ECONOMICS IN THE FIELD : THE CRICKET INDUSTRY
Cricket has a huge role in the entertainment and leisure of Indian households. Its cultural popularity has led to the development of cricket as an industry that plays a crucial role in the economy. BCCI, which is the controlling body of cricket in India was worth a colossal ₹14,489 Cr. at the end of the financial year 2018-19, and therefore, there is no denying that cricket has been a huge player in the economy, not just in India, but the entire world, with many domestic as well as international events.
Cricket is one of the most significant contributors of the Indian sports industry, because of its popularity among all generations. It is estimated that the contribution of cricket is about 85% of the Indian sports economy, with the Indian Premier League (IPL) being one of the major revenue sources behind this huge market share in the industry.
With a total revenue of USD 1.9 billion in 2019, cricket tends to get most of the sponsorship deals, accounting for 62% of the sport’s total revenue for its events, as a consequence of the massive craze and blind allegiance it holds in India. This sort of demand is not seen in any other sport and therefore, the fact that cricket is dominating the Indian sports industry with a massive margin is inevitable.
Even during the pandemic, despite the games being shut, the social media influence of various cricketers grew amongst the population, resulting in cricketers holding 92% of the endorsement deals for athletes online. In fact, many major sporting events such as IPL and T20 World Cup took place despite the challenges posed by Covid-19; a testament to the popularity and demand cricket has among Indians.
The economic impact of cricket on other industries is also massive. As per a KPMG survey, international cricket tournaments witness a mass influx of tourists from the participating countries. In response, demand for hotels near the stadiums also skyrockets giving the hospitality industry another festive season of the year.
Further it provides a helping-hand to the Government by generating large-scale employment, including but not limited to medical teams, support staff, marketing team, security personnel, etc. As per a report, more than 25,000 jobs were created in Pune, India for just two IPL matches.
Another spotlight of this industry is the development of tier-2 cities. A large chunk of matches are scheduled at such places, leading to their infrastructural development, increase in tourist footfall and of course some recognition to the host city.
Cricket is, therefore, a complete economics in itself, working at both macro and micro levels. Having discussed the industry wide implications, here’s a snapshot of the micro level. Every year, new brands come forward to sponsor their national teams. Cricket boards outnumber all the earnings when compared to income from sponsorships. Advertising rights and ticket sales are an additional income. Since, a higher proportion of viewers are millennial, among whom alcohol consumption is commonly found, you will witness a number of ads by beer brands in between the math.
The total cost of a single match is in billion dollars, but these sponsors and advertisers make up way more than what they spend. Winning prize is just for the finalists but it’s a win-win situation for all the teams. However unfortunate it may be for Indian fans to not see their team in qualifiers, BCCI fortunately brings home $190,000.
A country which treats it like a religion, ‘India’ is a catchphrase when we talk about cricket. As a country, we comprise 90 percent of the earnings of ICC, and in terms of domestic cricket, IPL is a legacy we have gifted to the cricket aficionados. Once treated as a charity organization, BCCI came under the supervision of the Income Tax Department in 2008 after the launch of the Indian Premier League, and since then, BCCI has paid taxes amounting about Rs.350 crores a year.
Heavy competition among the bidders to be the official name partners is an intersection point of two industries: the corporate world and the sports industry, each influenced by the other. Further, introduction of new teams from time to time prevents this mega project from becoming stagnant.
Apart from economic benefits, it is the largest platform for budding talent. Getting international exposure at domestic level ensures the future of this game in India. The growing revenue for team owners increases the auction budget, ultimately increasing the purchasing price of the cricketer. From a bus driver to a team captain, IPL is the peak time for innumerable businesses.
Cricket can be seen as a whole festival on its own which drives revenue for the economy and creates a huge number of employment. It is unstoppable even by the worst of enemies like COVID and continues to entertain and create a sense of belongingness among the people. Major revenue for the sport comes from sponsorship, which is then supported by advertising rights and ticket sales. Sponsorship and advertising is one of the major sources of income for the players as well, especially at the time of Covid. The craze and demand for cricket has helped create a huge economy for cricket which is way bigger than any other sport. This is what makes cricket so unique and intriguing.