March 4, 2008

Silly money

What the IPL could have learned from Ben and Jerry

Ishant Sharma, worth $950,000, is the most expensive bowler in the IPL despite the fact that he has played only one Twenty20 international © Getty Images

In the 1970s, in Vermont, a guy called Ben and a guy called Jerry started an ice-cream company, which did very well. They had three things going for them that the established ice-cream companies didn't have: good ingredients (fresh Vermont milk and cream), innovative ideas (new flavours, pots with jokey blurbs, an annual free cone day), and high ideals. They had a rule that nobody in the company could earn more than X times what anyone else in the company was earning. According to the company website, X was five; other sources give it as eight, or even 22. But it doesn't really matter what it was. The point is that two dynamic young American entrepreneurs thought it was more important to pay everyone a decent wage than to line their own pockets.

Thirty years on, times have changed. Ben and Jerry's sold out to Unilever a few years ago, and the pay rule has been long since dropped. The reason the company gave was that it was no longer possible to make an "apples-for-apples comparison". Evidently the people who are now in charge would rather look weaselly than idealistic.

Ben and Jerry's came to mind at the weekend, as I was reading an interview in the Daily Telegraph with Lalit Modi, chairman of the Indian Premier League. We already knew that the fees paid to the big names were going to be mind-boggling, but Modi, interviewed by Simon Briggs, put it in a nutshell that was more dramatic than anything else I had seen. "We are working with private enterprise to change cricketers' lives," Modi said. "You take someone like Ishant Sharma: his father earned £75 a year and his whole family lived in a single room in Delhi. Now he's being paid £475,000 for two months' work. His life has changed, his family's life has changed, its wonderful to see."

If windfalls like this are going to happen to anyone, it's heart-warming that they should happen to a family that has had to live on so little. But the gap between those two figures is vertiginous. In the time it would have taken his dad to earn £12.50, Ishant will pocket 38,000 times that much. It makes you wonder if Modi might have been thinking of someone else: according to Tehelka magazine, the Sharmas are a middle-class family, with a daughter at art school, and Ishant's dad, Vijay, is an airconditioning dealer who is able to watch a lot of cricket on television because it's on in the winter when business is quiet.

Even if this is a case of mistaken identity, the wider point holds. The IPL will be paying gigantic fees in a country that still, for all its thrusting capitalism, encompasses a great deal of poverty. Three years ago, the average wage in India was said to be US$1,740 a year (£877 at last night's exchange rate). Sharma will pick up something like that every hour of the working day, even when just travelling or practising.

He is an exciting fast-bowling prospect, tall and spirited, but he is only 19, and he has played a handful of Tests and two handfuls of one-dayers. His career haul in Twenty20, the form of the game he will actually be playing for Kolkata, is one wicket. He is something Ben and Jerry would recognise: the flavour of the month.

You can't blame Ishant for not saying "I won't, thanks", and some players are getting even more - Mahendra Singh Dhoni is on $1.5m, Andrew Symonds $1.35m (would he have got more if he was on better terms with the Indian team, or less?), and Sanath Jayasuriya $975,000. The businessmen shelling out these sums are presumably not fools. But do they have any clue how cricket teams work?

Often, a star player makes little difference. We've all seen teams that mysteriously performed better when a big name was injured. Young fast bowlers get injuries, and even when fit, they are liable to get hammered round the park. Would you bet on Ishant taking more wickets in the IPL than Dale Steyn ($325,000) or Glenn McGrath ($350,000)?

The best thing about Ishant's lottery win is that the money has a good chance of staying in India. Perhaps Ishant will buy himself a few motorbikes, ready for the day when his parents allow him ride one. But most of these millions will be leaving India, filling the coffers of Australian stars who are already very highly paid. Money shouldn't travel in a direction like that. As recently as five years ago, there was an Australian captain - Steve Waugh - who made it go the other way, by helping to set up and fund a home for the daughters of lepers near Kolkata. By those standards these fees are disgusting.

