BIG MONEY AND CRICKET WORLD

Was it a loss for India in this T20 world cup 2021, to your surprise it wasn't a bad deal for the Indian cricket team even after being out of the race because it successfully secured $120000 prize money from ICC - International cricket council which is the governing body of cricket internally.

Who benefits from such tournaments, is it the organiser-ICC, the winning team, hosting country, sponsors or the streaming platforms?

A huge sum of $5.6 million prize money was distributed at the T20 world cup 2021. The winning team get its hands down to $1.6 million as the winning prize, $800000 to the losing team/ runner up, $400000 to the semi finalists and every team who reaches the super 12 stage is awarded with a cash prize of $40000 prize money for every match won, i.e is how India seized a sum of $120000 by winning three match in the super 12 stage. But who bears the cost of this money? It is the organising body of the tournament, ICC.

Yet this is not the only expense that ICC bears. Such tournaments have an elite panel of umpires whose annual salary ranges from 24lakh to 31lakh and are also paid a fee for every match, along with this they also have categories of commentators which are paid on fixed bases.

But ICC is no non profit making organisation, so it's not just the expense that it bears but also profits that it earns. First and the foremost are the money earned from broadcasting rights that are given to TV channels and online streaming platforms to stream these matches i.e star sports and disney hotstar in this case, in turn of this right or permission given, ICC is offered money. ICC has made a deal with star sports till 2023 in 14000crore rupees. Second source of income is the money drawn by sponsorships- global, category, social media are categories of sponsors. Nissan, oppo, Bijuys, MRF, emirates were the major clutch of global sponsors of world cup 2021. These brands are advertised during the tournament in return for which they pay to ICC.

Now let's take a look from the perspective of the hosting country, though there are many indirect benefits which cannot be stated in monetary terms but the ones that can be is the money the country earns from tourism. During the tournaments a lot of foreigners travel across the countries to witness matches in the stadium, which not only boosts short term employment generation but also gives a steep rise to the business of nearby hotels, restaurants, bars etc. which positively impacts the countries economy and gross domestic product-GDP. And if the country proves to have successfully held a world cup, it improves the countries stability in the world, leading to increase in its soft powers and this results in the scope of greater foreign investments in the longer run. And while preparing for the world cup the country upgrades its infrastructure which offers better living standards to the residents of the country. But this upgradation comes with a cost, and not just this the major expense that the country has to bear is the tax exemption i.e. the tax free zone which is given to the organizer which approximately cost millions of dollars.

In 2006, during the FIFA world cup, Germany estimated a tax exemption of Euro 250 million but the revenue generated out of it was $400 million. So overall the revenue generated is usually more than the tax exemption, so the country is able to cover its cost and make a good margin of profits.

However this may not be true in every case, in 2014 when Brazil hosted FIFA the estimated expenses were $15billion and the revenue generated was only $13.8 billion. Similar was the case of FIFA, when it was held in South Africa.

Originally the T20 world cup was also planned to be organized in Australia but due to the pandemic the tournament had to be postponed from 2020 to 2021. India offered to host the tournament but according to the official statements that owing to the pandemic condition in India it was decided that it would be held in Oman and United Arab Emirates but according to a reports it was because BCCI failed in securing the tax exemption issue and stating facts, BCCI the India cricket governing body would have to pay rupees 906 crore if the central government allowed partial tax exemption in this world cup 2021.

However, BCCI has its own sources of income, it gets a share in the revenue earned by ICC in Broadcasting rights, it also has its own revenue source from Sponsorship. MPL sports has been the major sponsor till 2023, they also have the right to sell merchandise with a base price of Rs 6.5 million, and Rs 3 crore per year are paid to BCCI for this right. Estimate BCCI earned $12 million in 2021 world cup

Broadcasters earn through advertisements that are ran in between matches. A total time of 2700 seconds of commercial air time was allotted for playing advertisements, considering the reports 10-11lakh were charged for every 10 seconds of ad, landing up to a total earning of $12 to $12.5 billion.

Tournaments like these are big game changers, and there goes so much on its backend. They may serve us entertainment, thrive in patriotism in individuals but are associated with a big business model, investment and are subject to much planning, strategy, politics and analysis.