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THE INDIAN MONEY BALL

The entire nation has been severely affected by this ongoing pandemic that has locked everyone indoors. The one source of entertainment that every individual was looking forward to as a respite from this stress of the pandemic was the “Indian Premier League”. After a long wait, their prayers were finally answered and the league decided to hold the competition this year.


IPL has been the talk of the town for a very long time now. IPL certainly is a business that most people want to know about. There is absolutely no doubt about the fact that when we are talking about the Indian Premier League, it is not just cricket. It’s a whole lot more. With the money flowing in all directions, IPL is not just a league, it’s a business. As per BCCI’s projections, 95% of surplus revenue earned by the board comes from IPL which in absolute terms is over ₹ 2,000 Crores. A humongous amount earned in a mere 2 months’ time.


Not just the BCCI, but also the team owners earn a huge sum through sponsors, ticket sales, media rights, prize money, etc. However, while earning this fortune they have to spend extravagantly on acquiring and building their team too. That’s right, the Players – The heart of this league earn a handsome sum to play for a franchise. For IPL 2020, more than ₹ 600 Crores were spent on buying and retaining players across all franchises during the auction.

This entire concept of bidding for players, deciding a base price, deciding an upper cap etc, has sparked an interest in the minds of the viewers. There are millions of people throughout India holding their own auction events at home within their circle. This event has been trending a lot off lately.

However, the question that always persists in everyone’s mind is that: Should I pay this much for a player? Is this the right value to bid for him? When Virat Kohli earns ₹ 7 Crores to play for Team India for an entire year, should he be paid ₹ 15 Crores to play for Bangalore Franchise for just 2 months? Why is there a great disparity between the two, when clearly he should be paid less for the latter event.


Well, worry no more since we’ve come out with our own Statistical Valuations explaining all the intricacies involved which are based on several Performance metrics, Marketability metrics and Player position metrics. Giving an all-round valuation of each player of the 4 most popular teams with the highest fan following on social media, namely: Mumbai Indians, Chennai Super Kings, Royal Challengers Bangalore & Kolkata Knight Riders.


Valuations Ascertained:

Assumptions:

All Untested Players, i.e. Players who were bought at base price and have never played a single game in IPL have been assumed to be rightly priced. Hence, they do not form a part of our valuation process.


Metrics used for Valuation:

Analysis:

Upon observation of the above valuation chart of the 4 teams, it is understood that even though the teams have been spending tons of money behind players, which from an outsider’s view seemed to be way over their fair value it turns out to be actually the opposite. Each of them have UNDER-SPENT on a team level. There might be few players overvalued, few players undervalued however in totality it shows that no team has been over spending and that each of them have studied and crunched enough numbers in the auctions to receive more than what they’re actually paying for. However, CSK and MI turn out to be the smarter ones by being able to buy/retain talent worth a surplus of ₹22 and ₹15 Crores respectively.

At team level, we don’t see any overvaluation that might have taken place, but let's take a deeper dive into these numbers and analyse each of the 4 roles to understand if the teams could have saved more or if there are a certain group of players that are outperforming others even though they were paid less.


Wicket Keeper:

Favourites : Consists of players who were paid ₹ 5.00 Crores or more.

Underdogs : Consists of players who were paid ₹ 1.50 to ₹ 5.00 Crores.

Favourites' average performance is compared to Underdogs' average performance.

Batsman:

Favourites : Consists of players who were paid ₹ 5.00 Crores or more.

Underdogs : Consists of players who were paid ₹ 1.50 to ₹ 5.00 Crores.

Favourites' average performance is compared to Underdogs' average performance.

Bowler:

Favourites : Consists of players who were paid ₹ 5.00 Crores or more.

Underdogs : Consists of players who were paid ₹ 1.50 to ₹ 5.00 Crores.

Rookies : Consists of players who were paid ₹ 0.50 to ₹ 1.50 Crores.

Favourites' average performance is compared to Underdogs' & Rookies' average performance.

Note: Lower Economy, Bowling Strike Rate & Bowling Average means better performance.


All Rounder:

Favourites : Consists of players who were paid ₹ 5.00 Crores or more.

Underdogs : Consists of players who were paid ₹ 1.50 to ₹ 5.00 Crores.

Favourites' average performance is compared to Underdogs' average performance.

Interpretation:

The data clearly shows that players that were bought for much lesser value (The Underdogs and The Rookies) have either performed at par or above par in almost all performance sectors.

The Underdog Wicket Keepers had better strike rate, stumping rate and team contribution than Favourites' Wicket Keepers.

The Underdog Batsmen had better strike rate and finishing rate than the Favourites' Batsmen.

The Rookie Bowlers outperformed Favourite as well as Underdog Bowlers in Economy. (Which is one of the most important factor in bowling.) So basically, Players which costed the team a mere ₹ 50 Lakhs, played better than the bowlers that costed the team over ₹ 5.00 Crores.

Underdog All Rounders outperformed Favourites' All rounders in bowling sector, however in batting roles, they were subpar.

Conclusion:

From above tables and valuation charts it has become abundantly evident that a player with higher bid price is not necessarily performing better. All Underdog players were equally talented to contribute for their team but the only difference was that they demanded a cheaper bid price. This kind of selection process of selecting more of such Underdog Players that deliver performances as good as Favourite players is all about Scouting. Just as it was in Money ball, scouting for the right talent at cheaper prices is half the battle won.

However, having the right mix of Favourite Players and Underdog Players is also of great importance since the Favourite Players bring in tons of experience with them and a great deal of decision making abilities. And after carefully considering all this, the franchise that is able to build a good team with maximum savings is the team that has outsmarted all others and is on the right road to victory.

At the team level, Chennai Super Kings & Mumbai Indians are the only teams with such high levels of savings (Under spent amount), making them the smartest of the lot on paper. Ironically, these are the two teams, who have won the most number of IPL titles (CSK - 3, MI - 4). Coincidence ? I THINK NOT.

Valuation Process

The process included studying last year’s performance of all the players (in few cases, performance of their last played league), drawing out comparable statistics which were then compared with the team averages and comparable set averages to find out a base valuation that the player should have received based purely on his performance and role. Post this, certain marketability premiums, captaincy premium and other skill based premiums were added to it to make sure that the players’ valuation was not just based on his performance on field but it also factored in the revenue that he generated for the franchise by being a part of the brand commercials, etc. This fair valuation was then matched with the actual price for which the player was bought to understand if the team over paid or under paid for him.


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