Home / Sports / Cricket News /  IPL is drowning in cash, but what about the cricketers?

The sale of two new franchises last month has set new valuation benchmarks for Indian Premier League (IPL) teams. Next up is the player auctions for the 2022 season. But should cricketers expect to earn a share of the IPL franchises’ growing riches?

The 10 franchises will build their teams mostly afresh, with each allowed a maximum purse of 90 crore. This is just 6% more than in 2021. When the IPL started in 2008, this purse was 20 crore per team. A 4.5-fold increase in player salaries in 14 years may seem generous, but the IPL ecosystem has grown far more than that in this period.

The teams’ auction purse has grown bigger at a compounded annual growth rate (CAGR) of 11.3% since 2008. The spikes occur when the number of teams increases (2011) or when the Board of Control for Cricket in India (BCCI) strikes a new broadcasting deal (2018). In comparison, the sale of broadcast rights, the proceeds of which are divided equally between the BCCI and the teams, has grown at a CAGR of 19%.

Two other metrics of financial health—team revenues and valuations—have grown at 28% and 37%, respectively.

Thus, while more money is flowing in, it’s the BCCI and teams that are pocketing more than the players. The BCCI is also tasked with developing the cricketing ecosystem in India. But going by the limited data available, this is not where this new flush of money is going.

Shrinking Share

Indeed, player salaries as a share of team revenues are declining. Take Kolkata Knight Riders (KKR). In 2010-11, the franchise earned revenues of 62 crore, and paid its players 28 crore, or 46% of its revenues. Over the years, both these amounts increased. Its revenues doubled after the new TV deal that began in 2018. Thus, in 2018-19, KKR earned revenues of 448 crore, but paid its players 72 crore, or just 16% of revenues.

By comparison, in European club football, the wage-to-revenue ratio of the top 20 tier-I leagues ranged from 53% to 79% in 2018-19, according to UEFA, the sport’s governing body. The BCCI and the franchises can expect another revenue jump in 2023, when the next five-year broadcasting cycle begins and is expected to double from current levels of 3,270 crore a year. This is set to lower the player salary share further.

Below the Cap

In the name of ensuring parity, IPL rules neither give players the rights to choose their team or negotiate their salaries. Although there is a window for player trades, transfers between teams are rare, and cannot be initiated by players themselves. Indian all-rounder Ravindra Jadeja was penalized with a year-long ban in 2010 for negotiating a higher salary with other franchises.

The salary cap places a ceiling on how much a franchise spends on its entire squad, of a maximum of 25 players. While total squad spending across franchises is roughly in a broad range, franchises such as Rajasthan, Punjab and Hyderabad have consistently spent less than the maximum permissible cap. In 2014, four of the eight franchises operated at the salary cap. In 2018 and 2021, only Bengaluru operated at the salary cap. The other franchises spent even lower, some marginally and some significantly.

Distribution Pyramid

Meanwhile, squad salaries are themselves unequally distributed. For instance, Virat Kohli alone earned 20% of Bengaluru’s 85-crore purse in 2020. The bottom 10 players accounted for just 3.5%. A similar distribution exists across franchises. However, there are instances like Delhi in 2020, where the disparity between the top two rungs is marginally lower.

The reserve price for uncapped Indian players, who are at the bottom-most rung, is 20 lakh. Less heralded but promising players like Devdutt Padikkal and Ruturaj Gaikwad are often purchased at their reserve price. The annual retainer for Indian women cricketers is at similar levels: 50 lakh to three Grade A players, 30 lakh to 10 Grade B players and 10 lakh to six Grade C players. Given the sizable gains the BCCI is accruing, it could be sharing more with those who make the show—the players.

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