Press Release

Million-dollar middle-ager

23 March 2015

 ?If cricket was a classic rock song, the World Cup would be its guitar solo – that bit which everyone looks forward to and remembers long after it’s gone. Like the guitar solo sells the song, the World Cup is cricket’s most salable asset. The 2015 World Cup will easily be the most followed, on television, on social media and on the internet at large. The digital age is here.

It wasn’t always thus. There were simpler times when only those with a ticket could view the action. Now, a combination of economics and greater fan following has taken cricket beyond the traditional pockets. As those from different corners of the world gather in Australia and New Zealand for the 11th edition of the premier competition, it is worth looking at the tournament’s journey from a nervous experiment to a global spectacle from a financial perspective.
Let’s start with the players. Apart from the worldwide recognition and popularity, at stake is the considerable prize money. When West Indies won the inaugural World Cup in 1975, they collected £4000 (nearly £30,000 adjusted for inflation) for their efforts, from a total pool of £9000. The losing finalists got £2000, while the Man of the Match in the final bagged £200. Lucrative numbers at that time, certainly.
As the world around it evolved, so did the popularity of the World Cup grow. Sponsors began to pour in, TV deals were signed and everyone jostled for a piece of the pie. The 1987 World Cup, jointly hosted by India and Pakistan, received a windfall as Reliance Industries broke the million-buck barrier with £2.17 million as sponsorship fee. The prize money on offer rose substantially, too. From £66,200 in 1983, to a sizeable £99,300 in 1987.
In 1992, the tournament assumed a bigger, more radical skin. Whites were dispensed with as coloured clothing, white balls and floodlights were introduced to augment day-night matches. Television took on a bigger role and a strange rain rule triggered all sorts of debates. The tournament was of a higher profile, and players were the direct beneficiaries. Martin Crowe, the top-scorer with 456 runs from nine matches, won the Man of the Series award and walked away with a Nissan 300. In 1996, Sanath Jayasuriya won an Audi A4.
In subsequent editions, Sachin Tendulkar received a golden bat (2003), while Glenn McGrath was given a diamond-studded cricket ball (2007). In keeping with the trend of each event being more rewarding than the previous one, the 2015 World Cup will be the most lucrative yet. The ICC announced a 20% increase in prize money from the 2011 edition, with the total prize money pegged at an impressive $10m. The winning team stands to earn $3.975m – a figure that could go up to over $4m if they are undefeated in the tournament. Each win in the group stages alone is worth $45,000. The six teams who fail to make the quarterfinals will also be rewarded $35,000 each.
Keep in mind that much of this boom happened when the rest of the world was struggling through recession. People don’t usually get saturated with sport. Which is why the organisers – the ICC – are happy. How does the ICC run something as large-scale as the World Cup? Where does the money come from? Sponsors and broadcasters.
As far as sponsors are concerned, the World Cup has had steady backing. The first three tournaments in England were backed by the Prudential Assurance Company, which invested £100,000 in 1975 and signed off with £500,000 in 1983. Then came Reliance Industries in 1987, before Benson and Hedges pumped in £3m for the 1992 tournament. The Wills World Cup in 1996 was the last tournament with a title sponsor, Wills contributing £8m.
Thereafter, the ICC took control of the running of the World Cup (until then the home boards were in charge), doing away with naming rights. The results could be seen shortly into the new millennium, as Global Cricket Corporation splashed $550m for the right to broadcast World Cups 2003 and 2007. ESPNStar changed the broadcasting landscape with a mammoth deal of $1.1 billion.
The 2015 World Cup will have a wide range of sponsors – LG, PepsiCo, MRF Tyres, Hyundai, Reliance – all of whom have a strong presence in India. This is no coincidence. With a population of over 1.2 billion, India possess the biggest market in cricket, and that’ll inevitably influence both sponsors and broadcasters.
The ICC’s World Cup 2015 ‘Commercial Partner forum’ in August last year included Star Sports, Super Sport, BSkyB, ESPN, Fox Sports Australia, Sky TV New Zealand and Channel Nine – all leadingbroadcasters across the world, all rolling out the big bucks to telecast the tournament to respective audiences.
