Analysis of player pricing and the bidding process in the Indian premier league

Abstract

global audience of more than 24 million people in 2008 and a current estimated brand value of $4.13 billion . However, there still remains much ambiguity surrounding the price paid for a player by the franchisees and what factors the franchisees use to determine the price to be paid for a player. The only known constraining factor in the prices paid for a player in the debut edition of the IPL in 2008 was the cap on total spending for a franchisee at $5 million. This study aims to understand and evaluate the prices paid for the players across various editions of the IPL. While looking at various factors that influence a player’s valuation in the IPL, we seek to primarily categorize the factors as: a) Performance Measures. b) Commercial Value Player performance measures include multiple parameters such as batting, bowling and fielding statistics. Two methods are used to evaluate player pricing and study the correlation of price with the factors studied: 1) Regression 2) Data Envelopment Analysis Using these two methods, a model is developed to determine the most important and influential factors in the bidding process. This is used to compare the current prices versus the prices as predicted by the model and hence analyze the efficiency of the current bidding process. Regression is used to arrive at a model to develop a model to predict prices for the players and the DEA is used to estimate an efficient level and corresponding slacks for each bid from this efficient level.