Some thoughts on IPL player pricing

Explanation about 'market dynamics'

Every year following the IPL Auction there’s huge debate surrounding the pricing of players. Some players will be sold for far more than many anticipate, while others are sometimes surprisingly lacking demand.

The mini auction, which takes place tomorrow, has an even more wild dynamic compared to mega auctions (last took place ahead of the 2022 season). This is simply because often there aren’t many players with the specific skillset which a team has identified that is a ‘must have’ for them.

What a lot of people struggle to understand (even high profile ex players in the media often can’t get their heads around this concept) is that player pricing and demand isn’t necessarily a market consensus of the ability of a player. If a player is unfortunate that they have a skillset which is commonplace in the market (e.g. overseas top order batter who doesn’t keep or bowl) then there’s often a ceiling on their value.

Even this morning an agent has been in touch offering several players for one of the teams I work for. They are very, very good players, but we’ve identified different skillsets/playing roles as more of a priority currently. It’s important to stick to the gap analysis identified.

There are market exceptions to the abundance/scarcity of skillset point of view, such as Harry Brook last year, but he benefited from recency bias - and he may well do the same this year after his stunning cameo in the third T20i against the West Indies at the weekend.

Some of the more successful teams have acknowledged this, and have looked at often cheap overseas solutions, knowing that the overseas players they can pick up for base price or slightly more are ‘almost’ as good as the marquee names who will cost far more.

Conversely, domestic players who have playing roles which aren’t abundant in the auction list can fetch prices in excess of what many will anticipate. Again, this doesn’t have to reflect an accurate measure of a player’s ability, because teams have the potential to panic and make emotional decisions when they see they don’t have many options.

A few potential examples of this dynamic tomorrow include the capped domestic batters Manish Pandey and Karun Nair in set 1. They are the only two domestic batters featuring in the first 5 sets (36 players). So a team might set out their stall to get that role ticked in their squad early in the auction process, valuing certainty over price point.

This could also be the case for several domestic bowlers/all-rounders in set 2, namely Shardul Thakur and Harshal Patel. They are basically the only domestic options for that type of role with considerable experience in the auction pool.

Personally, I’d probably be less keen than many teams will be for these four domestic players (particularly the two batters), but that doesn’t mean that I can’t acknowledge that there will may be strong demand for the quartet. The only thing that might dampen teams enthusiasm for them is the impact player rule, which has the potential to reduce the necessity for these players. However, teams are still working out optimal usage of this rule, so it’s certainly not a given.

Moving on, a question I get asked a lot on social media is along the lines of ‘how much is player X worth’? It’s impossible to give an answer here, because ‘it depends’ doesn’t really cut it.

Teams should have prepared detailed analysis of the auction list in advance of the auction (not a given, I’ve seen a high profile coach in auction rapidly hunting on Cricinfo for a player’s profile!) and should, if well prepared, have robust depth charts to help them understand players as resources available to them.

Due to the composition of their retained list, a player’s value for one team is going to be different to that player’s value for another team, because one team might be needing that type of player so much that the player becomes a ‘must have’ for them.

Let’s use Rajasthan Royals as an example. They have accumulated some decent depth of domestic pacers (a good strategy in my view). Harshal and Shardul are likely going to be of less value to RR than they might be to other teams. Likewise, some of the potential high price overseas pacers such as Pat Cummins, Gerald Coetzee, and Mitchell Starc, might be less valued by RR than they will be by other franchises.

Not only this, but good players can be worth zero in the marketplace. This is simply because they are a fair distance down a long list of players in teams depth charts due to their abundant skillset.

I’m very comfortable with saying that player X has no value to me for various reasons, yet it doesn’t mean that they’re not a good player, or that other teams won’t value them. Simply, my analysis might suggest there are many better options. A common misconception is that a player might be perceived to be good value at base price, but if that base price is fairly large (e.g. 2 Crore or 1.5 Crore) then it can have considerable impact on future auction decisions.

A good example of ‘must haves’ would be a top quality leg spinner. There are fewer top quality leg spinners in the retained list and auction list combined than there are teams, and it’s widely acknowledged that a top quality leg spinner is not far off mandatory for roster construction. It is this exact reason why I think Wanindu Hasaranga (who also offers batting and fielding ability) should be in demand tomorrow, and the team fortunate enough to win his services in the auction could very well have to pay a big fee for that privilege.

‘Must haves’ should be a term used sparingly by teams. There are very few examples of players for a role where there are non-negotiables. Again, emotion and stress can play a major part in player valuation.

Of course, player valuation is a relatively inexact science. Having said that, there are actually some pretty reliable methods available for teams who think outside the box in how they approach the process.

Consistently in player sales events (drafts and auctions), it has been possible to identify the vast majority of players who will be prominent in the marketplace. I have first-hand experience of this in both The Hundred drafts and also in the mega auction in 2022, where an anticipated player sales list generated slightly below 90% accuracy.

It’s also possible to use player valuation methodology to establish a likely market value for players, and which players are more likely to have a higher variance in their price. The players who could have this higher variance tomorrow in the auction will likely 1) have recency bias on their side e.g. Phil Salt, Rovman Powell, Gerald Coetzee, Rachin Ravindra, Travis Head, Gerald Coetzee and/or 2) possess rare skillsets in the auction list e.g. Shardul Thakur, Harshal Patel and Wanindu Hasaranga and/or 3) beneficial auction position e.g. Manish Pandey and Karun Nair.

Valuation on auction positioning can work several ways. If a player is the only one, or one of a few for their skillset at the top of the auction, teams might be looking to get that skillset sorted quickly and overpay for that surety.

Alternatively, if the skillset is abundant (e.g. overseas one skillset batters) then they might be overlooked early in the auction and then brought back in the accelerated phase of the auction.

Prominent players are sometimes auctioned further down the list. A few examples of players this year who this applies to include Shahrukh Khan (set 7) and the plethora of overseas all-rounders in set 12, which is such a big set of players that the draw order for the set will also have major influence.

This can work one of two ways in terms of pricing. If there is a hard-fought battle for players in the first few sets, there might be bargains to be had further down the list because teams have spent the majority of their budget. Conversely, these players in lower sets can also sometimes represent ‘safety net’ options for teams, and then that develops into a fight for that player further down the list and the player can benefit financially from that scrap for their services.

I hope this has been useful for readers ahead of tomorrow’s IPL Auction, and anyone interested in discussing how I can help their team with strategic consultation and data-driven analysis, or contribute to any media work, can get in touch at sportsanalyticsadvantage@gmail.com.