Decoding the Game of Demand and Supply

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IPL Auction 2024 was a blockbuster. The paychecks of players in this year’s auction got fatter than ever. The amounts some players received were massively blown out of proportion as each team chased their target players with each bid matching head to head. Not just international players, but uncapped Indian players aged under 23 also recieved a dream amount. A total of 230.45 crores was spent on 72 players.
Australian pacer Mitchell Starc became the most expensive player in the history of the Indian Premier League (IPL) when he was bought by Kolkata Knight Riders for a staggering ₹24.75 crore at the auction in Dubai. This purchase surpassed the previous record held by his teammate Pat Cummins, who was sold to Sunrisers Hyderabad for ₹20.50 crore.

Many experts and former cricketers questioned the money received by the Big Australian quicks and other big overseas names. Even some experts tried to make a point that the franchises must limit the amount spent on foreign players. Many made a point of comparing the money received by the current players with retained players like Bumrah, Kohli, and others. Akash Chopra made a baseless argument that if Kohli was in the auction he would have received ’42 crores’. People on social media started comparing the prices of Bumrah and Cummins, calling the former massively underpaid.

Requirements and Team Dynamics

To first understand the auction dynamics, it is very wrong to compare the quality of players based on their prices. IPL Auction is simple economics. It is a game of demand and supply. It is upon the structuring of teams and the areas they need to cover before the ultimate showdown. It is upon the budgets of the team and the spots they need to fulfill. Prices never determine the quality of a player.
Consider a team like KKR who had their batting core sorted with most of the players picking themselves. The Knight Riders had settled and reliable spinners in their group. The only major area of concern was their fast bowling. So considering the ‘requirement’ of the side and with all other bases covered, they could go all in for ‘one fast bowler’ to stabilize the team. And they did so in style. They bought Mitchell Starc for a whopping historic price of 24.75 crores. While one may argue that Starc is massively overpaid, the requirement of the franchise and the demand for the skillful fast bowler in the market inflated the price of Starc. It is the need of the team that made the price swell up. The price of Mitchell Starc had more to do with the needs that the market possessed rather than his skill.

Let me tell you another story that tells us that prices do not determine a player’s caliber, it is the market need that inflates or deflates the price. Dynamic South African Left-handed batsman Rilie Rossouw was sold at 9 crores after being unsold in the first round. The deal kept swinging back and forth between Delhi Capitals and Punjab Kings, where Punjab pipped over the Capitals eventually. Had he been worth that price, he wouldn’t have been unsold in the first round itself. As the first round got over, teams got a hang of their squads and could narrow down their requirements according to their budgets. Once they could understand their area of concern, they could aggressively go for him to fill the requirement for that particular batting spot without worrying about budget.

Domestic Uncapped Players enjoy a massive rise

In the IPL 2024 auction, several uncapped players garnered significant attention and impressive bids. Sameer Rizvi, a right-handed batter, emerged as the most expensive uncapped player, fetching a bid of ₹8.40 crore from Chennai Super Kings after a fierce bidding war. Shahrukh Khan, known for his hard-hitting batting style, attracted a bid of ₹7.40 crore from Gujarat Titans. Kumar Kushagra, an uncapped wicket-keeper batter, saw Delhi Capitals secure his services for ₹7.20 crore after a competitive bidding process. Shubham Dubey, a left-handed batter, joined Rajasthan Royals for ₹5.80 crore following an intense bidding war with Delhi Capitals. Additionally, Lucknow Super Giants acquired the services of uncapped spinner M Siddharth for ₹2.4 crore after a fierce bidding war with Royal Challengers Bangalore. These acquisitions underscore the rising value of uncapped talent in the IPL and the teams’ willingness to invest in promising players.

This year saw a steep rise in pay for young domestic talent. In today’s era with the coaching staff and the facilities available to players, the players mature quickly within a season or two. These prices may seem very high today, but franchises might look at them as investments to nurture and groom the players. Once they mature and fit the team dynamics, it is an invaluable return on their investment. The franchises also have camps off season for their players and are constantly in touch with the expert coaching staff. These initial efforts might have a long lasting and legacy changing impact on the franchise. The scouting quality has drastically improved and there are scouts who attend even the smallest of club cricket tournaments. They have an eye on budding young talents in the country and immediately pass on the information to their respective stakeholders. So there is a tremendous amount of information about a player with the franchises before the players go under the hammer.

False Bidding

One of the major reasons for a high price rise is that they aggressively bid for a player to falsely inflate the price. If a franchise is looking after a particular player, then the other franchise will create an unnecessary hike to raise the bidding. This might disrupt the budget of the teams and the other franchises benefit from the inflation caused. For example, RCB kept bidding for Pat Cummins till their purse got under 3 crores so it raised the price of Cummins to sky high. They never could have bought other 8-10 players with the remaining purse of 3-3.5 Crores. It might be a strategy to create an unnecessary hike in the price to disrupt the budget of other teams. This approach has led to depleted purses for rival teams, allowing them to secure desired players for relatively lower prices compared to their market value.

To summarise, the extrinsic value (requirement of teams and the market scenario) determines the price of players rather than their intrinsic value. A high price does not mean the best player and a low price does not mean that the player is average. So it is completely baseless to evaluate a player by stats like money earned per ball or money earned per run. It is very immature to compare the quality of the players based on their prices. In the end, it IPL Auction is a simple game of demand and supply and nothing else…

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