7 10 20 3

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TABLE 2: SUMMARIZATION OF PRICES AT WHICH PLAYERS WERE

PURCHASED/ RETAINED BY VARIOUS FRANCHISEE (IN USD)

Chen

nai

Supe

r

King

s

Deccan

Chargers

Delhi

Daredevi

ls

Kings XI

Punjab

Kolk

ata

Knig

ht

Ride

rs

Koc

hi

Mu

mbai

India

ns

Pune

Warr

iors

Rajas

than

Roya

ls

Royal

Chall

enges

Bang

alore

Avera

ge

4813

88.9 491071.4 485294.1 631363.6

7145

83.3

4582

35.3

7100

00

5764

28.6

7743

75

54281

2.5

Standa

rd

Deviat

ion

4939

51.1 373858.2 569362.2 414874

7622

82.6

4223

48.1

6885

03

6420

11.3

5912

18.1

56920

9.9

Coeffi

cient

Skewn

ess

1.41

2008 0.675841 1.782551 0.153705

1.67

5985

1.18

508

0.81

8191

1.65

7552

0.604

487

1.072

869

Numb

er of

Player

s

Retain

ed/bid

succes

sfully 18 14 17 11 12 17 12 14 8 16

Some of the highlights of the above statistics are :

(i) Kolkata Knight Riders purchased eleven players and is credited to have won the two

players securing highest final bidding prices and they along with Mumbai Indians are

making highest average payments to its‘ players with the greatest spread.

(ii) Kochi, one of the two teams who is participating in the IPL for the first time and Chennai

Super king, the most consistent team in the IPL so far, (having won the championship

in the last season, and finalist and semi-finalist in the previous two IPL seasons) are

statistically proving to be the best strategists in playing the auction. They have now

seventeen and eighteen players respectively in their teams and are making the lowest

average payments to te players. They have choice of selling later some of their

players at higher price.

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(iii)Deccan Chargers with fourteen players in their team are making lowest average payment

to its players with low degree of skewness which implies payments have been

symmetrically distributed amongst the players.

BUILDING OF A PREDICTIVE MODEL FOR THE AUCTION PRICING

Rastogi and Deodhar (2009) and Karnik (2010) had used hedonic pricing model to determine

auction price of players in IPL league in which they used cricketing attributes of players like

performance in one-day internationals and test cricket and as well as non-cricketing attributes

such as iconic status of the players in the region they represent, as the variables determining the

final bidding price. However, IPL is now four years old and have thrown up new heroes like

Yusuf Pathan, R Ashwin, Manish Tiwari, Saurabh Tiwari and Robin Uthappa previously

unknown in any other format of the games. Also, local icons are no longer proving to be a

determining factor for retaining or picking up players as had been proved in earlier sessions of

the game . For example neither Saurav Ganguly was picked up by Kolkata Knight Riders and nor

Rahul Dravid was picked up by Royal Challengers Bangalore. So we have considered cricketing

attributes of the players in Twenty20 format of the game for building our model. Factors

considered are:

(i) Batting average implying total number of runs scored by the total number of innings

played.

(ii) Batting Striking Rate implying numbers runs scored per hundred balls.

(iii)Bowling Average defined as the total number of runs conceded by the bowlers divided by

the number of wickets taken by the bowler, so the lower the average the better.

(iv) Bowling strike rate is defined for a bowler as the average number of balls bowled per

wicket taken. The lower the strike rate, the more effective a bowler is.

(v) Economy Rate of Bowlers is the number of runs scored per over bowled by a Bowler. We

also took the interaction variables representing interaction of batting average and

fielding(catches and stumpings per match) as well as bowling average and fielding.

(vi) Whether a cricketer is a batsman ,bowler or all rounder was represented by two dummy

variables, dummy 1 and dummy 2

a. where dummy1 takes the value one, if a cricketer is batsman only and zero

otherwise.

b. Dummy 2 takes the value one, if a cricketer is mainly considered as a bowler and

zero otherwise.

