How did Chris Morris fetch over 16 crores in the 2021 auction? How did Chris Lynn only go for base price in 2020? Why did Manish Pandey fetch more than, say, Kieron Pollard in the 2018 mega auction? Often, the blanket answer to these questions is just “auction dynamics”.
What exactly does ‘auction dynamics’ mean and how does it play into teams’ decision-making as well as players’ final price?
Let us begin by trying to understand what exactly is the dynamic. The team strategy and the composition are likely to remain the same for most rational teams – it is the target price for specific players that changes.
There are multiple reasons why a target price fixed before the auction could change. Perhaps a significant gain has been made on an earlier player, allowing the budget to be spread out more.
Maybe the player in question is the last available in his role and tier meaning more budget would have to be allocated to fill that. Other teams’ behavior could play a role too – if two teams are backloading for a big player, maybe it is wise to pick up a similar player earlier at a slightly higher price.
In addition, the auction value associated with a player is not always proportional to “how good a T20 player” he is. For example, Evin Lewis is most certainly a better T20 player than Deepak Hooda, but the latter could still get a higher bid because Indian middle-order batters who also bowl spin are in far lesser supply than an overseas opener.
So how exactly does the price target change? It is either a change from all to nothing or a case of anchor and adjust. Suppose KKR are targeting Pat Cummins and Jason Holder for their first choice overseas all-rounder spot. Picking up Cummins would mean there is no need to allocate any budget for Holder unless he comes at a steal price.
Anchor and adjustment would take place if one of the scenarios we discussed earlier occurs – i.e., if both Cummins and Holder go out of budget, perhaps a slight increment will have to be made on the price set for Odean Smith or Daniel Sams.
Auction order scenarios
As one may have deciphered from the example described above, the auction order is one of the single most important factors that influences both the direction and magnitude of the target price changing.
Let us take a look at some possible scenarios in the coming auction and how it could affect the demand for the relevant players.
Case 1: David Miller (very early set). Miller appears in Batsman Set 1, which means he will be sold between #11-18. Given Miller’s lack of big runs in the T20 circuit and paucity of IPL appearances in the last two years, he is unlikely to be in demand for a starting spot. That being said, Miller still adds value as a pace power hitter and middle order left-hander – both roles difficult to find in the auction. Since Miller is in an early set, it is unlikely that teams will push hard for him with their first choice middle order bats still to come. It is likely that Miller would have fetched more in a later set when desperation is higher.
Case 2: Tim David and Fabian Allen (very late sets). After an excellent run of performances in highly volatile middle order roles over the last 12 months, David (#221) and Allen (#269) should in theory attract interest from many IPL teams. Yet, David and Allen may not fetch massive bids in the auction that they may have if they were higher in the list. Say three teams backload and save a huge chunk of their remaining budget, one team will go back empty handed. The backup options after David and Allen are very limited. Rovman Powell, Rassie van der Dussen, Miller, Sherfane Rutherford and Sam Billings would all be unavailable by then unless they go unsold in the first round of bidding.
Case 3: Lockie Ferguson (in a competitive set). Unlike Miller, David or Allen, Ferguson is pitted in an extremely competitive set that features pace bowlers like Mark Wood, Josh Hazlewood and Mustafizur Rahman. It may be argued that Ferguson is at a tier above the rest, but if Ferguson comes late in the set and the backups for the slot are already taken, the desperation for Ferguson could increase, making a team go higher for him. This means that the need for a price adjustment for Ferguson may or may not be necessary dependent upon the random draw. Similar examples in this auction are Shahrukh Khan, Deepak Hooda, Riyan Parag and Deepak Chahar, Prasidh Krishna and Bhuvneshwar Kumar.
The big drivers
Now that we have discussed how sets influence price changes, let us delve into what the drivers for the pre-auction price itself could be. Obviously, we cannot assume that all teams are perfectly rational, so it is likely that some teams value a player more or less than others due to some biases.
