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Mint Explainer: Money rain at the Cricket World Cup

The International Cricket Council (ICC) Men's Cricket World Cup Trophy. (Photo: AFP)
The International Cricket Council (ICC) Men's Cricket World Cup Trophy. (Photo: AFP)

Summary

  • The ICC World Cup isn't just a sports phenomenon, it is an economic powerhouse, propelling industries from media to retail

India is back to hosting the ICC World Cup, and this time, it's a solo act. The event, much awaited by millions, promises not only thrilling matches but also a significant impact on various facets of India's economy. Although a comprehensive evaluation of this impact is possible only after the tournament concludes, early estimates hint at expenditures ranging from $1.6 billion to $2.4 billion by fans from India and around the world. 

Let's break down the impact.

The tournament

The 13th rendition of the ICC World Cup showcases 10 top-tier teams vying for the championship. India shines as the hosting nation, with teams like New Zealand, England, Bangladesh, Pakistan, Australia, Afghanistan, and South Africa clinching spots via the Super League. Through determined effort, Sri Lanka and the Netherlands secured their berths through the qualifier rounds.

Notably, the West Indies, despite their cricketing prowess, missed the qualification this time.

All 10 teams will play each other once, in a round-robin format in the Group Stage, with the top four in the points table progressing to the semi-finals. The 46-day event will see 48 matches played across 10 venues.

The prize pool

The International Cricket Council (ICC) has earmarked a $10 million prize fund for the Men's Cricket World Cup 2023 taking place in India.

Champions: The winners of the tournament will get $4 million.

Runners-up: The second-placed team will be awarded $2 million.

Semi-finalists: Two losing semi-finalists will each receive $800,000.

Group stage victories: For each triumph in the group stage, teams will secure $40,000.

Teams outside the knockouts: The six teams that don't progress to the knockout stage will each be granted $100,000.

Also in the offerings:

Indian players get 6 lakh per ODI ( 3 lakh if not part of playing XI)

Australian players get A$15,000 ( 8 lakh) per match

Indian players also have annual retainer contracts, valued in crores, depending on their grade (A+ contracts are worth 7 crore, A worth 5 crore and so on)

Australia, too, has retainer contracts, with the value ranging from $1.1 million to $2 million. Aussie captain Pat Cummins commands $2 million. 

South Africa has retainer contracts (but no per-match fee)

Media Rights and Advertising Revenues

Disney Star (previously Star India) secured exclusive media rights for the ICC World Cup 2023, under a pact valued at $2.02 billion covering 2015-2023. The ICC projects returns surpassing $500 million from this year's World Cup alone.

Considering India's contribution of over 70% to ICC's overall revenue, the Board of Control for Cricket in India (BCCI) is projected to take home 25-30% of the ICC's member nation funds. Such allocations are essential for BCCI to host events, improve cricket infrastructure, and remunerate players and officials.

In addition to these revenues, the ICC stands to garner around $150 million through its partnerships with 20 sponsors and partners. This roster includes names such as MRF Tyres, Booking.com, IndusInd Bank, Mastercard, Bira91, Upstox Dream11, and more. Notably, the majority of these sponsors are Indian companies, and they are expected to make substantial investments in marketing and on-ground activations.

Furthermore, Disney Star, as the rights holder, is poised to amass over $300 million (approximately 2500 crore) from sponsorships and advertising across both television and digital platforms.

Hospitality and tourism

The ICC World Cup stands as a powerful draw, luring global tourists and ardent cricket followers to the hosting country, India. This surge in international visitors translates into enhanced hotel bookings, thriving restaurant businesses, and a spike in tourist activities. The hospitality sector is set to witness a boom in revenue, while simultaneously opening doors for employment.

Booking.com's recent data illustrates the World Cup's magnetic effect, indicating a spike in search queries for Indian cities aligning with match schedules. Remarkably, from 1 October to 20 November, seven out of the top 10 most in-demand Indian destinations are the host cities: New Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad, and Ahmedabad.

The data further spotlights that nationals from the UK, Australia, Netherlands, New Zealand, and Sri Lanka form the majority of cricket enthusiasts visiting India during the World Cup period. Flight search data reveals a 15% year-on-year increase for flights from cricket nations to India from 1 October to 20 November.

Airbnb's statistics complement this narrative, showing a surge in searches for accommodations in India during tournament days, establishing the country as the preferred destination for passionate cricket fans worldwide. Notably, during the much-anticipated India-Pakistan match on October 14, Airbnb experienced an extraordinary surge of over 4,000% in accommodation searches for check-ins in Ahmedabad, the host city for that date.

However, the allure of the World Cup transcends the matches themselves. International travellers often delve into the local culture, and savour cuisines, and immerse themselves in unique experiences. This infusion of international visitors presents valuable economic opportunities for local communities.

Restaurants and food delivery

While the ICC World Cup has the nation's cricket fans riveted, it presents a unique opportunity for the food industry. As enthusiasts rally behind screens or convene in local pubs and eateries, restaurants and delivery platforms are ramping up their services to meet the heightened demand during game days. This strategy is already bearing fruit as the World Cup fervour escalates.

Both high-end and local eateries recognize the World Cup's commercial allure. With cricket matches whipping up excitement, restaurants are unveiling World Cup-centric menus, marrying global flavors reflective of the participating teams. Many are enhancing the dining atmosphere with big screens for live match telecasts and cricket-inspired decors. To woo patrons, discounts and special offers are on the menu.

Meanwhile, food delivery platforms are ensuring timely deliveries to keep fans in sync with every match moment, avoiding disruptions from late orders.

Retail and merchandising

With a global fan following, the ICC World Cup has been a goldmine for the sale of related merchandise. The tournament's appeal extends beyond the boundaries of the cricket field, and fans are eagerly seeking out various items that allow them to show their support for their favourite teams and players. This surge in demand for World Cup-related merchandise brings forth a multitude of benefits for retailers, fans, and the overall economy.

As fans want to be part of the action themselves, World Cup merchandise provides them with a tangible means to express their allegiance and excitement. From official team jerseys to caps adorned with team logos, fans are eagerly snatching up these items, proudly wearing them to show their team spirit during the matches.

Another iconic sight during the matches is the waving of flags and banners. These symbols of national pride and team loyalty can be seen in stadiums, homes, and even on cars, as fans deck out their surroundings in a colourful display of support. Retailers around stadiums are stocking a variety of flags, ranging from large national flags to smaller ones featuring team logos.

Retailers are expected to experience a significant boost in sales during the tournament. As fans scramble to buy merchandise related to their favourite teams, for retailers, this translates to increased revenue, making the World Cup period one of the most profitable times of the year.

While official merchandise is the preferred choice for many fans, the demand for knock-offs also exists. These unofficial products, although lacking in quality and authenticity, cater to price-sensitive consumers. They often flood the market, presenting both challenges and competition for retailers and licensed manufacturers.

The ICC World Cup is not merely a cricketing spectacle, it's an economic juggernaut that fuels sectors ranging from media and hospitality to food and retail. As matches unfold, India, a cricket-devoted nation, is set to experience the holistic impact of this sporting fiesta, cementing its reputation for channeling passion into economic gains.

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