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TABLE 3: CROSS TABULATION OF IPL TEAM AND NUMBER OF

CRICKETERS OF EACH TYPE

IPL Team Type

Total

All Rounder Batsman Bowler

Chennai Super king 7 6 5 18

Deccan Chargers 3 6 5 14

Delhi Dare Devils 8 6 3 17

Kings XI Punjab 4 3 4 11

Kochi 4 6 7 17

Kolkata Knight

Riders

6 3 3 12

Mumbai Indians 6 2 4 12

Pune Warriors 6 4 4 14

Rajasthan Royals 3 1 4 8

Royal Challengers

Bangalore

4 8 4 16

Total 51 45 43 139

(vii) We also took a dummy variable to represent the IPL idols as the players who played

exceptionally well in the previous IPL seasons. We considered the IPLXI players

picked up by Crickinfo after the IPL season 2010 as the IPL idols. Following are the

players ( and teams they represented IPL season 2010):

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TABLE 4: IPL XI BY CRICKINFO (2010)

Jacques Kallis - Royal Challengers Bangalore

Sachin Tendulkar - Mumbai Indians

Suresh Raina - Chennai Super Kings

Ambati Rayudu - Mumbai Indians

Mahendra Singh Dhoni (captain and wicketkeeper) - Chennai Super Kings

Robin Uthappa - Royal Challengers Bangalore

Kieron Pollard - Mumbai Indians

Ravichandran Ashwin - Chennai Super Kings

Anil Kumble - Royal Challengers Bangalore

Lasith Maligna - Mumbai Indians

Doug Bollinger - Chennai Super Kings

Data were collected from www.iplcricket.com, www.cricketfundas.com/ and

www.espncricinfo.com/ . The Scatter Plot suggested that there exist linear relationship between

cricketing attributes and the final bid price of the players. We ignored taking number of wickets

or number of scores of 4‘s or 6 ‗s as determining factors as had been taken by earlier authors

because we felt in this format of the game there are young players who may have little

international exposures , but are locally known for their hard hitting of balls, running between

wickets or striking of bowls or agility in the field and hence they may have less number of hits of

fours or sixes or number of wickets in total and still may be considered good players in shorter

version of the game.

Following is the Summarization of Statistics used for our study.

http://www.iplcricket.com/

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TABLE 5:SUMMARIZED DATA FOR IPL AUCTION 2011

IPL Team Age Batting

Average

Batting

Strike

Rate

Bowling

Economy

rate

Bowling

Strike

Rate

Catches

&

Stumping

per

innings

Bowling

Average

Chennai

Mean 28.5556 21.1750 118.0667 7.5442 19.1182 .3639 25.6042

Std.

Deviation

3.2760 11.3431 27.6921 .6747 2.8565 .1376 6.8338

Deccan C

Mean 26.9286 18.3679 117.4800 7.7240 18.6800 .3570 22.4673

Std.

Deviation

3.7306 10.3028 22.8110 1.1826 4.5217 .1826 7.5575

Delhi Da

Mean 28.1176 20.8471 121.2676 7.7482 21.3182 .2907 27.0400

Std.

Deviation

3.0183 11.1212 28.1054 .6089 5.5139 .1413 8.7930

Kings XI

Mean 29.6364 20.9455 126.1200 7.3250 18.9875 .4314 23.1988

Std.

Deviation

5.0452 11.3786 12.6932 .4009 3.2817 .2590 4.9047

Kochi

Mean 29.1765 18.5735 112.2718 7.6058 19.7250 .3599 25.6425

Std.

Deviation

5.5027 10.7179 21.1216 .6855 5.5151 .1284 6.8579

Kolkata

Mean 28.7500 20.6667 109.1775 7.4433 19.4000 .3885 24.2722

Std.