Role-specific demand and supply: As alluded to earlier, there are some roles in the auction that teams will have to pay a premium for. The high upside young middle order batters for example in the auction, are limited to Ishan Kishan, Shreyas Iyer, Shah Rukh Khan and Deepak Hooda. Similarly, the quality Indian wristspinners available are Yuzvendra Chahal and Rahul Chahar. The count in these categories is significantly smaller than the total number of teams – hence, they will almost certainly fetch a premium price.
Base after retentions: The number of retentions and the roles that have been covered in the retentions naturally play a massive role in demand for players. Even though teams have mostly been reset, half the teams have spent over 40% of their budget on retentions. For instance, by addressing key roles like top tier finishers (Andre Russell and Kieron Pollard) means KKR and MI do not necessarily have to worry about getting another, but retaining four players also means they will be unable to make more than one “big” buy in the auction because they will want their quality to be spread out across the lineup.
Bias of having seen players before: While all teams have excellent scouting networks and a diverse coaching staff, the central decision-makers still hold power over the rest. As such, players who have been seen by the key coaches could likely have an edge over others. When making a big decision, it is natural that the perceived safer option is one that has passed the eye test. We have seen this in the past – Ricky Ponting picking Alex Carey and Daniel Sams after a strong BBL performance for example.
Recency bias: Recent performances almost always stick out brightly in a player’s profile. This is natural because selection decisions and player judgement is often made on “form” in cricket. As such, those players who have done well in the last few months are going to fetch a higher bid than they would have if the auction took place prior to that. Some such players are Mitchell Marsh, Rovman Powell, Odean Smith and Ben McDermott who have performed significantly better in the last few months than they ever have.
Endowment effect: It will not be as strong as it was in the auctions that featured RTMs, but we have seen numerous instances of endowment effect in the past. Teams and fanbases do build bonds with players when they have played with them over multiple years, meaning they may go the extra mile to have them back. CSK have bought Faf du Plessis multiple times and MI made one of their highest ever auction purchases on Krunal Pandya in 2018.
Need for captain: Three teams are yet to have a captain. While the debate about how valuable a captain is in T20 is a different topic that will not be discussed here, it is clear that IPL captains are powerful and have a huge influence in terms of decision-making and branding in the long run. Potential candidates in the auction pool are Iyer, David Warner, Kishan and potentially Ravichandran Ashwin. The teams without a captain may pay a premium for these captaincy candidates.
CPL association: There are three teams who now have a sister franchise in the Caribbean (KKR, PBKS and RR). It is possible that these teams borrow players from there to develop continuity in brand and also because the team management will have worked with these players in a team or in a training camp. RR may look at securing Barbados Royals captain Jason Holder, PBKS may want to pick up St Lucia Kings overseas star Tim David or KKR might want to snap up TKR spinner Akeal Hosein as a backup for Sunil Narine.
Apart from the seven factors discussed above, there is one other massive element that deserves a section of its own – dual role players. To illustrate this, let us use the example of Jonny Bairstow. The English superstar, one of the hottest picks in the auction, fulfils either an opener or middle order role plus a wicketkeeper. Since Bairstow arrives early in the auction, it is not wise for a team to lock up Bairstow’s batting position the moment they buy him.
Having Bairstow gives the team a tremendous amount of flexibility – they have the entire overseas openers and overseas middle order streams open to them because Bairstow can adapt based on the other pick. Additionally, there is no need to filter on keepers because he satisfies that role as well.
This is what separates Bairstow from a Quinton de Kock or Nicholas Pooran who are single position wicket-keeper batters. The auction is an extremely unpredictable process and keeping a variety of paths open for insurance is certainly worth paying a few extra bucks for.
Some other such auction facilitators are Ishan Kishan (opener + middle order + keeper), Mitchell Marsh (top order + middle order + part time seam), Jason Holder (floater + finisher + powerplay bowler) to name a few.
Overall, this year’s 10-team auction is going to be different to recent auctions simply because of how much the player pool will be spread out. It is going to be near-impossible to cover all bases in the starting XI in this auction itself, so judging on completeness may not be a fair metric. However, teams can control the high upside, low budget players they choose such that the team grows into a complete team in the future.