The ICC Men’s Cricket World Cup is a highly anticipated event in the world of cricket, and the 2023 edition is no exception. Notably, this tournament is unique as it marks the first time India is hosting a One-Day World Cup Cricket entirely on its own. While India has previously co-hosted this prestigious event in 1987, 1996, and 2011, this time, it stands as the sole host nation, attracting significant attention to the financial aspects of the tournament.
In addition to the thrilling performances of teams and players, there’s a growing curiosity surrounding the expenses, revenues, and financial intricacies of the ICC World Cup 2023. People are keen to understand who benefits the most, who bears the expenses, and what advantages accrue to India as the host nation.
The primary motivation for countries to host such global events is to bolster their economies by attracting foreign visitors and investments. According to news reports, India is poised to gain a substantial USD 2.6 billion boost to its GDP by hosting the ICC World Cup 2023.
To comprehend the financial underpinnings of this event, we must first identify the three major stakeholders involved:
The International Cricket Council (ICC):
The ICC is the global governing body for cricket and plays a pivotal role in regulating and organizing international cricket competitions, including the ICC Cricket World Cup.
The ICC establishes the rules, regulations, playing conditions, equipment standards, and anti-corruption measures for the game.
Host Nation – India:
The ICC selects the host nation on a rotational basis from its 12 full-time member countries.
Ideally, one ODI World Cup should be conducted in a member nation every 20 years, though powerful nations often take the lead in hosting the tournament. In this case, India is the current host nation for the ICC World Cup Cricket.
Cricket Control Board of the Host Nation – Board of Control for Cricket in India (BCCI):
The BCCI is another significant stakeholder in the ICC World Cup. As the governing body for cricket in India, it plays a vital role in the event’s organization.
Let’s delve into the financial aspects by examining the expenses incurred by each of the primary stakeholders.
Expenses of the ICC for the World Cup include:
The total prize money allocated for the tournament amounts to USD 10 million.
The winner receives USD 4 million, the runner-up gets USD 2 million, and the losing semi-finalists earn USD 800,000 each.
Teams eliminated in the first round (group stage) receive USD 100,000, and winning teams in group stage matches collect USD 40,000.
A total of 45 matches are scheduled in the group stage for the ICC World Cup 2023.
2. Salary for Match Officials:
The ICC’s elite list comprises 12 umpires responsible for monitoring the World Cup matches.
Each umpire receives USD 3,000 per match, in addition to other fixed remunerations.
Match referees and official commentary panelists also receive compensation.
A significant portion of ICC’s profits from the ODI World Cup Cricket comes from broadcasting and media rights.
ICC grants broadcasting rights to sports channels from various countries to telecast live matches. Currently, Star Sports is the official broadcaster of all ICC events, having secured the broadcasting rights for USD 1.8 billion in 2015 for an eight-year period (until 2023).
It is estimated that ICC earns approximately USD 534 million (approximately INR 4,400 crores) from broadcasting rights during the ongoing ICC World Cup Cricket 2023.
Additionally, channels generate revenue from advertisements during the event, attracting companies from various sectors to market their products and services to a global audience.
As per Disney Star announcement, 26 brands are associated with the official broadcasters – Star Sports network on TV and Disney+ Hotstar in the digital streaming. The full list of advertisers – PhonePe, Mahindra & Mahindra Ltd, Dream11, Hindustan Unilever, Coca-Cola, Havells, IndusInd Bank, Pernod India, Booking.com, Peter England, Kingfisher Packaged Drinking Water, Mondelez, Emirates, Diageo, Jindal Panther, MRF Tyres, LendingKart, BPCL, Herbalife, Haier Appliances, AMFI, Google Pay, Polycab, Amul, VIDA by Hero Motorcorp, and Amazon.
ICC secures a variety of sponsors for the World Cup Cricket, including global sponsors, social media sponsors, and category-specific sponsors.
Each sponsor is estimated to contribute around USD 30 to 40 million to ICC.
Sponsors prominently display their logos and advertisements in various locations within the stadium and on the ground.
List of brands that are sponsoring ICC Cricket World Cup 2023
You may also like to read a blog on sponsorships in FIFA World Cup Football.
This category includes official merchandise sales by ICC during the World Cup tournament.
ICC also receives a share of the match ticket sales revenue.
Expenses incurred by the host nation, in this case, India, include:
The host nation must allocate funds for the development of critical infrastructure such as stadiums, transportation facilities, and more.
Host nations often provide full or partial tax exemptions to facilitate the seamless organization of global events.
In India’s case, while full tax exemptions were granted for the 2011 World Cup, only a 10% tax exemption was allowed during the 2016 Twenty20 World Cup Cricket.
Interestingly, no tax exemptions have been extended to ICC during the current World Cup, and an additional 21.84% surcharge has been imposed on broadcasting rights by the Indian government.
Revenues for the host nation, India, primarily revolve around:
Hosting the ICC World Cup attracts cricket fans and enthusiasts from around the world to India.
The Indian economy benefits from their expenditures on travel, accommodations in various cities where matches are held, and tourism-related activities.
Indian nationals also travel to different locations to witness matches, contributing to the economy.
Hotels, airlines, and local businesses in cities hosting matches also experience increased business, as was the case in England during the previous World Cup, where reports indicate USD 350 million in revenue was generated.
As previously mentioned, India imposes an additional 20% surcharge on broadcasting rights. The host nation also collects taxes from various sources, including ticket sales, merchandise sales, Goods and Services Tax (GST) on airline tickets, hotels, restaurants, and food delivery services. The World Cup may contribute to inflationary pressures, evident in the increased costs of airline tickets and hotel rentals in the ten cities hosting the matches. Collectively, these factors contribute to an augmented tax revenue for the nation.
Explore the details of the tech used in the ICC World Cup Cricket.
Expenses of BCCI
Expenses incurred by the BCCI for the ICC World Cup 2023 include:
BCCI is required to pay a host fee (approximately INR 200 crore) to host the tournament in India.
BCCI contributes INR 50 crore for the renovation of each of the 10 stadiums where matches are played, totaling INR 500 crore.
BCCI covers the salaries and other remunerations of players representing the Indian team.
BCCI bears the expenses for the travel and accommodation of foreign players during their stay in India.
Revenues for the BCCI are sourced from:
BCCI secures sponsorship deals for the Indian team, with sponsors such as Dream11, Adidas, and IDFC First Bank.
ICC shares revenue with the cricket board of the host nation.
The Indian government seeks to earn tax revenue from hosting the ODI World Cup in India, making it imperative for the BCCI to manage the taxes imposed on the ICC. Failure to obtain tax exemptions from the government results in the ICC deducting the taxed amount from the BCCI’s annual revenue share.
Currently, the BCCI faces potential losses, with reports indicating that it may lose INR 955 crore if the Indian government refuses tax exemption. A legal battle is ongoing in the ICC tribunal regarding an extra tax burden of INR 190 crore that the BCCI incurred when the government allowed only a 10% tax exemption during the T20 Cricket World Cup in 2016. The BCCI is actively working to secure at least a 10% tax exemption to reduce the burden to INR 430 crore.
In conclusion, the ICC World Cup Cricket 2023 is a complex financial endeavor involving multiple stakeholders. While the host nation and the ICC can realize substantial profits from the event, the BCCI faces financial challenges and potential losses as it navigates the intricate financial landscape of organizing a global sporting spectacle.
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