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Cricket: Money flows as freely as runs in the limited-overs format

 Access to cricket on a screen of some kind is now ubiquitous, deeply penetrated and (almost) free in India, delighting millions of fans. (ANI)
Access to cricket on a screen of some kind is now ubiquitous, deeply penetrated and (almost) free in India, delighting millions of fans. (ANI)

Summary

  • Commercial forces have taken the game deep and wide onto Indian screens and delighted fans, while transportation costs, ticket availability and high fees render stadiums less inclusive.

India has been gripped by World Cup fever for the past six weeks. 10 teams, 10 venues, 48 matches, dozens of charter flights and team buses for players, hundreds of hotel room nights for players and officials, and thousands upon thousands of car trips, train journeys, air expeditions and food delivery packets for visitors. The logistics for each of the matches. particularly the semi-finals and final, have been mind-boggling and chaotic, but adequate and enjoyable in that peculiarly Indian way. Despite the occasional controversy about pitches favouring the home team, frictions delaying visitor visas and the late release of stadium tickets, the giant cricket carnival came to a successful conclusion. To the disappointment of a billion plus fans, Australia overcame a hitherto dominant India in a final that pitted the tournament’s best two teams against each other.

The International Cricket Council (ICC) is the overall organizer of the Men’s One-Day International (ODI) World Cup (WC), held once in four years. It is also the global governing body of cricket that comprises of 12 full members and 96 associate members on whose behalf it also organizes the T20 World Cup (due in 2024), World Test Championships, Champions Trophy (2025) and the women’s editions of the T20 WC (2024) and WC Tests (2025). The ICC awards the ODI WC’s hosting rights on a policy that combines rotation with what might be described as ‘competition by invitation.’ The 2023 edition was awarded to the Board of Control for Cricket in India (BCCI), for India to be sole host for the first time. The 2027 edition (14 teams, 51 matches) will be hosted jointly by South Africa, Zimbabwe and Namibia and the 2031 edition will be hosted by India and Bangladesh.

The total prize money for this edition of the tournament is $10 million, with the winning team getting $4 million, the runner-up $2 million and the losing semi-finalists earning $800,000 each. Each of the 12 total umpires receives $3,000 per match. These numbers seem paltry in comparison with the broadcast and media rights, corporate sponsorships and ticket fees. Even though league level matches were under-attended, using a conservative estimate of paid tickets, I would place the total ticket fees collected for the tournament at about 1,000 crore.

Broadcast and media rights and corporate sponsorships are, of course, significantly higher than that sum. The ICC had received $2 billion from Star Sports (since sold to Disney) for TV and digital rights for an 8-year period ending this year. The ICC approved broadcasters in each region, such as Fox in Australia and Super Sports in Africa, to pay Star for the right to broadcast matches in their regions. The ICC, in turn, pays out an annual amount to member nations after reserving some amount for its own functioning. Given that India is the 800-pound gorilla in world cricket, I estimate that the BCCI receives the largest amount of $50 million per year for the 8-year period, with most of the other full members receiving about $ 15-20 million per year. For the privilege of hosting the event, the BCCI is required to pay a host fee of about 200 crore, make stadium-upgrade investments of about 500 crore and take charge of the boarding, lodging and transportation of all teams during the event.

There were 26 brands associated with sponsorships for this edition, with the major ones being Emirates, PhonePe, MRF, Bira91, Aramco, Amul and DP World. Disney was expected to pull in advertising revenue to the tune of $450-550 million, with some of the major sponsors paying $30-40 million each. Amul, for instance, had sleeve-logo deals with Afghanistan, Sri Lanka, and South Africa. Fans would also have recognized the Emirates sponsorship on the Decision Review System (DRS) screen.

As is well known, the BCCI is the wealthiest country cricket body in the world. However, despite all that money generated and expended in this edition, the Board may have to depend on a full or partial tax exemption to break even.

In 2005, ICC moved to Dubai, exempting it from most taxes. The ICC makes transfers to the cricket bodies of countries, which are then responsible for securing tax breaks or making tax payments as required. During the 2011 World Cup, India granted a full tax exemption, while for the 2016 World Cup, there was a 10% reduction in tax. So far, no tax exemptions have been extended for this edition and a 22% tax has been imposed on the ICC for broadcasting rights. The BCCI estimates that between $52 and $116 million will need to be paid in tax (and correspondingly reduced from ICC annual payments to India) if there were to be no tax reduction. Some analysts estimated that, in total, the World Cup would boost the Indian economy by about 22,000 crore. The BCCI’s argument for a tax reduction is based on the boost given to the Indian economy and on the direct and indirect taxes that the event has generated. Of course, the counter argument is that ‘rules are rules.’

In sum, money flows freely for limited overs cricket. Access to cricket on a screen of some kind is now ubiquitous, deeply penetrated and (almost) free in India, delighting millions of fans.

Stadium access is becoming less and less inclusive, though, with transportation costs, ticket availability and fees increasingly out of reach for all but the most privileged of Indian cricket fans.

The show goes on.

P.S: “Money often costs too much," said Ralph Waldo Emerson.

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