Deviation

5.7386 10.1548 35.8655 .6374 5.5170 .2132 7.7795

Mumbai I

Mean 29.0833 23.6975 134.5950 7.6560 23.0600 .3684 29.5960

Std.

Deviation

4.4611 11.0714 21.4751 .5833 9.1629 .1349 12.5295

Pune War

Mean 27.9286 18.8929 120.5200 7.5136 20.8091 .4287 26.3645

Std. 4.4283 7.4577 18.4337 .7586 7.5336 .2197 11.0661

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Deviation

Rajastha

Mean 31.2500 15.2625 103.0363 7.7986 21.4143 .3387 27.1125

Std.

Deviation

5.8979 11.2098 31.7765 1.2148 7.4616 9.568E-

02

13.8587

Royal Ch

Mean 27.8750 19.0525 110.1144 7.5200 27.3088 .3946 37.0213

Std.

Deviation

5.6080 9.3588 24.1219 .9730 19.8612 .3347 30.0611

Total Mean 28.5755 19.8753 117.4538 7.5900 20.8523 .3709 26.6644

Std.

Deviation

4.6109 10.2770 25.4191 .7654 8.0174 .1964 12.2259

The best model which was obtained by step-by-step regression analysis is as follow:

Auction Price (USD) = 936154.5 + 15835.804 Batting Average + 19340.336 Bowling Strike

Rate – 137604 Bowling Economy rate. Batting average as expected as positive sign and

bowling economy rate and bowling strike rate are having negative sign. The Model has been

summarized as follow:

TABLE6: COEFFICIENTS OF THE MODELS

Model

Unstandardized

Coefficients

B

Std. Error

Standardized

Coefficients

Beta

T

Sig.

Collinearity

Statistics

Tolerance

VIF

1

(Constant) 283469.545 106024.950 2.674 .009

Batting

Average

16617.121 5315.627 .310 3.126 .002 1.000 1.000

2

(Constant) -15724.710 157641.494 -.100 .921

Batting

Average

13979.388 5274.807 .261 2.650 .009 .960 1.041

Bowling

Strike

Rate

-16466.826 6563.357 -.247 -2.509 .014 .960 1.041

3 (Constant) 936154.507 503525.949 1.859 .066

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Batting

Average

15835.804 5274.763 .295 3.002 .003 .930 1.075

Bowling

Strike

Rate

-19340.336 6619.425 -.290 -2.922 .004 .914 1.094

Bowling

Economy

rate

-137603.565 69248.189 -.198 -1.987 .050 .907 1.103

a Dependent Variable: Cost

TABLE7: ANOVA TABLE FOR THE MODELS

Model Sum of Squares Df Mean Square F Sig.

1

Regression 2577422498545.020 1 2577422498545.020 9.772 .002

Residual 24264470320603.900 92 263744242615.260

Totala 26841892819148.920 93

2

Regression 4147242581712.270 2 2073621290856.135 8.315 .000

Residual 22694650237436.650 91 249391760850.952

Totalb 26841892819148.920 93

3

Regression 5101083023522.090 3 1700361007840.698 7.039 .000

Residual 21740809795626.830 90 241564553284.743

Totalc 26841892819148.920 93

a Predictors: (Constant), Batting Average

b Predictors: (Constant), Batting Average, Bowling Strike Rate

c Predictors: (Constant), Batting Average, Bowling Strike Rate, Bowling Economy rate

d Dependent Variable: Cost

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STRATEGIES USED BY INDIVIDUAL IPL TEAMS

Before we look into strategies used by various IPL teams let us look into the performance of the

eight IPL teams who had been in the IPL seasons of 2008, 2009 and 2010 which played an

important role in designing the strategy for picking up the team

TABLE 8: STATISTICS OF IPL TEAM PERFORMANCE

Team Span Title

s

Matche

s

Wo

n

Los

t

No

Resul

t

Win

%

For

(r/o)

Agains

t (r/o) Best

Wors

t

Chennai

Super

Kings

2008

-

2010

1 47 26 20 1 56.38

4,75

2 /

574.