The last time silly money surfaced in cricket was eight years ago, during the dotcom boom, when this very website was valued at $150m. There was a whiff of madness in the air then, which didn't last long: three years later, Cricinfo was sold for around $4m. It has since prospered, and rightly so, but it needed that jolt of reality. When Modi points out, triumphantly, that Aston Villa FC is worth £62m and his Mumbai franchise has just gone for almost as much, even though the team doesn't exist yet, you can smell that same whiff.

And someone always pays the price. In this case, it won't just be the players who get rich: it will be the agents. One British agent has 20 players in the IPL. Suppose he is on 15-per cent commission, which is a conservative estimate: he will be earning three times what the average player is getting. If Modi thinks he is doing everyone a favour, he is making another mistake. He is making the rich richer, and launching a new era of player and agent power. Some of the administrators he is emasculating have had it coming to them; others are decent people who deserve better.

The IPL is a new flavour that Ben and Jerry might approve of. But where they managed to mix some ethics into their entrepreneurialism, Modi has so far offered only a few self-imposed limits, like the $5m team wage cap, which he shows every sign of abandoning next year. The words "free for all" appeared in the Telegraph piece, and they weren't uttered by the reporter. All the research into national happiness suggests that the happiest countries are the ones with only mild extremes of wealth, and here is a country with much sharper contrasts making them sharper still.

Whether the IPL works will be fascinating to see. Meanwhile cricket finds itself in an eerie limbo. A tidal wave is heading towards us, with one unusual property for a tidal wave: it's coming in slow motion. We know something big is going to happen, and we know when, but we don't know how big, or what the damage will be. If you see a lifebelt, grab it.

Tim de Lisle is the author of Young Wisden. His website is

Comments have now been closed for this article

  • Tushar on March 6, 2008, 11:27 GMT

    Why is everyone drawing parallels between IPL and EPL? players in EPL are entitled to the money they earn because they play better game and entertain better crowd. The crowd pays money to watch the game, the sponsers shell out good money hence they get fair share of the money the clubs get... and its an open market. Its not the case in India, they should pay the cricketers in some thousands and whatever money is left, they should hand over to ICC, which can then be used to pay salaries and some decent bonuses to the office bearers. Congratulations Tim on your fantastic article.

  • Saibaskar on March 5, 2008, 13:44 GMT

    IPL for the first time is visibly shifting cricket's power center to Asia to be precise India. India is the financial engine for Cricket currently but BCCI's incompetency meant the real power (from appointment of match officials to deciding where cricket headquarters should be located) remained with England and Australia. IPL would finally change that, it would bring cricket to the place where it is watched with passion. It will also change cricket which being a sport with hardly 5-6 decent teams was getting too boring with too much predictability. Now, IPL can only become bigger, accomadate more teams with nearly equal quality meaning high quality games. It will also soon emcompass other versions of the game (atleast ODIs).

  • akash on March 5, 2008, 5:17 GMT

    There is no need to be jealous at the amount of money that the Indian cricket stars are earning. Comparing the total number of people they entertain and make happy you see that even people like Kaka or Federer may be lesser stars. Why none is complaining of IT/MBA professional earning huge amounts despite their expertise being of use only to a few in their employer company? And about lot of us being poor, it is the fault of the government which follows capitalist policies inspite of having a constitution that promises a socialist welfare state. The disparity between the poor and the rich can only be lessened if the Government is prepared to tax the wealthy alone and spend on uncorrupted welfare schemes for the poor. As far as the comparision between Steyn and Ishant is concerned, the concept being new the teams have spend/risked more on Indian players but after one year, the really well performing players will begin to get better deals like in all professional leagues in the world.

