Why does Cricket in India and the market go hand-in-hand
Background
Cricket Forms 85% Of Indian Sports Economy
BCCI Generated Rs.3,730 Crore In 2019-20
BCCI Is The Richest Cricket Board In The World
Case Characteristics
- As per the last financial report of the Board of Cricket Control in India (BCCI), they earned close to Rs.3730 crores in 2019-2020 Covid-hit season
- IPL brought in the major chunk with Rs.2500 crores, followed by Rs.950 crores from bilateral series and Rs.380 crores from India’s share from the International Cricket Council
- OPPO, Indian cricket team’s kit sponsor, had originally paid Rs. 1079 crore (approx USD 162 million) for their 5-year deal, which was double the base price of Rs. 538 crore (approx USD 81 million) set by BCCI in 2017. As per the deal, OPPO would pay Rs. 4.61 crore (approx USD 693,000) per match for bilateral series and Rs. 1.51 crore (approx USD 227,000) per match for ICC sponsored tournaments.
- Currently, the sponsorship contract has been transferred to edtech firm Byju’s who is paying 5% additional to the remainder of the balance payments
- On-ground & franchise sponsorship revenue reportedly crossed Rs.1100 crores during IPL 2021
- In 2020, with US$405 million out of US$1,534 million, India had 26% share in the ICC FTP income disbursed to 10 Test playing nations.
- BCCI does not depend on the Government of India for its finances and hence is a private entity.
Fascinating Findings
- Television boom in India in the 90s brought TV advertising to the fore. Soft drink giants like Pepsi and Coca Cola, energy drink Boost and Bournvita, FMCG brands like Britannia and telecom operators like Reliance and Hutch (now Vodafone India) cashed in on this emergence.
- According to the 2020 report ‘Impact of COVID-19 on Revenues of World Cricket and Indian Sports’ authored by Sundar Raman, former COO of the IPL, cricket accounts for almost 85% of the Indian sports economy with IPL
- Of the total televised sports viewership across India, cricket holds a whopping 79%. This means ever second of visibility during a cricket match in India could mean major business for brands.
- According to Business Today, every 10 second TV advertising spot from the total 2600 seconds available each match during the T20I World in 2021, cost anywhere close to 18 to 19 lakhs when India played.
- Economists Dr Vinod Mishra and his colleague Prof Russell Smyth at Monash University, during one of their studies of Indian cricket and its impact on the economy in 2010 had interestingly found that India’s main index, the CNX Nifty show that the Nifty Index was generally flat the day after a win, but the day following a loss the index dropped by an average of 0.231 per cent. The drop following a loss was more than seven times greater than the movement following a win.
Actionable Alternatives
- For 2022, BCCI plans to bring back its cash rich league IPL to the Indian shores, with an eye on grabbing the in-stadia ticketing and advertising revenues too.
- Further, BCCI has already finalised the entry of two new teams into the league, which means a bunch of more advertisers and sponsors for the team, which means a jump in revenue.
- A popular cricket-based OTT show Inside Edge now comes up with a third season. This shows how the popularity of cricket now spills into the OTT entertainment space too.
- Hotstar, the OTT streaming wing of Star Sports, is now giving our smaller ad spots during its cricket live match streamings, to attract more brands. It is eyeing a massive Rs.8500 crore revenue from the remaining years of its contract in 2022 & 2023.
Remarkable Results
BCCI Tops Charts
The BCCI is now ruling the ICC as the richest board in the world along with England & Wales Cricket Board and Australian Cricket Board.
Byju’s Wins Big
Edtech brand Byju’s app downloads touched 50 million and 60% increase in traffic post becoming a regular feature on Indian team’s jersey.
Cricket Bigger Than Baseball
Cricket is now the most profitable sports in the world, generating more money from sponsorships than Major League Baseball