These days, television rights go for billions. It is the engine that drives the sport. WhenESPNStar bought broadcast rights in 2006 for the period between 2007 and 2015, they paid almost twice the previous deal. In December 2014, the ICC announced “cricket’s biggest-ever global broadcast partnership” after awarding rights for all ICC events for the next cycle, from 2015 to 2023, to Star India and Star Middle East. The exact figures were not disclosed, but, according to the ICC, is supposed to be “significantly in excess of the ICC’s previous commercial deals”.
Why are people willing to spend such huge amounts on broadcasting a sport that is still largely considered niche? Why is the World Cup so lucrative? The answer, again, is in its reach. In the 2011 World Cup, when India and Pakistan clashed in the semifinal, an estimated 900 million tuned in. When the two teams clash again in the group stages on February 15, that figure is expected to hit a billion, at least.
For advertisers, these figures are akin to an all-you-can-eat buffet. You don’t have to be a commercial partner of the tournament to be associated with it. Adidas was the official sponsor of the Fifa World Cup in Brazil in 2014, but while the brand’s name was plastered everywhere, the likes of McDonald’s and Nike made as much of an impression with their ad campaigns. McDonald’s GOL! exuded feel-good, showing common Brazilian folk doing extraordinary things with a football. Nike, with its Winner Stays campaign, captured fans’ imagination as regular kids in a neighbourhood park transformed into their favourite players and played in front of a packed stadium. Ambush marketing but within the ambit of the rules – that will dot this World Cup as well.
As was the case during the 2011 World Cup. Though LG is one of ICC’s commercial partners, Sony ran its Bravia range of television sets campaign featuring Mahendra Singh Dhoni. The ICC’s contention was that Dhoni was in a blue shirt that bore a striking resemblance to India’s blue kit. The issue was eventually sorted out, with Dhoni’s shirt colour changed to grey in subsequent ads.
To protect its commercial rights, the ICC has teamed up with Copyright Integrity International (CII) to monitor any infringement of its sponsors’ commercial rights. “Each ad is open to interpretation. So the players and teams are advised on what ads they can appear in during the World Cup,” explained Roshan Gopalakrishna, the legal and business head of CII. “A lot of letters have gone out to these brands, and it will help because it means all your infringements are out of the way. They will think twice before offering tickets, they will think twice before using the colour blue. The message that gets sent out is that there is someone monitoring all this, and so it really is up to how their marketing teams can come up with a solution to it. We’ll continuously be monitoring these ads.”
The ICC’s World Cup 2015 ‘Commercial Partner forum’ in August last year included all the leading broadcasters across the world, all rolling out the big bucks to telecast the tournament to respective audiences. © Getty Images
This time around, given that the tournament will be staged in Australia and New Zealand, protection of commercial rights is expected to be easier, at least in these two countries. “The context here is of two western countries, where enforcement of intellectual property rights is much easier. For this World Cup, there is an entire list of words and terms that are protected by law in Australia and New Zealand,” said Gopalakrishna. “At least in those two countries, none of the rivals can use any of the listed terms in advertising. It still happens elsewhere, but it depends on the position of the law. For example, the term Cricket World Cup is protected, but in India, ‘World Cup’ is a very generic term, and it can apply to multiple sports. So in India, it’s just a case of being on the lookout.”
It all goes to show what an opportunity the World Cup is for advertisers, and their clamour to get on board without actually being on board. According to reports, ad spends in India during the tournament are expected to range around Rs 1500 crore – around the same range as in 2011, which is a positive given that the 2011 tournament was held in India during prime time. Ad rates during World Cups have increased exponentially as well. During the 2011 World Cup, a ten-second spot was worth Rs 3-4 lakh, a figure that mushroomed as India progressed towards the finals. This time around, a ten-second spot could cost around Rs 5 lakh.
All these are huge figures, suggestive of how far the tournament has come as a commercial entity. Long before the Cricket World Cup came into being, other sports already had their global events in place. Indeed, the 1975 World Cup was an accident of sorts, but the event has clearly come a long way since then. To paraphrase Scyld Berry, the World Cup is now a middle-aged man of 40, wise and assured, but still possessing the old flamboyance of a classic rock star.
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