Friday, May 8, 2009

More foreign players in IPL teams?

The Kolkata Knight Riders coach, John Buchanan, has called for allowing more foreign players in the playing eleven of the Indian Premier League (IPL) teams, beyond the presently permitted four for each team. Interestingly, a reverse of this is being played out in the European football leagues, with a proposal currently under circulation to restrict the number of foreign players in each team to five in the playing eleven.

On the face of it, removing the limit on the number of foreign players will enable clubs to stock their teams with superstar cricketers from across the world, and thereby improve the quality of the matches in the league (though, the record of some of the teams with such superstars, as opposed to the low-profile team of Rajasthan Royals, would question this claim). But, as Markus Lang et al, via Chris Dillow, point out, in the context of European football leagues, a league with restrictions on foreign players produces more efficient outcomes overall.

They claim that a "league with a (binding) restrictions on foreign talent for all clubs is more balanced than a league without a (binding) restrictions on foreign talent. Moreover, the wage level of domestic (foreign) talent is higher (lower) in a league with a binding restriction on foreign players. Finally, a tighter restriction on foreign players increases profits of all clubs."

A league without restrictions favors those clubs with deep pockets, at the expense of others, thereby opening up the strong possibility (even certainty) of a two-tier (in terms of quality) league emerging in course of time. It also leads to an "arms race" between the team owners to pack their teams with "superstars", which in turn ends up eating into the profitability of the clubs. Restrictions bring in some form of equality among all teams, especially with respect to their spending decisions. And, as we have seen with the examples of Rajasthan Royals and Deccan Chargers on the one hand and Royal Challengers (Pietersen) and Chennai Super Kings (Flintoff) on the other, money does always buy the best outcomes.

To paraphrase FIFA President Sepp Blatter, if the Board of Control for Cricket in India (BCCI) is in favour of - a strong national team, national team players playing for the top clubs in IPL, IPL being a platform for giving exposure to national talent, youth players being trained and then getting access to the first team at their original club, players who have come through the youth system at a club to sign their first pro contact with that club - then the IPL should have restrictions on foreign players. If, on the contrary, the objective is to boost the bottomlines of the companies, then it is a different matter altogether!

Update 1
Formula One's governing body has set new budget cap regulations, of $59 million, for the 2010 season, well below what teams are spending this season. Teams that go over that limit will have to abide by stricter technical regulations — essentially suffer a penalty. This is set to affect the bigger teams like Ferrari, which alone spends more than $400 mn, and provide a more level playing field for competitors.

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