IPL News December 10, 2010

IPL player retention rules tilt level playing field


The Indian board's list of 12 players retained by their IPL franchises for the next two seasons is good news for those players because they can negotiate the value of their contracts with their respective teams. Yet the retention process appears to undermine one of the fundamental principles of the IPL so far - a common salary cap, and consequently a level playing field for the franchises - and also the BCCI's declared intention of a more transparent league.

The retention process allows teams to hold on to those players it deems crucial to their immediate future; these players are ruled out from the open auction to be held at some point before the next season. In return, the franchise's spending budget at the auction - a maximum of $9 million - will be cut for each player retained: $1.8 million from the cap for one player, $3.1 for two, $4 million for three and $4.5 million for the maximum of four players.

Unlike previous seasons, however, these figures do not correlate to salaries - and do not count towards the salary cap. Indeed, there is no salary cap at all. So the Chennai Super Kings, who retained four players, could hypothetically pay India captain MS Dhoni $3 million, and the other retained players $1 million each, making it a total of $6 million, but still only deduct $4.5 million from their auction pool. Likewise, Delhi Daredevils, who retained only Virender Sehwag, could pay him more or less than $1.8 million, without worrying about the impact on their ability to spend money on other players. The franchises do not have to make these contracts public either.

The process has given the franchises more flexibility, and the players the ability to negotiate their salaries without having to accept a winning auction bid as the value of their contract. Yet it seems to end the salary cap, a concept borrowed from American sport and touted by the IPL's former chairman, Lalit Modi, as a crucial part of its ethos. It is also being pushed by those seeking to reform European football, where the open system perpetuates the success of the big clubs. The cap effectively allowed the "smaller" franchise owners - Kolkata and Punjab, for example, to compete against the large business houses owning the Mumbai and Bangalore franchises.

The first auction, in 2008, had a salary cap of $5 million; the second in 2009 had a cap of $2 million. By the time of the third auction the cap had been replaced by a maximum signing amount of $750,000, with multiple bids heading into a secret tie-breaker. Two players - Shane Bond and Kieron Pollard - breached that figure; the final fee for each was never disclosed, known only to Modi and the bidders.

There is a similarity between the player-retention process followed in 2010 and the principle of icon players in the first auction - five players who were assigned to their "home" franchises and kept out of open bidding. Yet there's one difference - the salary of each icon player was calculated at a premium of 10 per cent above the highest price that franchise paid at the auction. Under the present system, such information is not disclosed.

That franchises don't have to disclose the amounts they are paying to this select group of players also creates a lack of transparency for a league that has been accused of not being transparent enough. In one of the first interviews after his appointment, IPL chairman Chirayu Amin said it would "maintain full transparency". By keeping the salaries of 12 coveted players secret, that promise would seem to be at risk.

Tariq Engineer is a senior sub-editor at Cricinfo

Comments have now been closed for this article

  • dummy4fb on December 13, 2010, 6:10 GMT

    Agreed to Yuri_Tard.

    The MI believe that Sachin, Pollard Harbajan and Malinga will deliver them again. But only consistent player in that line in T20 version is Malinga. Even there is no guarantee that he will deliver it this time. So Kolkata will definitely go for correct group with the interest his franchise had on cricket. I am happy to see some dark hourses firing against big names in next IPL sessions. I think CSK should definitely add Ashwin if they add three already, since he will cost them only additional 50k.

  • dummy4fb on December 11, 2010, 12:11 GMT

    Thnx to auhor for pointing another aspect of retention rule.: I hope gc will take ur word approprietly. But if u see i dont think retention fee wud b negotiable in case of other players like pollard, morkel etc, xcept of sachin and dhoni......... they hv paid already a whapping amount.

  • Nadeem1976 on December 11, 2010, 9:24 GMT

    What ever. Its all about money. No body talks about cricket in IPL. Just money. selling and buying player. So dis respectfull to cricket now that you sell and buy professional players by auction. What a joke this money can make a person to.

  • Dubby49 on December 11, 2010, 8:19 GMT

    Someone please correct me if I'm wrong. You have a notional cap of $9M, but you can actually spend as much as you like.Salaries are negotiable and have nothing to do with the auction price. Now what happens if a player purchased for 700k says he won't play for less than 2M or one purchased for 200K wants 1M? Presumably salaries cannot be negotiated before the auctions, so if the players demand more after it where does that leave the owners. Since there are two new teams, do they have first pick of four players each to bring them on par with those who had the retention option? I hope the franchisees know what's happening.

  • dummy4fb on December 11, 2010, 5:47 GMT

    Technically the retention of 4 players or non players would give a better option at least in the financial aspect. As retention on one two and three players would cost average player 1.8m,1.5m & 1.3m respectively. In case of MI the average player cost appx 1.1 M, which is a fair deal and now they have to seek for few more reputed players to fill the other positions. I personally feel that MI each players would cost at least 1.5 m in tender process based on their high profile. The people who have opted not to retail too are financially viable as they possess entire AED 4.5 M to make up the team. But the people like Sidath Malaya though he try to explain it like a genius strategy made fundamental error on spending on one player heavily. . They have 7.2 M only to make up basically full squad while MI need few exceptional and mainly more ordinary (Indian) players to make up a strong squad

  • Alexk400 on December 11, 2010, 5:45 GMT

    Wrong. The reason that rich team owners like Reliance can pay as much money they want if it only counts max of 1.8 million but he got paid 10million. Pollard will always prefer Bombay because he may get counter for 1.3 mil in salary cap but he can make as much as 5 mil if reliance ready to pay him secretly.

    It is like new york yankees again with deep pocket. Current BCCI governing body is clueless. They are messing up IPL.

  • dummy4fb on December 11, 2010, 2:41 GMT

    transparency in IPL is a joke

  • googletalk on December 11, 2010, 2:21 GMT

    This sounds a good move. Yes, I understand every governing body has its own problem and shortcomings; but atleast BCCI is a professional body solely responsible for cricket. Unlike some individual who doesnt care about cricket, but personal profit-glory-fame. Moreover, IPL directly run by BCCI means they will consider international cricket calender which is extremely important for keeping alive the sports called Cricket. Good to see BCCI finally stepped up and took control; which never to be handed over to any individual in a first place. Indian fans were so deluded, they even did accept desserting their one of the great Kapil Dev because of IPL. Hope everything is in order from now on.

  • CharlieAlanJakeHarperFamily on December 11, 2010, 1:02 GMT

    The undisclosed amount is a fair the contracts need not be made public ideally CSK has to pay $6million but they are paying $4.5million so its u say profit of $1.5million and even the franchisee is happy at retaining their as the brand is associated with them for 3 years and DHONI and SACHIN are infact the icon or brand value of respective teams

  • SudySriraman on December 11, 2010, 0:22 GMT

    I think the writer misunderstands how the salary cap promotes a fairer playing field. The actual amount that the players get paid is of merely academic importance, but the fact that their team has X million dollars less to bid on the others at the auction means that there is a limit to their maximum strength (barring foolish bidding by every other team which is unlikely) Teams like KKR and Punjab would presumably hope to create a more balanced and deep team compared to Mumbai and Chennai, who will rely heavily on their retained stars to deliver. With twice as much funds at their disposal, these teams have the option of paying each of their players as much as $800K, a sum that Mumbai and Chennai cannot match as they must create an entire squad with only $4.5m. This should be an interesting auction. Played right, the dark horses might find themselves with a strong and deep squad poised to dominate the next few seasons.

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