4

4,475 /

569.1

Champion

s

Semi-

finals

Deccan

Chargers

2008

-

2010

1 46 19 27 0 41.29

4,63

7 /

580.

2

4,694 /

582.4

Champion

s

8th of

8

Delhi

Daredevils

2008

-

2010

0 44 24 19 1 54.56

4,21

9 /

524.

5

4,330 /

547.0 3

rd

5th of

8

Kings XI

Punjab

2008

-

2010

0 43 21 22 0 48.83

4,25

1 /

531.

1

4,274 /

529.1

Semi-

finals

8th of

8

Kolkata

Knight

Riders

2008

-

2010

0 42 16 24 2 39.74

3,60

2 /

491.

3

3,585 /

459.3 6th of 8

8th of

8

Mumbai

Indians

2008

-

2010

0 44 23 20 1 52.28

3,97

7 /

505.

3

3,898 /

523.1

Runners-

up

7th of

8

Rajasthan 2008

-1 44 25 18 1 55.81 4,28

9 / 4,213 / Champion 7th of

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Royals 2010 554.

2

564.2 s 8

Royal

Challenger

s

Bangalore

2008

-

2010

0 46 21 25 0 45.65

4,26

3 /

587.

3

4,521 /

574.5

Runners-

up

7th of

8

(i) CHENNAI SUPER KINGS

It has been the most consistent team in earlier seasons of the IPL. It had retained four players

before the auction and could win the maximum, three players, from IPL idols list. Their

Strategy has been more or less to continue with winning combination. Emphasis has been to

quote higher price for players who are good batsmen and fielders, though the team has five

speacialist bowlers. Following is the model which best describes the bidding strategy of

Chennai Super Kings with an adjusted R square of 0.926 as obtained through step-wise

regression. The model can be given as :

Auction Price = 56366.404 + 730907.680 (IPL10 IDOLS) + 18357.796 (Interaction of

Batting and Fielding).

TABLE 9: CHENNAI SUPER KING: REGRESSION MODEL FOR AUCTION

Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

(Constant) 56366.404 56162.759 1.004 .345

IPL10 IDOLS 730907.680 87165.703 .848 8.385 .000

BATFIELD 18357.796 7124.187 .261 2.577 .033

(ii) DECCAN CHARGERS

Deccan Chargers perhaps has been the most inconsistent performer. They had finished bottom of

the table in 2008, Champion in 2009 and semifinalist in 2010. Percentage of winnings recorded

by the team is higher only to Kolkata Knight Riders and though the number of runs scored by the

team is second only to Chennai, runs conceded by them is the highest. The statistically most

significant model as obtained by stepwise regression, with an adjusted R-square of 0.96, shows

that Age, main effects of Bowling Average, Batting Average, Fielding, and their interactions all

proved to be significant factors in their bidding strategy. Average age of the team players is

lowest at 26.9286 years and final bidding price of senior players were higher. Their apparent

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strategy was to get young players who with allround performance . Pragyan Ojha, the player with

lowest bowling average in twenty-20 was taken at a final bidding price of USD 500000 and

Michael Lumb of England one of top-5 players in Bowling Strike Rate was taken at a bidding

price of USD 80000.

The model is given as:

Final Bidding Price = 1354783 + 76007.9 Age +2812494(Catches & Stumping per innings)

+32482.3

(Batting Average)- 43044.5 (Bowling Average).

Players with all round performance in batting, bowling and fielding were preferred. Senior

players were given premiums.

(iii) DELHI DARE DEVILS

Delhi Dare Devils performance in the earlier seasons of IPL can at best be described as average.

