• June 11, 2024

Cricket Lovely Cricket!

By: Vangie Bhagoo-Ramrattan Head, Economic Research Unit First Citizens

Commentary

The month of June 2024 is expected to be an exhilarating one for cricketing fans around the world, as the Caribbean, together with the United States (US), co-hosts the 2024 International Cricket Council’s (ICC) Men’s T20^[1] World Cup. The West Indies last hosted such an event for the 2010 World Cup, and before that was the 2007 One Day International^[2] (ODI) World Cup tournament. Cricket is an integral aspect of Caribbean life and the relatively new format of the ‘gentlemen’s game’ has grown in appeal to a much wider audience, given the shortened and more action-packed format of the game, made even more popular by the excitement of tournaments such as the Caribbean Premier League (CPL) and the Indian Premier League (IPL). Cricket has transitioned to a very lucrative industry involving large investments and encompasses substantial contracts, sponsorship and media rights, and many other areas of critical economic importance. The region has and continues to invest in the development of the game, both in terms of talent as well as infrastructure, not only to ensure continuity of this great West Indian tradition, but also in a bid to promote and accelerate sport tourism in the Caribbean. 

ICC Men’s T20 World Cup

The West Indies and the US will be co-hosting the World Cup event throughout the month of June. The event features 20 participating nations across 55 games. In the Caribbean, host countries are Antigua and Barbuda, Barbados, Guyana, St Lucia, St Vincent and the Grenadines and Trinidad and Tobago, while in the US, games will be held in Florida, New York, and Texas. The Caribbean will host 24 group stage games, and all 12 second round matches, including the semi-finals and finals.

Table 1: Caribbean Venues and Games  

With most of the games being hosted in the Caribbean, the region hasbeen assiduously preparing for this one-month-long tournament by upgrading existing infrastructure and ensuring that facilities are up to standard. In preparation of the World Cup back in 2007, both Guyana and Antigua and Barbuda would have constructed their stadiums, while the other venues have existed for decades. In fact, Kensington Oval in Barbados, which will host the finals, has the largest permanent capacity in the entire region (28,000) and one of the oldest in the region also, hosting games for more than 120 years.

Upgrades and refurbishment of other venues in T&T, St Lucia, Antigua & Barbuda and St Vincent & the Grenadines have also been going on for months prior to June 2024, at significant costs.

St Vincent & the Grenadines’ Prime Minister noted that the initial budget to refurbish the Arnos Vale Sporting Complex was XCD33 million but was subsequently revised to XCD38 million while Antigua & Barbuda has spent around USD2.6 million in preparing the Sir Vivian Richards Stadium. In Barbados, the cost is estimated at BBD49.5 million, of which around 75% is earmarked for improvements to Kensington Oval.

These investments into the development of cricket in the Caribbean are crucial for the sport’s sustainability and to further monetize the benefits that can accrue. The economic impact of a sporting event can be defined as the net change in an economy resulting from the acquisition, operation, development and use of sport facilities and services (Lieber & Alton, 1983). Hosting sport mega events such as these can have significant benefits for the region, as it did back in 2007. It has the potential to transform countries by generating substantial economic activity, directly and indirectly, as well as employment opportunities. There are also benefits that can come from visitor spending and inflows of foreign exchange as a ‘net export effect’. Simultaneously, these large investments can worsen fiscal sustainability given that many of the countries in the region already struggle with weak fiscal positions, characterized by large fiscal imbalances and onerous public sector debt.

