04 Apr

Cricket Australia (CA) is seeking an A$200 million line of credit from banks according to The Sydney Morning Herald. The credit facility would act as an insurance measure after CA has drawn up three broad scenarios for the next season: a 25 per cent loss of revenue, a 50 per cent loss and a 100 per cent loss. The latter would involve the end of the men’s T20 World Cup in October and November, for which CA as host will be paid a large fee by the International Cricket Council and the four-Test home series against India starting in December, which is worth A$300m and also the cancellation 2020-21 Big Bash League (BBL). Probably domestic cricket like the BBL should be able to go ahead but with great uncertainty around global travel in the medium-term future, as well as how the virus will impact India as a nation, Australia’s home international games are far from secure. There would be a fall in broadcast revenue and income from commercial partners which represent 70 per cent of cricket’s revenue. The scenario planning at CA, however, stretches beyond exactly what games cricket might be played, but they are also planning for a situation such as broadcast partners like Seven West Media or Foxtel, or sponsors like Qantas, running into financial difficulties and not paying current deals of needing to renegotiate them. At present CA does not need to call on loans immediately. Last June, according to the 2019 annual report, CA had A$26m in cash and A$90m parked in investments, but the health of their four-year revenue cycle depends heavily on whether India can play in Australia in November.

There has already been cut-backs in the states, largely funded by CA. South Australia has made 23 full-time staff redundant and those remaining had a 20 per cent reduction in working hours. Executives at Adelaide Oval have taken a 20 per cent pay cut. The 15-member CA executive including CEO Kevin Roberts, who has been fronting the whole workforce by live stream three times a week, also agreed two weeks ago to reduce wages by 20 per cent. The situation with regard to the pay of contract players is still evolving. The Australian Cricketers Association (ACA) confirmed it had informally proposed a percentage-based retainer option to CA to help deal with the uncertainty around COVID-19 and streamline the process of players’ pay being adjusted. “The players have committed to the revenue-share model in good times and bad. The players will hold up their end of the bargain,” ACA chief executive Alistair Nicholson said. “We need further information from CA about its revenues and contingency planning, that we hope to receive when available. We know this is challenging but we are working through this together as part of our partnership model.” The players agreed to ride the highs and the lows of cricket’s finances when they secured 27.5 per cent of agreed revenue streams in 2017 following a bitter industrial dispute with CA.

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