ICC CWC 2023: A sporting spectacle with glimpse of economic prosperity

The Cricket World Cup 2023, set to be held in India from 5 October to 19 November, promises not only an epic spectacle of sport but also a significant boost to national and global economies.

Beyond the substantial revenues that the ICC anticipates from the Men's Cricket World Cup, businesses, tourism and the job market within India, the host nation, are poised to trigger a financial windfall from the tournament.

Sponsorship deals and broadcasting rights
The catalyst of this economic surge is primarily driven by how ICC generates revenue through sponsorship deals and broadcasting rights. In 2019, the ICC World Cup held in England and Wales witnessed conglomerates like Nissan, Oppo, MRF Tyres, Emirates, and CocaCola as global partners. The sponsors shelled out around $40 million each, generating an almost $200 million uptick in the global economy. Fast forward to 2023, and the ICC has secured a roster of global, official, and category partners featuring prominent conglomerates like Emirates, MRF, BharatPe, Coca-Cola, and 18 such entities in total, further propelling the cricketing economy.

Television rights are another significant revenue churner. Star India bagged the global broadcasting rights for the 2015-2023 cycle for approximately $2 billion. Compared to the $1.1 billion ESPN Star paid for the 2007-2015 rights, a nearly 82% spike exemplifies how the demand for cricket content has skyrocketed worldwide. According to a report on ESPNCricinfo, the ICC's broadcasting income from the 2023 Cricket World Cup in India is estimated to reach an impressive $533.29 million.

Drawing a parallel comparison, the FIFA World Cup 2018 generated a total revenue of $6.1 billion, with $3 billion coming from broadcasting rights and $1.45 billion from marketing rights. While football's global reach is more comprehensive, the Cricket World Cup's monetization potential must not be understated.

Impact on the host nation's economy
It's important to note that the financial impact of the World Cup is not limited to sponsorship and broadcasting rights. The tournament also contributes significantly to the host nation's economy. India, the host for the 2023 edition, is likely to see a boom in the tourism, hospitality, and transportation sectors. In 2011, when India co-hosted the tournament, approximately 400,000 domestic and international tourists visited, contributing an estimated $500 million to the national economy.

The impact of the World Cup on the job market is also substantial. The 2015 Cricket World Cup in Australia and New Zealand created over 5,000 jobs and added $1.1 billion to the economy in expenditures from an influx of international visitors.

A similar pattern was observed in previous tournaments. The 2003 cricket World Cup in South Africa injected $475 million into the local economy and created approximately 2,000 direct jobs. England in 2019, reportedly reaped an estimated economic benefit of over £350 million ($460 million) with significant boosts to various sectors such as retailing, hospitality, and tourism.

The halo effect
Beyond these direct financial impacts, there are also significant indirect economic benefits. The halo effect that such a global tournament creates for the host country in terms of leveraging sport to strengthen its national brand and its international profile, increased tourism, recognition, and attractiveness as a business destination is immeasurable in monetary terms.

Meanwhile, it's crucial to consider the economic disparities such a tournament could create with ticket prices skyrocketing and local businesses potentially being overshadowed amid massive commercial partnerships.

A little on the backfoot
Apart from the surmounting economic upturns that the Cricket World Cup 2023 stands to generate, there are also looming challenges brought forth by India's strict tax regulations.

According to ICC norms, host nations must grant tax exemptions, but India's rules don't allow this. As a result, there's a prospective tax surcharge of 21.84%, equivalent to Rs 955 crore ($116 million), on ICC's broadcast revenue from the 2023 ODI World Cup. This surcharge will be deducted from the share of ICC's central revenue pool allocated to BCCI. Over the current rights cycle spanning from 2016 to 2023, BCCI's share amounts to approximately $405 million based on ICC's overall earnings for the period (estimated to be around $2.7 billion).

As a matter of fact, during the time period (2016 - 2023), The England and Wales Cricket Board (ECB) are getting the second highest share with $139 million, and the cricketing governing bodies of Australia, Bangladesh, South Africa, Pakistan, Sri Lanka, and New Zealand are to receive $128 million each. The other two World Cup-playing nations Afghanistan and Netherlands are supposed to get from a collective pool of $240m that is to be divided among 94 Associate Nations.