Deconstructing cricket May 15, 2018

Why does the IPL use an auction to buy players?

For the made-for-TV drama, and the fairness and competitive balance brought about by salary caps and minimum-spend stipulations

Bidding wars, right-to-match-cards, ramping up the price of a player wanted by a rival franchise - it all makes for a great spectacle © Associated Press

On February 20, 2008, some of India's richest businessmen and biggest Bollywood stars lined up at the Hilton Towers hotel on Mumbai's western waterfront at 11am. By the time they left that afternoon, they had spent US$42 million on contracting 78 players for a seven-week tournament.

Cricket had entered a new age of T20 leagues. Those who would thrive were the teams who could make the smartest decisions - not just in the seasons themselves, but as importantly, before them, when assembling their squads.

In this way, T20 leagues came to resemble other sports. In American sports - American football, baseball and basketball - players entering the professional game are selected through a lottery draft system, which was first used by the National Football League in 1936. Each player is paid a salary according to which round they are selected in in the draft. The drafts are televised live and, for many fans, are more important than any matches themselves; last month, 45 million watched some of the 2018 NFL draft.

But even US sports leagues do not use a player auction like the IPL does, where the auction acts not merely to allocate player talent but to be "the opening episode in the new series of the soap opera," as Andrew Wildblood, the former executive vice president of IMG and joint architect of the IPL alongside Lalit Modi, later explained. "The auction is the best possible trailer for the new series."

When the IPL organisers were first discussing what format to use to allocate players, they discussed other options, including a US-style draft and no formal system at all - allowing teams to negotiate privately with players as they saw fit, as in Premier League football and in domestic cricket. The auction was considered ideal not simply because of the hype it would create ahead of the new season but also because it was the most transparent, and minimised the chances of illicit payments to players. Imposing both a salary cap and a minimum spend on each team ensured that all squads were roughly evenly matched, creating competitive balance.

Perhaps nothing is as important as the auction in determining teams' fates. The IPL has operated "big auctions" in 2008, 2011, 2014 and 2018 - when each team was only allowed to retain a small number of players. A bad auction, then, does not merely set a franchise back a season; it can result in four miserable years.

And a good auction - not outspending the competition, but out-thinking them - can set a team up for great success. In 2008, Rajasthan Royals had the lowest salary expenses of any side, but put the greatest care into how they spend their cash, signing Shane Warne as captain.

Shane Watson was not even bought at all in the main auction that year but Rajasthan identified him as a player who could bat in the top four and regularly bowl four overs. He was signed for $125,000 and was Man of the Tournament; Rajasthan, with the lowest budget of any franchise, won 13 out of 16 games and the title. It remains a lesson in how shrewd auction strategy can help teams overperform their budgets.

With every year, teams are taking preparation for the auction more seriously. Teams spend months honing their strategy - using a combination of scouting and statistical analysis to prepare and identify undervalued players. In 2015, KC Cariappa, a mystery spinner who had never played a professional match, promoted a bidding war, and was eventually sold to Kolkata Knight Riders for $400,000.

Teams conduct mock auctions to prepare for how to deal with the unique dynamics of the day and second-guess what other teams are most likely to do. Before this year's auction, KKR used a computation system to rank players and their worth; Rajasthan used a game-theory model, as Mike Atherton noted for the Times. Sides are not merely preoccupied with the players they want, they are just as worried about what everyone else wants. Tom Moody, the Sunrisers Hyderabad coach, has revealed that it is commonplace for sides to bid for players they don't particularly want, in the hope of starting a bidding war and ramping up the price to leave their rivals less cash to spend elsewhere. In "big auctions", the right-to-match (RTM) rules add another wrinkle: each side is permitted to use this option to retain a small number of players (this year, each team was allowed to retain a total of five either before the auction or using their RTMs). If sides suspect that a rival team is keen to retain a player - as Hyderabad were with Rashid Khan this year - it is in their interests to bid aggressively; four others bid for Rashid, but Sunrisers still retained him. Whether or not they have any interest in a lot, each side pays meticulous attention to it, knowing how it can influence the rest of the auction.

In the auction room, most sides have around six people at their table - typically the owner, the head coach, and a range of support staff and analysts. Normally the owners themselves bid for players and make the final call - generally in accordance with the wishes of the head coach, but occasionally subverting them. Recall the look of horror on Stephen Fleming's face last year, after Rising Pune Supergiant bought Ben Stokes for over $2 million. Sporting considerations can still sometimes be trumpeted by commercial ones, as in cases where an owner favours players more likely to open up extra sponsorship opportunities than an unobtrusively effective player.

Teams' emphasis has shifted from the biggest stars to the most effective T20 cricketers in Indian conditions. In 2008, Royal Challengers Bangalore famously assembled a formidable Test team - including Rahul David, Shivnarine Chanderpaul, Jacques Kallis, Mark Boucher, Anil Kumble and Dale Steyn - but found that it was ill-suited to T20; they came seventh out of eight sides. Now what matters is a player's T20 numbers - and as D'Arcy Short and Jofra Archer have showed this year, sides are often preoccupied with how players have performed in their most recent matches. Some analysts believe this emphasis on recent performance has actually gone too far, and that teams are guilty of recency bias, in overvaluing - and overpaying for - those who excelled in the weeks leading up to auction day.

For all the science that goes into preparation, there remains a fundamental randomness to the auction. Indeed, this uncertainty is wired into the process - in which the simple luck of the lots can make millionaires. What round a player is allocated to (there are eight players in each round) is vital to their price; if a player is put in a later round, they are likely to fetch less cash, as teams won't have much money remaining. In 2011, Chris Gayle wasn't bought at the auction at all, but after being picked up as an injury replacement, he was eventually named Player of the Tournament.

Even where players are drawn within a particular round is crucial: if teams want an overseas wicketkeeper, say, and have several attractive options, whoever happens to be drawn first stands the best chance of being signed. Smaller auctions, when fewer elite players are available, are the most unpredictable, and the most likely to lead to dizzying prices - like the Rs 12 crore ($1.75m approximately) that Tymal Mills fetched last year, after only four T20Is. He played only five games in the season and was not signed at all in 2018.

After this season's auction, Heath Mills, the chief executive of the New Zealand Cricket Players Association, attacked the auction system as "archaic and deeply humiliating for the players, who are paraded like cattle for all the world to see", and advocated that it be replaced by a draft system like in US sports leagues. Yet the point of the auction has never been to deliver the fairest or most efficient allocation of players but rather the most exciting. In this sense it remains the perfect prelude to each IPL season. And while teams have Rs 80 crore ($12.5m) to spend at the auction, the players are unlikely to complain.

The rise of auctions and player drafts, and the sheer explosion of cash in T20 leagues, has led teams to think more deeply than ever before about how to evaluate a player. And yet, for all the algorithms, the brilliant cricketing minds, and the pre-day preparation, a fundamental uncertainty remains. Just as choosing a player is part art, part science, so the same is true for how you decide how much a cricketer is actually worth.

Tim Wigmore is a freelance journalist and author of Second XI: Cricket in its Outposts