They had finished 4th

in 2008, 3rd

in 2009 and 5th

in 2010. Batting has been there forte. In this

season of IPl they had retained Virendra Sehwag, one of the finest batsmen in shorter form of the

games and one of the top five players in batting strike rate in twenty-20. Aaron Finch, an

Australian player with highest strike rate and Robert Frylinck of Australia one of the top most

players with high batting average in twenty-20 format were picked up. The best model for Delhi

Dare Devil‘s strategy as obtained through step-wise regression is given as

Auction Price = 690342.7 + 960.087 (Interaction between batting average and batting strike rate)

TABLE 10: DELHI DARE DEVILS: REGRESSION MODEL FOR AUCTION

BIDDING PRICE

Coefficie

nts

Standard

Error t Stat P-value

Intercept 690342.7 308101.5

2.2406

34

0.0417

85

Interaction between batting average and batting

strike rate. 960.087 489.0522

1.9631

59

0.0698

1

(iv) KING’S XI PUNJAB

Performance of King‘s XI Punjab can be described as below par, semifinalist in the first season

and finishing at fifth and eighth position in 2009 and 2010. Confidence on its key player Yuvraj

Singh seemed to have lost and it neither retained Yuvraj and nor seemed to be keen in winning

him in the auction. Batsman, Shaun Marsh of Australia with a Batting average of 45.3, Wicket

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keeper and Captain Adam Gichrist and Dinesh Karthik are expected to be their prized

procession. Final bidding price of the players picked for the team is fairly symmetrically

distributed. The most significant model with adjusted R-square of 0.957 shows picking up

bowlers with good strike rate and good fielders has been their key strategy. The model is given

as: Auction Price = -2279081.123 - 126019.318 Bowling Strike Rate

TABLE 11: KINGS XI PUNJAB: REGRESSION MODEL FOR AUCTION BIDDING

PRICE

Unstandardized

Coefficients

Standardized

Coefficients

T Sig. Collinearity

Statistics

B Std. Error Beta Tolerance VIF

(Constant) -2279081.123 277183.129 -8.222 .000

Bowling

Strike

Rate

-126019.318 13231.850 .-890 -9.524 .000 .996 1.004

(v) KOCHI

Though, we could not exactly come out with a statistical model which can explain strategy of

incumbent Kochi, but one of their key strategy has been to get key established players of other

IPL teams which did not perform up to the mark in previous seasons. It has been able to get Brad

Hodge and Brendon McCullum of Australia who have batting average of well above 30 in

twenty-20 format at final bidding price of USD 425000 and USD475000 only. Both these

players earlier formed part of Kolkata Knight Riders. Other key players will be VVS Laxaman of

Australia and Muttiah Muralitharan and Mahela Jayawardene , all of them excellent players but

are aged at wrong side of thirty. Another interesting observation is that Kochi team has players

with highest average batting strike rate, which also implies focus has been in getting good

batsmen and bowlers who are quick between the wickets. Impetus given on getting the two

senior players of Srilanka

(vi) KOLKATA KNIGHT RIDERS

Out of eight teams who have participated in previous three seasons of IPL Kokata Knight Riders

performance has been the poorest. They are the only team who have never reached the semi-

finals and has only 39.74% winning record in the IPL. In 2011, they have intended to give a new

look to their team. Former skipper, Saurav Ganguly was not picked up. Similarly, key former

players Brendon McCullum, Brad Hodge and Chris Gyale who in 2009 were being considered

for captainship were not even considered for bidding. Two of the players who secured highest

bidding price IPL Auction 2011, Gautam Gambhir and Yusuf Pathan were won by KKR.