Caribbean’s Current Economic State

The Caribbean has been struck by successive external shocks over the past few years, namely the pandemic and then the commodity-price shock which both debilitated economic activity and derailed many economies. While economic growth has rebounded for some countries, many remain below their pre-pandemic performance. In its April 2024 World Economic Outlook, the International Monetary Fund (IMF) estimated that the Caribbean grew by 8.3% in 2023, supported by 3.5% expansion among the tourism-dependent economies, and 16.1% growth among the commodity exporters, led by 33% growth for in Guyanese economy. For 2024, this strength is expected to persist, with expectations of 9.7% average growth in the region, but skewed by 33.9% rate of expansion forecasted for Guyana, as they continue to benefit from the burgeoning energy sector. Table 2 outlines the growth projections for the host World Cup countries:

Table 2: GDP Growth Rates – Host Countries

The Caribbean has long endured a vicious cycle of low growth and persistent fiscal imbalances which worsened indebtedness. This situation was only made worse by the pandemic, which required substantial government expenditure to support the economy as well as the socially vulnerable during that time. As at the end of 2020, the average general government debt for the Cricket World Cup (CWC) host countries stood at 89% of GDP, with both Barbados and Antigua and Barbuda above 100% of GDP, with the average fiscal deficit of 7.8% of GDP. While improved economic activity since the pandemic has helped to reduce these ratios, at the end of 2023, the average debt remained high at 72.8% of GDP and fiscal balance persisted in a deficit position of 3.9% of GDP. The host countries are all expected to average fiscal deficits over the period 2024 – 2026, with Guyana forecasted to record the highest shortfall of -4.6% of GDP during the period, and Barbados with the smallest deficit of 0.7% of GDP. The average gross debt is forecasted at 70.6% of GDP for the host countries, with Barbados slightly above the 100% threshold.

Benefits to the Caribbean

Cricket West Indies (CWI) President has estimated that the tournament is likely to yield USD300 million in direct economic impact for the Caribbean. Additionally, “it is anticipated to captivate more than a billion viewers worldwide through television broadcasts, further elevating the global stature of the Caribbean as a sporting and tourist destination”.
The Chairman of the National Organizing Committee in Barbados is estimating benefits of BBD120 million for the country, largely from visitor spend as they expect approximately 25,000 visitors to the island, with an average spend/ night of BBD700. The cricket tournament extends the traditional tourist season, which usually runs from around December – May, by a month. The CWI President has also indicated that the increased visitor arrivals associated with the CWC will indirectly and positively impact jobs and revenue streams. The injections into the domestic economies will also likely raise aggregate demand and overall economic activity.
According to a study done by Turco et, al, entitled: ‘2007 Cricket World Cup Sport Tourists: The Caribbean Experience,’ the 2007 matches were viewed by 2.2 billion television viewers over 200 countries and attendance for the entire 2007 CWC averaged 11,176 per match.
The UK benefitted from an estimated GBP2.5 billion when England and Wales hosted the 2019 Cricket World Cup, which included GBP900 million from ticket sales, GBP500 million from broadcasting rights and GBP400 million from sponsorship deals. The tournament also brought over one million visitors from overseas, who spent an estimated GBP1.1 billion on accommodation, food, and other goods and services.

Over the Boundary…

Cricket is deeply embedded in the culture of the West Indies and perhaps one of the few areas that bring the region together. However, gone are the days of it being just a sport. Indeed, cricket and generally, sport tourism has grown in economic importance over the years, with the phenomenal success of the CPL and various cricket tours in the Caribbean, by international teams. It is important that the large investments into the sport tourism industry pay off, since the region continues to grapple with large fiscal and external imbalances and as financial resources remain relatively tight. Interestingly, Jamaica made the decision to opt out of submitting a bid to host the CWC, citing the cost-benefit analysis and the ‘limited resources’ in the island, and instead announced investments into the country’s development of youth and schools’ cricket over the next five years.
The region stands to benefit greatly from hosting such a prestigious event in the cricketing world and to further develop the sport tourism industry, which has tremendous potential as a viable means of economic diversification. The development of the industry must, however, be policy-driven to ensure transparency and consistency. Hosting the CWC tournament in the West Indies will hopefully be another key building block in the further upliftment of the sport tourism industry in the Caribbean, particularly in the field of cricket.

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[1] T20 refers to the shortened form of the game, with each team facing 20 overs.

[2] ODI’s are 50 over limited cricket matches.