You have seen multiple cricketers walk away with multi-crore deals over the years at an IPL auction. Big name players have struck it rich, while little known players have become household names.
But how exactly does the IPL salary structure work? Here’s a quick explainer:
– Players are bought at an auction after teams bid for them. The bidding starts at their base price and eventually the team with the highest bid gets to buy the player for the highest bid amount
– The sum that the player is bought for becomes the player’s salary (taxes are worked out accordingly)
– There are no other claimants for the salary money, the amount is the player’s alone
– All salaries are per season. So if a player is bought for Rs 10 Crore, he is paid that amount for one season’s appearance. In case say it’s a three year contract, he will be paid Rs 30 Crore (Rs 10 Cr per season depending on availability)
– BCCI pays 20% of whatever a player earns to that player’s home Board. So for example if an Australian player is bought for Rs 10 Crore, 2 Crore will be paid to Cricket Australia. This money comes out of the IPL central revenue pool
– In 2008, when the IPL began, the bid amounts and salaries were in US dollars. At that time the exchange rate was fixed at Rs 40 per US dollar. In 2012, the system was shifted to Indian rupees (INR)
– If a player is bought, say on a one year contract, and then retained for the next season, there is a contract extension at the same price as the salary that was being paid earlier (This can differ from case to case in case the team wants to give the player a raise while negotiating contract extension)
– How staggered the salary payment for players is depends on how cash rich the franchise is and how the sponsorship money etc is coming in. Some franchises pay their players the full amount together. Cash rich franchises have been known to hand out cheques to the players at the first team camp before the start of the tournament. Some might decide to pay 50% before the tournament and 50% during the tournament. Some might follow the 15-65-20 formula, whereby they pay players 15% of their salary a week before the tournament starts, 65% of the sum during the tournament and the remaining 20% within a stipulated time after the tournament ends.

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