Gautam Gambhir got the benefit of winner‘s curse for having been first player to be auctioned

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and will be the captain of the side. They have one of the best all rounders, Jacques Kallis, one of

the IPLX idols, Yusuf Pathan, a batsman with second highest batting strike rate and twenty year

old Jaidev Unadkat as a potentially good bowler. Statistically, only batting strike rate appear as

moderately significant predictor of final bidding price with R square of 43% through stepwise

regression. The model is as follow has been tabulated below. The Model is given as:

Auction Price = -302151 + 9312.671 (Batting Strike Rate)

TABLE 12: KOLKATA KNIGHT RIDERS: AUCTION MODEL FOR

BIDDING PRICE

Coefficients Standard Error t Stat P-value

Intercept -302151 691458.3 -0.43698 0.671414

Batting Strike Rate 9312.671 6041.561 1.541435 0.154237

(vii) MUMBAI INDIANS

Mumbai Indians who was Runners up in 2010 season had like Chennai Superking retained four

of its star performers before the bidding. They are Harbhajan Singh, Sachin Tendulkar, Lasith

Malinga and Kieron Pollard. Three of these players also formed part of IPLX idols. Statistically

most significant model with an adjusted R-square of 87% show good bowlers and batsmen with

good batting average and fielding as well as age came out to significant factors. The model has

been tabulated as bellow

TABLE 13: MUMBAI INDIANS: AUCTION MODEL FOR BIDDING PRICE


Intercept 6425589 1729279 3.715763 0.02055

Age -169111 40769.39 -4.148 0.014283

Bowling average -202236 42105.28 -4.80311 0.008629

Bowling Economy rate -126643 61545.88 -2.0577 0.108736

Catches & Stumping per innings -7888177 2245701 -3.51257 0.024615

Batting and Fielding 329807.8 95553.56 3.451549 0.026018

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Auction Price = 6425589 -169111 Age + -202236 Bowling average -126643 Bowling

Economy rate -7888177 Catches & Stumping per innings + 329807.8 Batting and Fielding

(viii) PUNE WARRIORS

Pune warriors who were to be playing for the first time in IPL 2011 has played well in the

auction. They could grab Yuvraj Singh from Kings XI at final bid price of USD 1800000 and

IPL Idol 2010 player Robin Uthappa at USD 2100000. Key strategy has been to pick up players

with good batting average. The most significant model with an adjusted R-square of 53% is

tabulated below:

TABLE 14: PUNE WARRIORS: REGRESSION MODEL FOR AUCTION

BIDDING PRICE


Intercept 39489.78 360775 0.109458 0.91481

IPL idols 1500220 507591.8 2.955563 0.013079

Batting Average 22748.29 18190.61 1.250552 0.237045

Auction Price = 39489.78 + 1500220 IPL idols + 22748.29 Batting Average

(ix) RAJASTHAN ROYAL

Rajasthan Royal‘s performance has been topsy-turvy in IPL. They spend the least in IPL 2008

auction. A young team of unknown local players under the inspired leadership of Shane Warne

went on to become the Champion. Their performance was motivated by the famous Oscar

nominated film Laagan whose storyline was based on similar theme and on the same locality. In

2009, they however finished at the bottom of table, and reached semifinal in 2010. They did not

seem to have the desire to deviate from their once successful model. They had retained Shane

Warne and Shane Watson at USD 1800000 and USD 1300000. Only six more players were bid

successfully in the auction. Other players is expected to be hired from local areas. Their strength

is bowling with only specialist Batsman, Rahul Dravid grabbed from Royal Challengers

Bangalore. The average age of the players are more than thirty and average batting average is

lower than the other teams. The final average bidding price of the players are much higher than

as predicted by the general model.

