Cricket's financial model is broken, but there is no easy fix

By June 01, 2020

The West Indies will most likely leave for the United Kingdom (UK) in about a week from today to play England in the first bio-secure Test series in history in July.

The teams will play and whether they win the series or not, England will come away with virtually all the revenues generated from the series. For the West Indies, the story will be significantly different.

Come July 1, the West Indies players and all Cricket West Indies (CWI) staff, will be taking a temporary 50 per cent salary cut.

However, they are not alone. In April, England’s male and female players took a 20 per cent pay cut as the pandemic began to take hold in the UK forcing the postponement of the West Indies’ visit, which was initially scheduled for June.

The thing is, on this tour other than match fees, CWI does not really earn anything. Under this dispensation, wherein the regional players are going to be guinea pigs for the way cricket could be played for the immediate future, they and CWI should be receiving extra compensation.

In fact, pandemic or not, visiting teams need to get something from away series. Without an opponent, the home team has no content for their broadcast partners.

In boxing, for example, should promoters be able to put together a fight between Mike Tyson and me, we would all agree that Tyson would command the bulk of the revenue. After all, he is who they would come to see. However, a reasonable argument could be made that I should be paid fairly for having the daylights knocked out of me.

It definitely takes two to tango.

A couple of years ago, under the Dave Cameron presidency, CWI proposed changes to the current model of wealth distribution in world cricket but those were rejected as being unworkable.

Correctly citing that competitive balance is critical to the appeal of the sport, Cameron argued that: “Broadcasters and viewers are not willing to see international cricket because they are getting to see their stars anyway in the IPL or CPL. As a result, international rights have been devalued, except in the big market, which is India, England and Australia. So, 20 per cent of each series should go to the visiting teams.”

The problem with this proposal is that given what the big teams would have to pay over at the end of a tour, there would not be equitable reciprocation when their teams visit the smaller-market teams rendering it impractical.

Mumbai Mirror writer Vijay Tagore explains it like this. In a column published on May 11, he said Star pays India about U$10 million for every international match. If the West Indies plays six matches on tour, then they would earn US$12million for the tour. When India tours the West Indies, India would earn much less from their 20 per cent take.

Under the current status quo, the International Cricket Council (ICC) generates income from the tournaments it organizes, like the Cricket World Cup. Most of that money goes out to its members.

So, for example, sponsorship and television rights of the World Cup brought in over US$1.6 billion between 2007 and 2015. Sponsorship and membership subscriptions also generate a few extra million.

However, the ICC gets no income from Test matches, One Day International and Twenty20 Internationals. In this scenario, the host country gets the money earned from its broadcast partners and sponsorship as well as gate receipts.

A breakdown of the money distributed from the ICC shows that for the period 2016 to 2023, based on forecasted revenues and costs, the BCCI will receive US$293 million across the eight-year cycle, ECB (England) US$143 million, Zimbabwe Cricket US$94 million and the remaining seven Full Members, including the West Indies, US$132 million each.

Associate members will receive US$280m.

For the CWI that equates to US$16.5 a year. In addition, CWI will generate money from broadcasts of home series. However, not every home series makes ‘good money’. Based on my conversations with CWI CEO Johnny Grave, CWI only makes money when England and India tour the West Indies.

What that means is that when teams like Bangladesh, Pakistan and Zimbabwe visit, CWI loses money.

According to an ICC Paper submitted by CWI in October 2018: The revenue is inextricably linked to the nature of the tours hosted in a member country. It is also linked to the existence of a host broadcaster to exploit media revenues.

“Media values for members vary: the West Indies does not have a host broadcaster, mainly because of the size of its market.”

According to the paper, in 2008 the West Indies revenue was US$19.6m. In 2009, revenue jumped to US$48 and then in 2010, it fell to US$24.2 million. Media rights in 2017 amounted to US$22million but fell precipitously to US$987,000 by the end of the financial year for 2018.

Meanwhile, player salaries remain constant, money goes into grassroots programmes, player development, tournament match fees and salaries, coaches and coaching development, as well as support for the territorial boards. In bad years, these costs easily exceed any revenue generated.

The current model is simply unsustainable but solutions are hard to come by. In the Caribbean, sponsorship is hard to come by. Stadia remain empty because the West Indies does not win consistently enough to bring the crowds back, and for the most part, the ‘stars’ don’t play in regional competitions meaning fans stay away.

Meanwhile, the peaks and troughs in earnings against the costs associated with what is required to maintain a competitive international cricket programme, demonstrates in part why there needs to be a better way; why there needs to be a more equitable way to distribute money generated from bilateral series.

For the smaller market teams, it amounts to a hand-to-mouth existence that keeps them poor and uncompetitive. And frankly, that’s simply not cricket.

 

 

 

 

Leighton Levy

Leighton Levy is a journalist with 28 years’ experience covering crime, entertainment, and sports. He joined the staff at SportsMax.TV as a content editor two years ago and is enjoying the experience of developing sports content and new ideas. At SportsMax.tv he is pursuing his true passion - sports.

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