Demystifying ICC’s Financial Model
India recently lost to England in the semi-finals of the T20 World Cup. England then went on to beat Pakistan in the finals and took home a handsome 1.6 million USD as prize money. But that is a meagre amount compared to the billions of dollars involved in the ICC tournaments. Now, there arises a question of who pays for hosting all these tournaments and where this money is coming from. How do the players get paid, and from which funds? Unfortunately, the splitting of ICC’s funds is an extremely complicated subject that has been in debate for years. Although it is very difficult to manoeuvre through the finances of international cricket, here is an attempt at demystifying the complex model.
What started as the Imperial Cricket Conference between countries under the British empire eventually grew into the International Cricket Council (ICC) which is now the global governing body for cricket. With 12 full members and 96 associate members, it is the official organiser for all major tournaments. It hosts the Cricket World Cup and the T20 World Cup among other events. It promotes the ICC code of conduct for professional discipline in international cricket and appoints umpires and referees for all sanctioned test matches, ODIs, and T20s.
Since its inception, the ICC has been run by boards with the most financial muscle (originally Australia and England). They made all the final decisions regarding participation and the tournaments themselves using their veto powers. This continued till 1993 when a rise of cricket in Asian countries led to the introduction of new standards. This removed the veto authority previously held by England and Australia and provided equal votes to all members in an attempt to create a fair playing ground. However, this democratic approach was sidetracked by the dominance of The Board of Control for Cricket in India (BCCI).
The older ICC financial model meant that funds were distributed to countries in proportion to their contributions and the amount of revenue they brought in through viewership. India having one of the fastest growing populations and cricket fanbase meant that it quickly dominated over other countries. This model was referred to as the ‘Big Three’ model since India, England, and Australia collusively collected a major chunk of the funds. India having the highest share of funds became extremely dominant. It continued to have a huge influence over the decision-making of other voting members and even other aspects of how ICC handled the tournaments. Several instances were seen where BCCI pressured the ICC to remove/reprimand umpires who made controversial decisions.
However, as of the 2015 rights period, ICC made changes to its financial model. This change has led to a major decrease in the BCCI’s earnings while no other country has faced any reductions. BCCI obviously did not take this well especially as ICC had no real formula when it presented the new numbers. Completely arbitrary numbers reduced India’s funds by nearly a hundred million dollars. ICC however tried to acknowledge the importance of India and ICC’s reliance on BCCI and its contributions. Unfortunately, they claimed that this was the only way to reduce the gap between India and other countries to promote some increased equality in the council.
The majority of ICC’s funding comes from the media rights (TV and digital) that it sold to Star Sports (current rights period-2015-2023). All other ICC-approved broadcasters pay fees to Star in order to play the event in their region. Other major sources include sponsorship by brands that align themselves to the ICC events accounting for another 700 million USD.
The ICC distributes nearly 1.8 billion USD between its members and associates over the 8-year rights period (2015-2023). The BCCI (India) now worth over 23 thousand crore rupees, received 405 million over the 8 years from the ICC. Each country has major expenditures on coaching, international player retainers, and funds to host domestic tournaments among other cricket-related expenses. The funds distributed to each member/associate are listed below.
|ICC Gross Revenues(in US$)||2.5 billion||2.6 billion||2.7 billion||2.8 billion||2.9 billion||3 billion|
Big Three, mainly the BCCI and the ECB have taken the biggest hits in compensation. The matter continues to be a difficult one to straighten out with so many countries and the billions of dollars involved between them. Hopefully, ICC and its members will find the best possible solution to ensure there are no tensions between the countries and the funding they receive.