The intense cricketing rivalry between Australia and England in the Ashes series remains strong, but India's dominance in the economics of cricket cannot be overlooked, explains economist Tim Harcourt. With a massive fan base, lucrative broadcasting deals, and the power of the Indian Premier League (IPL), India holds a commanding position in cricket's global financial landscape.
THE FIRST TEST of the 2023 Ashes is well underway at Edgbaston in Birmingham, featuring England’s aggressive “Bazball” style of play (named after New Zealand-born coach Brendan “Baz” McCullum) and a surprise early declaration by the hosts at the end of the first day. This invited an Australian fightback inspired by Usman Khawaja, who notched a 141-run haul before being bowled by paceman Ollie Robinson (whose expletive-laden send-off is making headlines).
England currently leads by 35 runs on the end of day three, and it all sets the scene for an exciting series.
It comes just a week after Australia won the World Test Championship, defeating India in comprehensive style at The Oval in south London.
The Ashes always excites the traditionalists, as the Australia-England rivalry is the oldest in cricket.
But while playing the old enemy for the Ashes is, for many, the pinnacle of Australian cricket, Australia-India is developing as a modern rivalry.
This is significant because when it comes to the economics of cricket, it’s India that’s in the box seat, not England.
India is the new cricket powerhouse
The 2023 season of the Indian Premier League drew more than 500 million viewers, a 32% growth in television ratings on last season.
The very first IPL game of the 2023 season in fact attracted more viewers than the Super Bowl, the climax of the NFL’s American football season and one of the biggest dates on the world sporting calendar.
The 2023 IPL champions the Chennai Super Kings are valued at about US$1.15 billion (A$1.67 billion), according to Forbes in 2022. They’ve been touted as the “Manchester United of the IPL”, and may one day become one of the top global sporting franchises like the Dallas Cowboys (A$11.7 billion) and Real Madrid (A$7.4 billion).
So how did India do it?
When T20 took off in England and spread to the cricketing nations, everyone thought test cricket would die. But it didn’t. In fact, it’s stronger than ever.
If anything, it’s the game in between T20 and test cricket, the 50-over game, that’s likely to become obsolete – with only the World Cup played every four years attracting significant attention (although now the T20 World Cup overshadows that too).
India acted fast to surf the T20 wave. The IPL was formed by the Board of Control for Cricket in India (BCCI) following India’s victory in the 2007 World Cup, after a breakaway league had been mooted to break the BCCI’s grip on the game.
According to the BCCI Vice President Lalit Modi, at the time the IPL was designed to entice an entire new generation of sports fans into the grounds throughout the country. The dynamic Twenty20 format has been designed to attract a young fan base, which also includes women and children
Part of India’s success is its size, overtaking China this year to have the largest population of any country with 1.4 billion people, as well as its economic success in recent decades with a growing middle class. By 2025, India’s middle class will number 583 million, or 41% of the country’s projected population.
This has been supercharged by the digitisation of the Indian economy, with televisions and smart phones giving the average cricket lover access to their favourite teams.
"Indeed, sport is no longer about small talk, but an intrinsic part of the global economy and geopolitics"
The IPL has attracted the top cricketers from around the world, mainly off the back of private franchises, many of which are owned by billionaires. This gives teams deep pockets when buying players from all over the globe, with the TV broadcast rights topping up IPL coffers too.
This has also boosted women’s cricket, including their pay packets, with the launch of the Women’s Premier League in India earlier this year.
It just shows the power of India in world cricket, and more generally the power of sport in today’s global economy.
Indeed, sport is no longer about small talk, but an intrinsic part of the global economy and geopolitics.
I was in India last month hosting the “Cricket, Collaboration and Commonwealth” conference for the University of Technology Sydney (UTS) in New Delhi. There was a robust discussion on the economics of the IPL and the role of “cricket diplomacy” in Australia-India relations.
While I was in New Delhi, Indian Prime Minister Narendra Modi was in Australia speaking to packed houses of India diaspora in Sydney. Modi wanted to build on the momentum of the blossoming India-Australia partnership, after Prime Minister Anthony Albanese visited India in March.
Cricket diplomacy was on display then too, spawning now famous images of Prime Ministers Modi and Albanese on a chariot before the fourth test match in Ahmedabad.
Albanese used the trip to announce a new education deal with India. Nearly 50% of Indians are under the age of 25, and only 21% of Indians aged 25-34 have a tertiary qualification, so there are immense opportunities for Australian universities and TAFEs.
Cricket diplomacy has been central to the Modi-Albanese partnership, which highlights the role of sport in political and economic relationship building.
And the rise of the IPL has boosted India’s ascendancy as a superpower in world cricket. Its economic power has been as important as the improved on-field performance of Team India.
What’s more, the large attendances at The Oval for the ICC World Test Championship and now the raucous crowds at the Ashes shows the supposed death of test cricket has been greatly exaggerated.
Tim Harcourt is Industry Professor and Chief Economist at the Institute for Public Policy and Governance (IPPG) at the University of Technology Sydney (UTS). His main interests are international trade, labour markets, climate innovation and the economics of sports.
He hosts The Airport Economist TV program www.theairporteconomist.com on doing business in Asia, Latin America and Emerging markets which is based on internationally successful The Airport Economist book series. He is also the host of The Airport Economist podcast on Listnr, and the TV show After The Pandemic on China and Australia on www.ausbiz.com.au
Before joining UTS, he was Professor of Practice in Economics at the University of New South Wales (UNSW) in Sydney. He has also held senior roles in both the public sector and private sector in Australia and internationally and in the community and education sectors. In Australia he has worked for the Reserve Bank of Australia (RBA), the Fair Work Commission (FWC), the Australian Council of Trade Unions (ACTU) and the Australian Trade Commission (Austrade) and as an economic advisor to 3 Federal Cabinet Ministers and 2 State Premiers.
His latest book, The Airport Economist Flies Again!, was published by Cambridge Scholars on 1 June 2021.