Think IPL players are well paid? They should be paid three times more
Cricketers today earn more than ever before, their salaries the envy of generations past. At this year’s Indian Premier League, Ben Stokes will earn £1.6 million, Sam Curran £1.85 million and Harry Brook £1.3 million – all, of course, in addition to their England contracts.
And yet, as they represent their franchises in India, the IPL's stars can all consider themselves substantially underpaid. Were they paid what they were worth – in accordance with the norms in global sports leagues – Stokes, Curran and Brook would all stand to make around £5 million per IPL season.
In most sports leagues, players earn at least £1 for every £2 that the league makes in total overall revenue. In the NBA, NFL and Major League Baseball, the three biggest US sports leagues, players all earn at least 48 per cent of the league’s revenue. In the Premier League in 2020-21, clubs spent 71 per cent of their revenue on player wages, according to Deloitte.
But in the IPL, this basic rule – that players will earn at least half of the league’s revenue – does not apply. From 2023, all 10 franchises will receive £48 million a year. On top of this, franchises can expect to earn at least another £5 million in gate revenue, sponsorship and merchandise sales, estimates K Shriniwas Rao, the editor of Sports Network18 and an expert on IPL finances. Franchises from the biggest cities – above all, Mumbai Indians – could expect to earn up to £10 million extra. Overall, all franchises can expect to earn a total of £53 million this IPL campaign.
Yet only a puny share of this reaches the players who make the IPL. This year, each franchise has a salary cap of £9.5 million (95 crore). That equates to just 18 per cent of the total revenue of the lowest-earning franchises; it is an even smaller share for franchises like Mumbai. The total salary cap will nudge up by another five crore, to 100 crore (£10 million), next year, but the point remains.
In any other major sports league generating as much cash, players would stand to earn three times as much for exactly the same work. The small proportion of revenue that finds itself to the cricketers has huge consequences for the lower-paid squad members: the worst-paid domestic players get only £20,000 (20 lakh) to play in the IPL. All players lose 20 per cent of their fee, on a per-rata basis, if they do not play a game.
Very little IPL revenue also reaches the countries who produce overseas talent. For each player from a country who is signed, national boards receive a payment equating to 10 per cent of the player's salary. West Indies and other nations argue that IPL sides could do much more to compensate them both for their talent and effectively giving up two months of their international calendar a year to accommodate the competition.
The IPL's salary cap is the central mechanism for keeping the figure that players earn down. Without it, IPL owners – a group that includes the Ambanis, who are estimated to have more than £150 billion in assets, and many of India’s richest individuals and companies – would be free to keep on bidding against each other for players. If they could, the share of revenue that players earned would be at least 50 per cent, says the sports economist Stefan Szymanski.
Yet the real reason that the IPL can keep the proportion of salaries that players earn so low is that cricketers have no alternative. In US leagues, which also enforce a salary cap, there are strong player unions; there have been a number of owner-player standoffs and even strikes, as players have fought for their share. US leagues have also learned that, if they do not pay their players a reasonable proportion of revenue, they can leave themselves vulnerable to a competitor.
The IPL does not have these problems. While the Major League Baseball Players Association led the fight to the reserve clause, which held down player salaries by effectively barring free agency and was abolished in 1975, player unions are still barred in India.
The IPL’s revenues are out of all proportion to the competition – even if rival T20 leagues pay players a far bigger share of revenue, the amounts that the players earn will still be less. Indeed, this year the IPL’s control over the T20 ecosystem has only intensified. Below the IPL, the two leagues that pay players the most are South Africa’s SA20 and the UAE's International League T20 in the UAE, which both launched in January. IPL owners own all the SA20 sides and have stakes in half of the International League T20 franchises. The easiest way to control the competition is to buy it.
IPL owners’ other great asset is India’s burgeoning middle class. This underpinned a surge in the value of the broadcasting rights from 2023: these are worth £5.1 billion from 2023-27, over double the previous five-year cycle. While broadcasting rights have soared, the salary cap has barely increased: from £9 million per franchise per year to £9.5 million.
There are now 10 IPL franchises, rather than eight, but the share of total league revenue that will go to players is now actually less than in the 2018-22 cycle. But as players will still earn more overall, any dissent is likely to be minimal: arguments about money tend to be less vicious when the pie is increasing, rather than shrinking.
“Because there’s no alternative to the IPL, there’s nothing much players can do about it,” says Szymanski. “IPL owners want to set the salary cap at a level which is more attractive than any plausible alternative for players. That’s all that matters. What they don’t want is a strong T20 league to emerge as competitor.”
If players ever grouped together to challenge the salary cap or being free to move over an IPL cycle, Szymanski believes that they would have a fighting chance of being successful. But the risk of a player defeat would be significant, with courts sympathetic to the argument that a salary cap stops one team dominating.
Even if players won, a legal challenge would take years. In a short career, players have little incentive to bring a legal challenge that could make them pariahs. Consider Jean-Marc Bosman, the architect of the Bosman ruling, that allows footballers to move clubs freely when out of contract.
His legal case cost him five years of his career; after he was eventually victorious, Bosman never played again. While his case earned footballers worldwide many millions, none of these benefited Bosman, who ended his career penurious. Curt Flood, who first challenged baseball’s reserve clause, barely played again, lamenting, “I doubt even one of the 24 men controlling the game would touch me with a ten-foot pole. You can't buck the Establishment.”
And so, even as the IPL’s cricketing and commercial appeal soars, players are unlikely to agitate for the share of cash that – based on other major sports leagues – they deserve. But if the share of revenue that IPL players ever get ever does fall in line with other sports leagues, then the competition's effect on the international game will become even greater too.