  • akash on March 5, 2008, 5:01 GMT

    There is no need to be jealous at the amount of money that the Indian cricket stars are earning. Comparing the total number of people they entertain and make happy in India you see that people like Kaka or Federer are lesser stars. And about lot of us being poor, it is the fault of the government which follows capitalist policies inspite of having a constitution that promises a socialist welfare state. Why none is complaining of IT/MBA professional earning huge amounts despite their expertise being of use only to a few in their employer company?

  • Mohan on March 5, 2008, 4:18 GMT

    When the author says that money shouldn't be going out of a poor country like India, he probably doesn't realise that money is already flowing out of India at a much larger scale because of international cricket. ICC alone makes upwards of $100 million per year from Indian market. All the other boards make money from Indian market too. If anything, IPL will stem that outflow of money and make sure whatever money that is generated stays within India. 20 million or so paid to the 50 foreign players is nothing compared to the kind of money various boards are looting from India at present thanks to international cricket.

  • ari on March 5, 2008, 0:12 GMT

    Tim's thoughts are little short sighted. What he is missing within the griping about high salaries for the players is the future for some the cities. No one complains here in america when our stars are signed for insane salaries because we known that it will trickle down. High taxes and a cottage industry of restaurants, bars and shops will spring up in the surrounding area of the stadiums to return dividends to the city. This will hopefully be a start for the city planners to develop areas for the residents to enjoy. In india, nothing other than cricket would be able to sustain this (i.e. soccer in usa, basketball or hockey in india). Let's face it cricket in britain is no where close to soccer in its ability to stimulate local economies. Communist or socialist style ways to improve society has been a failure for the most part and is not the way to lift people from poverty. Hopefully entrepreneurship and capitalism will take hold in this region.

  • P on March 4, 2008, 22:27 GMT

    I don't see that the IPL model is going to work. The creators did not put a lot of business thought into it. I am strong believer of capitalism and disagree the socialistic approach of distributing money discussed in this article. IPL is not following capitalistic principles. Capitalism pays for what is one's actual networth. The irrational models used in determining a players worth (Styen vs. Sharma)is where IPL is not using capitalism properly. Not applying capitalism principles is why IPL model will either fail or undergo rigorous restructuring. Players and agents will be the beneficiaries in between.

  • Subhadeep on March 4, 2008, 20:40 GMT

    "The IPL will be paying gigantic fees in a country that still, for all its thrusting capitalism, encompasses a great deal of poverty." --- What a load of patronizing claptrap! By that logic, CEOs, technical professionals, movie stars, doctors, high flying businessmen in India should ALL take gigantic pay cuts to satisfy the moral dilemma and righteous indignation felt by armchair moralizers. Should India put ALL development in ALL fields on hold, till the average wage in India equals that of the United States or UK? Is the BCCI responsible for eradicating poverty in India, or the ECB for homelessness in the UK, or CA for destitution among Native Australians? One can debate endlessly about the affect Twenty20 will have on India's cricket talent pool, but to drag the country's socio-economic situation into this argument is totally disingenuous and condescending.

  • wilson on March 4, 2008, 19:46 GMT

    Thank you Tim for bringing this up. My question certainly has been , in a country where close to 40 % are below the poverty level , where is this insane money coming from. If you have money improve the lot of the poor and also improve the facilities for the athletes and people of India. Many women still complain about the facilities in the stadiums etc. That amount of money is going to go outside the country. And to boot it they are banning ICL players etc. This has to be stood up to. If BCCI gets away with these, We cannot imagine where things will be in the future.

  • Sanjay on March 4, 2008, 18:40 GMT

    BCCI, just a registered body with no accountability, earns hundreds (or thousands!) of crores from the public and where does all this money go? To the players and for betterment of only cricket! Is it worth? Do a handful of players deserve to get such a mind boggling amount of money, notwithstanding the fact they bring glory to the country (occasionally!)? BCCI has no right to throw away public money in such a blatant manner! There should be a serious debate on how to manage BCCI funds. I feel this is time for the right people to wake up and stop this shameful show of money power which is making only the rich more richer!

  • No featured comments at the moment.