The latest round of auctions of the Indian Premier League (IPL) have thrown up what appear to be surprising valuations for both domestic and international players. But individual cases aside, the larger trend is quite apparent. Youth comes at a premium and so does hitting power. All-rounders get a premium and so do those with “star” power. All in all, the national team selectors could pick some insights into what makes for a successful T-20 team — youth, the right combination of skills, and all round skill-sets. But beyond this not much else should be read in the way the players have been valued. Quite apparently, some less-than-average performers have gained tremendous valuations, perhaps because of greater “star” power and as a result of greater advertising revenues for their teams. In some cases, great talents have been ignored, perhaps because the shortest version of the game cannot tolerate individual idiosyncrasies like the longer formats can.
For the team owners, the IPL is business, and team performance combined with ability to draw viewership at stadiums and TV time will determine their own financial viability. Given the acrimonious relations between different stakeholders in the IPL, it was heartening to note that the auction itself was held without any hurdles and debate. A transparent mechanism that was held in the open and viewed internationally, led to a win-win situation for all concerned. It was also heartening to note that the teams were bidding a smaller share of their total bids on the top stars and were allocating greater shares to the younger and emerging names in Indian and international cricket.
The previous seasons of the IPL have all shown that it is not the stars that lead to greater success or greater profitability but team performance. The younger members of the team, therefore, rightfully obtained greater valuations. There was, however, one minor flaw, the sequential nature of the bidding led to relatively lower bids for those who were “auctioned” in the initial stages than those who came in later. But the overall numbers were high enough, that this was at best a minor flaw, but something that can be corrected in later auctions.
All in all, cricket has once again shown the Indian government and people how great things can be achieved if transparent processes are combined with competitive forces. The IPL auction was not a simple one, where a whole range of bundled skill-sets (each player) had to be valued adequately by multiple players. But competition was encouraged, and auctions were fairly designed and held in a transparent manner where the rules were known to all much in advance. This time round, the IPL bosses appeared doubly concerned about ensuring transparency in the auction process. Clearly, there are lessons from this for telecom spectrum allocation. The 2G process could have been a far more easier auction, specially since spectrum does not have the same level of variation, or for that matter subjectivity in valuation. But somehow transparency and openness are something that Indian politicians are not very comfortable with.
