When Stadiums Cheer Currencies
Bats, Balls and Billions
The country with a cricket star in every street is hosting the thirteenth ICC ODI Men’s World Cup and transforming its surroundings into a cricketing carnival. The last time India hosted the grand event was the year 2011, coincidentally marking the same year when team India secured its last victory in this tournament. Fast forward 12 years, the Indian landscape has met multifaceted changes and the nation is yet yearning to revere such a win again. While the nation is eager for a stellar performance from its team, the anticipation extends beyond to the financial innings.
“Can the economy score extra runs for itself or would it stumble as a batsman to deadly bouncers of uncertainties?”
Pitch Perfect Profits
Amidst the onset of the grand event, the most commonly heard discussion during chai breaks is about the expenditure and the source of money for organizing such an event (of course after the talks on India Vs Pakistan Match!) Let’s uncover the "business model" that's driving the World Cup craze. This cricketing carnival is set to score a sponsorship revenue of a whopping $150 million (that's over ₹1,248 crore, folks!). Think of it as a powerplay where sponsors join three different leagues, investing in sums of $8-10 million, $6-8 million, and $3-4 million. In return, these financial all-rounders enjoy massive fan engagement and a boost in their financial scorecards.
Diving into the world of the Cricket World Cup in India, we can't help but focus on the ticket sales which aim to catch a staggering Rs 1,600-2,200 crore. In a nation where cricket unites neighbourhoods like a sacred ceremony, the battle for broadcasting rights was nothing short of a stadium-sized "tug of war." In the end, Star Sports clinched victory, amassing an eye-popping Rs 10,500-12,000 crore!
To achieve the staggering revenue requirements, following the aforementioned openers, the batting lineup comprises merchandise, licensing, accommodation, fan zones, and digital platforms, together becoming a team chasing a grand target.
“It's not just about wickets and runs; it's a financial boundary worth exploring.”
Behind the Sixes and Wickets
What would be a cricket match without the roars from the crowd in the stadium that echo the heartbeat of the nation? The stadiums, being the pulse of every cricket event, are also a substantial chunk of the funds used in infrastructure development. Just as a cricketer refines their technique, infrastructure demand enhancements and upgrades to align with international standards, ensuring a seamless experience for both players and spectators. Hence, the Indian government is making significant investments in infrastructure, upgrading roads, airports, and stadiums to gear up. The expected costs for these endeavours are projected to be approximately $750 million.
Be it the legendary “Mauka Mauka” advertisement or Pepsi’s “Change the Game” campaign, we have had some iconic World Cup commercials. Continuing the legacy, India has heavily invested in marketing aspects like branding, public relations, social media and advertisement. Yet another important aspect of funds allocation is the enhancement of technology to cater to the fans watching the match either through TV or online platforms. With the advent of the digital economy, the customisable options for viewers make sure that the audience is clean-bowled to watch the match from their own pavilions.
After the Roar Fades
“Victory on the Field, Prosperity in the Balance Sheets!”
The Cricket World Cup is not just a cricket tournament but a grand economic theatre and this time with a cameo of India's festive season. Hosting the tournament within the country is a source of civic pride, offering a chance for extensive brand visibility and attracting potential long-term investments. The amalgamation of cricketing season and festivals will only benefit the economy. The enthusiasm for both cricket and festive occasions is driving a continual surge in product demand. Everything from food and fashion to appliances and home decor sees a constant stream of eager buyers.
These major cricket tournaments set the nation abuzz, and this buzz isn't limited to the stadiums; it reverberates through various industries. This era of “cricketainment” is expected to influx the economy by Rs 13,500 Crores! Analyzing the macro overview, multiple sectors would benefit and eventually boost the economy, including the food and beverage industries (because mom is off duty), online gaming industry (because Dream 11 par Team banao), retail and e-commerce (new match, new clothes), transportation (Since thrilling matches everywhere) and the hospitality industry (As our values say: Athiti Devo Bhava). While the aforementioned sectors are looking forward to hitting a century, some industries are out on a golden duck. On India match days, there could be a negative impact on footfalls for movie theatres, theme parks, and offline brick-and-mortar retailers.
Game Changer or Game Over?
Amidst all these glitters of celebration and sounds of fireworks after every win, the lurking problem of inflation is not making to the headlines. The cricket season and festival season coming together seem to be an enjoyable combination but they can also put a strain on the economy as well. The increased demand for goods and services, supply chain disruptions, and speculation can all lead to higher inflation, especially with respect to the transportation, food and beverages and accommodation industries can cause to high inflation run rate.
While infrastructural development paves the way for the glory of sporting grandeur, it often comes at a cost. The domino effect of hosting the World Cup continues to exert pressure on local infrastructure, raising concerns about resource sustainability and heightened security demands. As exemplified in recent instances, the construction of new stadiums and associated infrastructure projects often leads to environmental degradation, including deforestation and increased pollution. These adverse impacts underscore the urgent need for more comprehensive environmental impact assessments and sustainable development strategies in future event planning. While Indians focused on scoring additional financial runs in the nets, they undermined the Googly of environmental impact!
Balancing the aspirations of hosting a global sporting spectacle with the imperative of preserving the ecological balance is critical, emphasizing the importance of incorporating green initiatives into the core fabric of event organization and management.
Bank of Baroda Report
Authors: Harsh Agarwal and Sehaz Nagpal
Illustration: Prateek Verma