Glory road
Major sports event like the Cricket World Cup 2011 not only affect national sentiments but also the national economies

The euphoria surrounding India’s victory in the World Cup is yet to die out. For a nation where cricket is almost a religion, winning the cup after 28 years brought unbridled joy and cheers. But even before the finals were played and the last runs were scored, Cricket World Cup (CWC) 2011 had already made its mark in terms of its economic impact on the country.

Any major sporting event in the world today is as much about business as it is about sports, if not more. Countries compete amongst themselves for hosting rights of such events. Events like Olympics or FIFA football world cups are some of the most coveted ones.

CWC Economics
Even though the ICC CWC is a smaller event compared to the above mentioned ones, it is nonetheless quite a major event in economic terms. CWC 2011 witnessed Rs 700 crore worth of on-air advertising and sponsorships, Rs 300 crore worth on-ground sponsorship and an additional Rs 200 crore of promotional activities and merchandise. Needless to say, major corporate companies vied for sponsorship rights for all these heads. CWC 2011 had 4 major event sponsors; Pepsico, LG Electronics, Hero Honda Motors and Reliance Communications. Each of these companies had supposedly paid Rs 75-80 crore each to bag these rights. Castrol won the rights of ‘Special Performance Partner’ under which the Castrol logo was to be displayed on the scoreboards during each match, along with the Castrol Cricket Index, a rating system devised by the company. Besides these, there were official sponsors for almost every other aspect of the tournament, directly or indirectly related to the matches themselves. For example, Reebok had the rights for the players’ kits; Moneygram was the official sponsor for all money transfers for the tournament; and Yahoo bagged the rights for hosting the official website for the tournament.

The fight for rights
ESPN-STAR had the broadcasting rights for the tournament. In return, they earned Rs 55 crore each from the joint presenting partners like Sony, while associate sponsors like Nokia, Maruti Suzuki etc had to pay Rs 35 crore each, simply to feature their advertisements during the matches. Slots for advertising were sold at Rs 5.5 crore/10 seconds, while the company withheld a certain proportion of such slots only to be sold later at premium prices.

For these companies, official sponsorship is just a right that they can use for their own individual product promotional campaigns, the price for the tag of ‘Official Sponsor’. LG spent an additional Rs 40 crore on mobiles and Rs 30 crore on promoting its other products with the official sponsor tag. Reliance Communications used this opportunity to highlights it new 3G services, spending an additional Rs 60-70 crore on it. Pepsico’s ‘Change the game’ advertisement along with Nike’s ‘Bleed Blue’ campaign featured a string of Indian cricketers, for which these companies had to spend huge amounts. Castrol bagged Sachin Tendulkar, the biggest icon of the game as its brand ambassador.

The whole idea, of joining the tournament band wagon as sponsors, is to grab eyeballs. While the entire nation poured onto cricket, the associate brands sought to present themselves in the milieu, to get some of the public attention. And apparently, it did work out. A report by Experian on the Internet statistics bears testimony to it.

On the Internet
In today’s world, the Internet is the most important medium of interaction. Even for something like a real life, live-action sporting event, the virtual world is an important medium. Score updates and live streaming are the most commonly searched sports related features on the net. ESPN-STAR was the most obvious gainer in this regard. Their net hits increased by 5000% during the CWC 2011! LG site had a rise in total hits by 110%, purely because of ‘CWC 2011’ based searches on the net. Castrol India had launched a special site called Castrol Cricket, where it put up live scores, statistics, the Castrol Index, contests etc. Castrol Cricket was the fifth most popular cricket site on the net, and raised its overall visibility from 1583rd to 151st for the short span during CWC.

Yahoo was the biggest gainer. Thanks to hosting the official ICC CWC 2001 site, it became the number 1 cricket site having maximum hits during the period. It even beat ESPN-STAR in terms of total traffic during the period. The advertisement revenues for all these sites also rose given such ‘hit’ statistics. All these companies gained as they included cricket world cup 2011 in the keywords and search tags as part of the rights as official sponsors of the event.

Behavioral Economics
How much all this does translate into actual commercial gains in terms of sales figures is not known. But these statistics do serve as useful indicators to make some judgments. The impact of such sporting events is not just limited to consumption patterns only. Behavioral economics is a very interesting branch of economics that looks into how psychological frameworks determine the behaviour of economic agents like consumers and even investors.
A Study by Vinod Mishra and Russel Smyth in 2010 found that while a win by the Indian Cricket team does not have upward significance, a loss however does result in downward movement in the stock market. Interestingly, when Sachin Tendulkar, the god-like icon of Indian Cricket, plays, the downward movement on event of a loss is greater! It is now well accepted that market sentiments that determine macro level investment patterns, whether bullish or bearish, depend a lot on overall social sentiments or mood swings. Given that cricket can influence our nation more than anything else, the fortunes of the Indian cricket team end up influencing the fortunes of the SENSEX.

The outcome
Thus, India winning CWC 2011 on home ground not only augurs well for all cricket lovers in the country, it also means that the numerous business ventures linked to the tournament have also fared well. This has brought cheers even amongst the business community with tangible positive economic effects. Of course, if India were to make an unfortunate exit during the course of the tournament at any stage, the story would have been different. That they did not; not only made us proud but also made some of us richer! The sentiments for the historical win may wane out, but its direct economic impacts are here to stay. Clearly, the gentleman’s game is also the businessman’s game.