Regulating Player Markets in Sport: Competition Law Risks and Realities

The recent reforms to the Indian Premier League (IPL) player-payment structure provide an interesting case study. As the IPL 2026 mini auction approaches, attention has turned not only to which players may attract the highest bids on 16 December, but also to what they can actually earn. That question is more complicated than usual because of a rule the Board of Control for Cricket in India (BCCI) introduced last year: a maximum-fee cap that applies only to overseas players.

Australia’s Cameron Green – expected to be among the most sought-after players – may attract bids far exceeding INR 18 crore (approx. USD 2 million). Yet under the IPL’s new rule, Green’s actual remuneration, his ‘take-home’ pay, cannot exceed INR 18 crore, regardless of how high the bidding climbs. Any surplus is transferred to the BCCI’s player-welfare fund.

For governing bodies across sport, this example highlights an increasingly important question: when does a rule designed to manage sporting integrity or commercial fairness risk straying into the territory of competition-law concern?

This article explores that question through the IPL example and highlights key considerations for SGBs when designing or revising labour-market rules. This article does not comment on Indian competition law specifically; it refers to global antitrust principles.

1. The IPL’s New Rule

Under the IPL’s September 2024 reforms, in mini auctions overseas players cannot receive more than the lower of:

i. INR 18 crore (the highest retention slab)

ii. the highest auction price at the preceding mega auction (in this case, November 2024).

Bidding can exceed the cap, but:

• While the franchise’s purse is debited by the full bid amount;
• the overseas player receives only the capped figure; and
• the surplus is diverted to the BCCI.

Indian players are exempt. So if an Indian player attracts a bid of INR 20 crore, they shall receive the full INR 20 crore.

The rule is believed to have been introduced to address franchise concerns that some overseas players were strategically skipping mega auctions only to re-enter mini auctions – where scarcity and specific squad needs sometimes produce outsized bids.

The regulatory instinct to close a perceived loophole is understandable and common across sport. But it illustrates why SGBs must evaluate not only the sporting rationale behind a rule, but also its potential competition law implications.

2. The Competition Law Lens: Understanding Labour Market Restraints

Antitrust authorities across the world pay close attention to rules that restrict the ability of employers to compete for talent – particularly where the restriction affects earnings, mobility or access to the labour market.

Under general competition law principles, a rule may raise concerns where:

• competing clubs or franchises operate under a framework that limits the wages payable to a category of workers;
• the limitation does not arise from collective bargaining with players;

• the restraint is not essential to achieving legitimate sporting objectives.

In the IPL example, the maximum-fee rule could be viewed as having the structure of a wage restraint, because:

• it suppresses potential earnings for overseas talent;
• wage ceilings apply asymmetrically (foreign players only);
• any excess bid is diverted away from the player and allocated to the BCCI.

A similar issue could arise in any sport where rules affect transfer values, squad-building mechanisms, match fees or cross-border player mobility. For SGBs, the key is not that such rules should be avoided, but that they require careful justification and proportionality.

3. Key Risk Indicators: Differential Treatment and Justification Standards

Where salary caps and other squad rules do exist in global sport, several features tend to reduce legal risk. They typically:

• apply equally to all players;
• form part of a collectively bargained agreement;
• relate to team spending, not individual workers;
• target clear financial stability or competitive-balance objectives.

Where a rule applies differently based on nationality (as with the IPL example), competition law risk tends to increase. Differential treatment is not unlawful per se, but it demands clear, evidence-based justification.

Similarly, where a SGB adopts a restraint without publishing the underlying rationale or demonstrating why alternative, less restrictive measures would not suffice, the rule becomes more vulnerable to challenge.

4. Designing Proportionate Rules

A rule that restricts player earnings or mobility can be justified if it:

i. pursues a legitimate sporting objective,

ii. is inherently necessary to achieve that objective, and

iii. is proportionate, meaning no less-restrictive alternative would be effective.

Returning to the IPL example:

• If the concern is strategic absence from mega auctions, a registration-ban rule (already introduced by the IPL at the same time as the maximum-fee cap) may be a less restrictive alternative to tackle the perceived problem.
• If the concern is competitive balance, then a team-wide salary cap or luxury-tax system would be more aligned with global best practice than a nationality-specific cap where any surplus is transferred to the SGB. The IPL already operates franchise salary caps, which increased substantially for 2025.
• If the concern is financial stability, the fact that teams may still bid above the INR 18 crore ceiling weakens any claim that the rule limits spending.
• If the concern relates to auction integrity, SGBs would benefit from explaining how and why an individual wage limit is necessary for that purpose.

The point is not that SGBs should avoid regulating, but that any intervention should be capable of being justified as necessary and proportionate to the sporting aims it is intended to serve.

5. The IPL’s Potential Defences

It is important to recognise that SGBs often have legitimate regulatory aims. In the IPL’s case, several counterarguments could be advanced. The IPL and BCCI could argue, for example:

A. “This is not wage-fixing – teams can still bid whatever they want”

It’s a fair point: the auction price remains unconstrained. But competition law analysis focuses on the effect: which is that the player’s maximum remuneration is restricted.

B. “Auction integrity requires this rule”

As noted above, the reported concern raised by franchises was that players were gaming the system by skipping mega auctions, distorting mini-auction prices and undermining predictable squad-building. However, the IPL also introduced a registration ban in last year’s reforms, aimed at preventing this strategic behaviour. So is a nationality-based individual cap really the least restrictive means of achieving this objective?

C. “Closed leagues require centralised labour allocation”

The IPL may invoke parallels with U.S. sports leagues like the NFL or the NBA. However, those leagues:

• have strong players’ unions;
• collectively negotiate salary caps;
• apply caps equally to all players; and
• operate within broader revenue-sharing systems.

The IPL rule does none of these things.

6. The Rising Tide of Antitrust Scrutiny in Sport

Across sport, regulators and courts are increasingly willing to intervene where rules affect:

• earning capacity;
• movement between leagues;
• access to markets;
• collective or individual bargaining rights.

In the past two years alone, the sports sector has seen antitrust challenges to:

• international calendar organisation,
• league entry rules,
• pay caps and mobility restrictions,
• transfer regulations, and
• athlete eligibility rules.

For SGBs, the message is clear: competition law has become an integral part of sports governance, and rules that affect player markets should be designed with this in mind. Herein lies not just a warning, but an opportunity. Thoughtfully designed regulations can withstand scrutiny, support long-term stability, and reinforce the integrity of the sport.

Closing Reflections

The IPL’s maximum-fee rule is a timely example of how even well-intentioned regulatory measures can raise nuanced competition law questions. As player markets globalise and commercial pressures intensify, governing bodies across sport will increasingly find themselves navigating these issues.

The goal is not to avoid regulation but to design it carefully. It’s important to:

• articulate the sporting objective clearly;
• assess less restrictive alternatives;
• ensure rules are even-handed unless differentiation is justified;
• document the rationale; and

• review the rule once implemented.

Governance decisions increasingly carry both sporting and legal consequences. Anticipating these issues early helps maintain trust and long-term sustainability while minimising legal vulnerability. The IPL may be the latest example. It will not be the last.