Cricket World Cup is over. The loss to Australia in the final was the only bad day in the tournament for the Indian Cricket Team. But will this affect the valuation of the Indian team and players? Perhaps this is not so, experts say that business returns or profits in Indian cricket are not directly linked to the team’s performance or investment on the field. Pankaj Murarka, Founder and Chief Investment Officer of Renaissance Investment Managers Pvt., said in a note that ‘India has won less World Cups than Australia. Despite this, India is a financial powerhouse of cricket.
Players’ fees are also high
There is a bubble regarding the valuation of cricket in India and that bubble can burst any time now. Murarka has written that ‘the valuation of cricketing assets in India is more than reasonable. Players’ fees are high. More money has been invested in the game than necessary.
India has won only two out of 13 World Cups so far. That means there is a strike rate of 15%. Whereas Australia’s success rate is 50%. BCCI is the richest sports organization in the world and India’s investment in cricket is more than any other country. But the return on this investment is very low. According to him, this raises the question whether cricket is a game with low return of investment for India.
Need to invest in other sports
Murarka wrote that ‘This is what happens in the business world when more capital is invested in a company than required. According to him, if any other sport in India had got even 10% of the emotional, financial, infrastructural and national support given to cricket, then India would have become the global champion in that sport.
Murarka said that ‘Indian cricket players are many times richer than Australian players. But still India has dominance in cricket. The country has won a record six World Cups. India’s per capita GDP of $2,600 is 4% of Australia’s $60,000. He questioned the relationship between players’ performance and their rewards.
This trend is only in cricket
He said, ‘Then do Australian players get less salary? He asked why a rich country like Australia would pay less money than required to its best players. And yet the best talents will continue to emerge from the country generation after generation. According to him, people of India do not earn more in any other profession compared to high income countries. This is seen only in cricket. He asked whether the value of cricketing assets in India was excessive.
Pankaj Murarka said that ‘the countries playing cricket are less than 10% of the world GDP. He said that India has overinvested in a game with poor return on investment. He said that we need to correct our capital allocation and invest more money in other sports.
