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India is a secular country but all Indians do share one common religion – Cricket. With the ICC World Cup being held in the country, it’s officially the festive season now. We South Asians love cricket, it’s probably the one good thing that colonization left us with. Cricketers are gods for us and stadiums are places of worship. You see dedicated cricket fans are eager to watch the games even when it costs us lakhs of rupees. So, just like any other religion, cricket drives humongous emotional expenses and can be big for the economy. 

Economics of the ICC World Cup 2023

Celebrating India’s three consecutive wins and sharing my love for cricket, this week I am talking about the economics of ICC World Cup 2023.

I’m sure you know the records Rohit broke and Bumrah’s bowling economics, but do you know that the World Cup is bringing an inflow of about 20,000 crore rupees into the Indian economy? Let me break the whats and hows of this number down for you.

Sports – A $100 Bn Industry?

No, sports in India is not a $100 Billion industry yet, but we’re not quite far from it with the expectations of the industry sizing up to one hundred billion dollars by 2027. The majority of it is obviously cricket. Indian sports industry employs over 5 lakh people with a size of 14,000 crore rupees. 

We are expecting an inflow of 18,000-22,000 crore rupees from this World Cup which is only a 45-day event. Here’s what ICC World Cups have done till now

• The tournament in 2011 contributed $500 million to the Indian economy.
• Australia and New Zealand, 2015 – 5,000 new jobs created.
• England and Wales, 2019 – Well, just look at these numbers below.

If you think that’s mind-blowing, hear this, the FIFA World Cup held last year in Qatar brought in $20 Billion into the Gulf country. ICC now seems like an amateur right? All said, cricket continues to be the flagbearer sport in commonwealth countries. So much that it can change the demand and supply dynamics dramatically. 

Here’s a break-up of estimated expenditure:

Screens and Stadiums

The last time India hosted the World Cup, we won. So, both expectations and enthusiasm are very high which means the stadiums are booked out for Indian matches. ICC has priced tickets from 500 bucks to 50,000 but the seats to watch the game are being resold in lakhs too. About 25 lakh fans will be watching the matches in stadiums and over 55 crore from screens at home. 

Dive into data: Here’s a summary of some of the most viewed cricket matches. The viewership is expected to increase this year. 

The other significant source of revenue for the cricket boards is streaming rights. Do you know that Hotstar is streaming the World Cup for free on mobile? Why would they do that when fans are ready to pay thousands for tickets? It’s marketing. Hotstar is getting crores of viewers from the games and they planned for this well in advance by buying global broadcasting rights for 2015-2023 for $2 billion. 

Can you guess what the viewership statistics mean apart from the tickets being sold out in mere minutes? Advertising, media, and sponsorship rights. Let’s talk about those.

The Iconic Cricket Ads

As much as we all hate the ads in cricket matches, we must also admit that those ads leave their marks. This makes businesses spend crores of rupees on advertising and sponsorship rights. Cricket ads, the most unskippable ads have a huge media value. Take any regular year, and cricket gets over 10,000 crore rupees from media rights and sponsorships.

I remember this ad from World Cup 2019, it’s been four years This impression is exactly what businesses want – an unforgettable brand image. During the World Cup, advertisers are paying over 3 lakh rupees per second. The World Cup has twenty sponsors this year from Parle to Emirates who are spending over 10,000 crore rupees within just 45 days. One year and 45 days, same revenue. That’s the scale of the World Cup.

The Revival of Hospitality

2023 is the year for the big recovery of the Indian hospitality industry. First the G20 summit and now the World Cup, hospitality is catching its breath. When lakhs of fans travel across cities and countries to watch the match, they are looking for the best travel and accommodation (or sometimes whatever is available). 

Ahead of the India-Pakistan match in Ahmedabad, hotel room charges not just doubled or tripled but were hiked over 10 times. Same is the case for all other Indian matches. This led to share prices of hospitality stocks seeing all-time highs post-COVID-19.

Dive into data: The chart below shows the share prices of hotel stocks. This is indicative of the Indian hospitality industry and the recovery we are currently seeing.

Munching is helping FMCGs Make Money

Hosting screenings at home, going out on match days, celebrating wins over drinks, and everything in between. All of this while we put on Indian jerseys. Food, drinks, merchandise – FMCG! Cricket fans across the world are on their couches spending money – the World Cup only comes once in four years after all. QSRs i.e. Quick Service Restaurants are going to get a good chunk of this money. 

Fan Buckets by KFC, Matchday Mania by Swiggy, special combos by every other food outlet and so much more. Have a look at this campaign by Zomato. They have got Chris Gayle and Ranveer Singh urging customers to order from Zomato.

QSRs are not letting this opportunity go away. In fact, they are spending money on special curations and marketing to capitalize well on it. Combine the festive season and upcoming wedding season with the World Cup, this is the time for FMCG and QSRs to milk the cash cow. Do you know Zomato might just be one of the stocks benefitting the most from this World Cup.

While media, hospitality, and QSRs are the sectors benefitting the most from the World Cup, aviation, local businesses, and travel are also seeing an upward push. The Indian government will also get 955 crore rupees in taxes, over 20% of ICC revenue from the tournament.

This is definitely great for the economy, but it also raises some inflation concerns as inflation might go up by 0.15-0.25% this quarter. With the Indian festive season and World Cup coinciding for the first time, consumer demand is keeping the economy from following global cues. While the world is struggling to keep demand stable, we are only seeing a boom. 

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