(x) ROYAL CHALLENGERS BANGALORE

Royal challengers Bangalore has finished at the bottom of the table in 2008 and went onto

become runners up in 2009 and got third position in 2010. They have relied more on talented

Indians, with Virat Kohli retained with a price of USD 1800000 and projected as the skipper of

the team. The most significant model explaining biding price strategy of Bangalore has adjusted

R-square of 0.87 as given below:

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TABLE 15: ROYAL CHALLENGERS BANGALORE: REGRESSION

MODEL FOR BIDDING PRICE


Intercept -1210779 318509.3 -3.80139 0.002936

Bowling Strike Rate -18478.4 3002.163 -6.155031 7.16E-05

Catches & Stumping per innings 1208228 188448.5 6.411449 5E-05

batting strike rate 12381.59 3936.8 3.14509 0.009323

batting average 17786 10548.84 1.68606 0.119906

Auction Price = -1210779 - 18478.4 Bowling Strike Rate + 1208228 Catches & Stumping per

innings + 12381.59 Batting Strike Rate +17786 Batting average

SOME INTERESTING ASPECTS OF IPL

(i) Vijay Mallaya, franchisee owner of Royal Challenger Bangalore (RCB) and owner of UB

group had clearly stated in 2008 that his objective of being part of the IPL business was

to promote his alcohol brand, which otherwise is banned to be promoted directly in India.

Much attention was not paid in the composition of the team. The situation worsened due

to sacking of team manager, Charu Sharma and pressure being created on the team

captain, Rahul Dravid to resign. The result was RCB finishing at the bottom of the table.

Their strategy of giving a new look to the team in 2009, with emphasis on youth and

good fielders clicked under the leadership of Anil Kumble and they reached the final in

2009 after losing four consecutive matches. Anil Kumble‘s leadership style was of

―leading by example‖. RCB also reached the semifinal in 2010.

(ii) In the first IPL in 2008 the Emerging Media Group, who owns Rajasthan Royals, was the

lowest bidder and paid $65 million to become the least expensive franchise in the eight-

team IPL. They didn‘t have high profile players in their team and nor had any

accomplished celebrity as brand ambassador. What they accomplished was by identifying

young talents through a Cricket Star Reality Show, nurturing them through proper

coaching and focusing on their objective of winning. Darren Berry, director of coaching

with the Rajasthan Royals had said in an interview that each of the players was assigned a

specific role to play during a match and they focused on their role and worked as a team

talking to each other in times of crisis. They clung together as a team: when their bagman

lost his mother but did not leave the tournament, all the players wore black bands in his

mother‘s respect throughout the tournament. Many prodigal players like Yusuf Pathan,

Robin Uthappa who will now be representing other team are discoveries of RR.

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(iii) Now let us look into how some of the players who were not picked up by any of the

franchisees in the auction. The top players who were left unsold in the auction with their

base prices are as follow:

Sourav Ganguly ($400,000)

Brian Lara ($400,000)

Chris Gayle ($400,000)

James Anderson ($400,000)

Graeme Swann ($400,000)

Luke Wright ($400,000)

Herschelle Gibbs ($200,000)

Graham Manou ($50,000)

Matt Prior ($200,000)

Mark Boucher ($200,000)

Dilhara Fernando ($100,000)

Ajanta Mendis ($200,000)

Chamara Kapugedera ($100,000)

Tamim Iqbal ($100,000)

Saurav Ganguly, aged 38 years has a good enough batting average of 27.07 and was captain of

Kolkata Knight Riders (KKR) for the previous three seasons but did not find any takers. Though

he recorded great performances in flashes in IPL but most of the time he seemed to stick to the

wicket at a low strike rate not letting other younger players to take the crease and increase the

pace of scoring runs. His batting strike rate of 109.09 is just same as the average batting strike

rate of present KKR team and lower than average strike rate of all other teams except Rajasthan

Royals (which is yet to build its complete team). Saurav Ganguly‘s bowling average is 24.48,

bowling economy rate is 7.73, bowling strike rate 19 and catche/stumpings per match is 0.362,

which is again comparable with averages of most other teams as can be seen from table 11.. His

age, batting strike rate and the fact that his leadership could not win even a semi-final berths for

KKR in any of the previous seasons worked against him. Brian Lara, aged 42 years has an

experience of only 3 matches in twenty-20 format with batting average of 33 and strike rate of

