The IPL salary cap creates the competitive balance that makes the league exciting. Without it, the richest franchises would simply buy every top player. Here's how the money works.
Each franchise gets the same total purse for building their squad. This amount has grown over the years — from ₹40 crore in the early days to ₹100+ crore in recent mega auctions. Retained players' salaries come out of this purse first.
There's a minimum salary that every player must earn (currently ₹20-30 lakh). There's no maximum — if a franchise wants to spend ₹20 crore on one player, they can. They'll just have less for everyone else.
Auction dynamics create inflation. Two rival franchises bidding against each other can push a player's price far beyond his actual value. That's how you get ₹15+ crore bowlers who average 35 in the IPL. Emotions override spreadsheets in the auction room.
The best teams spend big on 2-3 franchise players and find value in the ₹50 lakh to ₹2 crore range for the rest. CSK and MI mastered this approach — pay for your core, scout for depth. Teams that blow their purse on 4-5 expensive players often lack the squad depth to handle injuries.
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