League Design, Competitive Balance, and Economics: A Comparative Study of IPL and MLB

Abstract

This study compares the Indian Premier League (IPL) and Major League Baseball (MLB) from 2008-2024 to see how league design shapes both competition on the field and money off it. This paper builds a simple model that contrasts the IPL’s hard salary cap, annual player auction, and short season with MLB’s soft cap, long-term contracts, and 162-game schedule. These findings then evaluate the model against data on competitive balance and conduct empirical analysis regarding attendance, media audiences, and franchise values. These findings reveal that the IPL’s strict cost controls and frequent talent reshuffling create tighter races and faster growth in fan interest and media rights, while MLB’s looser rules yield moderate parity and slower economic gains. These findings support the idea that uncertainty of outcome drives demand, but also show that smart management can still produce repeat champions even in a tightly regulated league. The paper ends with policy suggestions for league officials, team owners, and investors.