115.11. His age and inexperience in this format of the game, resulted in none of the teams

showing confidence in him. Similarly, Chris Gayle aged 32 years who represented KKR in

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earlier seasons has batting average of 30 and strike rate 140.16 higher than most players

auctioned and also is a useful part-time bowler but was not picked perhaps due to his rash play

and showing impatience when the team needed him to stay in the wicket for a while. Also he

participated in only nine of the matches out of fourteen which KKR played in the third edition

which is evidence of his casual approach in the field. Another surprise omission was Herschelle

Gibbs a wicket-keeper batsman with batting strike rate of 125.09 and batting average of 26.05 in

twenty-20 and catches/stumpings of 0.51. He was instrumental in Deccan Charger‘s winning the

league in the second season but did not perform well with Chargers in other seasons and has also

fallen out his national team, South Africa. His age at 37 puts him in the wrong side of thirty.

Also, his former team, Deccan chargers has opted this time for a very young team, (infact the

average age of the players is least as compare to other teams) and emphasized in getting good

bowlers. Another factor which remotely may have worked against him could be his being caught

in microphone in making racial comment against section of the crowd in a match in Pakistan

which resulted him being banned by ICC from playing couple of matches in 2007. English

Players like James Anderson, Graemme Swann, Luke Wight might not have been picked up due

to the apprehension that they may not fetch big money as they have domestic cricketing

commitments to keep during the IPL seasons. Paul Collingwood has reportedly said that England

players were less attractive in the auction because they are expected to play in at least one first-

class fixture before the first Test of the 2011 summer, against Sri Lanka at Lord's on 26 May –

meaning they will not be available for the latter stages of the IPL, which will run from 8 April to

22 May. Australian Player, Graham Manou‘s performance in twenty-20 has been rather

unimpressive with a batting average of 10.37. Dihara Fernando of Srilanka who played for

Mumbai Indians in earlier seasons has only one notable bowling figure of 4 for 18 again Royal

Challengers Bangalore which won him the ―Man of the Match‖ title. Similarly, Chamara

Kapugedera fate was affected by his inconsistencies in performance in IPL 2009 season for

Chennai Superking which found him no takers in the next two seasons. Ajantha Mendis had to

pay for having been picked for the 2010 season by the low performing team KKR, which did not

bring into limelight his performance. Tamim Iqbal of Bangladesh was not picked up for reasons

unknown even after Sachin Tendulkar had reportedly advised

Mumbai Indians to bid for him.

(iv) Andrew Symonds and Harbhajan Singh will both be playing for Mumbai Indians (MI) in

the IPL season IV. They are the players, who were caught in verbal racial argument

during an international match between by India and Australia some years back and were

reprimanded by International Cricket Council. Yet, MI represents city of Mumbai which

did not allow two foreign women to perform as cheer leaders during a match in the first

IPL season. It is strange how a game of cricket can mend feeling of cross-cultural

differences. The presence of the two players, both excellent all-rounders in their own

rights will add to the entertainment value. The performance of the KKR team in 2009

edition in South Africa was marred by charges of racial discrimination within team

members( http://cricket.zeenews.com/fullstory.aspx?nid=20167).

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REFERENCES

Karnik A (2010).Valuing Cricketers Using Hedonic Price Models, Journal of Sports Economics,

11, 4, 456-469

Vickrey, William (1960). Counterspeculation, Auctions and Competitive Sealed Tenders,

Journal of Finance, 16(1), 8-37.

McMillan, John (1992). Games, Strategies, and Managers, New York, Oxford University Press.

Rastogi, S.K., and Deodhar, S .K. (2009). Player Pricing and Valuation of Cricketing Attributes,

Vikalpa, 34(2), 15-23.

www.iplcricket.com

www.cricketfundas.com

www.espncricinfo.com/

http://www.iplcricket.com/

http://www.cricketfundas.com/

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auction of players in indian premier league: the strategic perspective