Simon Katich questions how Cricket Australia could be running out of cash
The wages of Australia’s elite cricketers are under threat and player advocate Simon Katich wants to know how the code’s governing body blew their cash reserves.
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Fears that Cricket Australia’s cash crisis might rekindle round two of the game’s ugly pay dispute have prompted players to offer additional flexibility in the new central contracts due to be issued before the end of the month.
The game was rocked by revelations last week that the administration was running out of cash and had lost money on the stock market.
Cricket Australia stood down 80 per cent of its staff on 20 per cent pay on Friday. Even head coaches Justin Langer and Matthew Mott have been told they will work part-time on reduced pay until the end of the financial year.
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Players, coaches, the states, the Australian Cricketers’ Association and the wider game were shocked by revelations head office would run out of cash by August.
States have been told their budgets will be cut in half and players believe head office is coming for their money even though the hard-won MOU ensures they automatically face pay cuts if series are cancelled because their wages are calculated on a percentage of income.
There is widespread confusion as to how the game, which had $26m in cash reserves at the start of the financial year and received $100m from broadcasters in mid-March, could be out of money. Broadcasters are due to make another $100m payment in September, but that depends on the game proceeding this summer.
Cricket Australia claims it was at the low point of its four-year cycle and was sailing close to the wind with an eye to more cash coming in with the India series.
An internal report at Cricket Australia is optimistic that the BBL and India series can continue, but cricket has scoped a worst-case scenario where both do not happen — an event that would see broadcasters withhold the September payments.
CA chief executive Kevin Roberts is yet to publicly explain the situation and cancelled a video address to staff that had been scheduled for Monday afternoon.
Staff stood down until the end of the financial year were told the company would pay them 20 per cent of their pay and top it up to $750 if they could not access JobKeeper, but also insisted they take annual leave from April 27-30.
There was a concession from management that earlier claims that the organisation was well placed and could ride the downturn out were overly optimistic. Simon Katich, who was an outspoken advocate for the players during the MOU dispute, told The Australian on Sunday he and many he had spoken to could not understand how cricket could be out of cash.
“A lot of questions need to be answered and a lot of people are asking questions,” Katich said. “Everyone is surprised that they’re running out of cash with the contract period coming up, especially given how things unfolded during the last MOU dispute.
“The game has a record broadcast deal and there was supposed to be plenty of money.”
There are claims a few million was lost with the cancellation of the New Zealand short-format series but few other obvious revenue streams have been affected by the pandemic.
Cricket Australia is contesting claims the game lost over $15m on the market, saying that the position has corrected itself and losses are now considerably less.
It also defended its investment strategy, saying half the $90m invested was in fixed deposits and the other half in stocks. A spokesperson said the game had made millions in previous years and would only lose money now if it was forced to sell its stocks.
However, its annual report claims the $90m is in local and international “equity securities”.
“The majority of the company’s listed equity securities are publicly traded and are included in ASX200 Index or the NYSE International Index,” the report says.
The Australian market dropped by over 26 per cent from recent record highs in mid-March but has regained some losses since.
Nobody from Cricket Australia has spoken publicly since news about the situation was released on Thursday.
TAYLOR: PLAYERS ARE GOING TO BE HIT NEXT
Former CA director Mark Taylor, who was a director during the pay dispute that led to tours being cancelled, said players were sure to be hit by the crisis.
“There will be haircuts, as we’ve seen from CA staff,” Taylor said. “Players will be next.
“I also suspect that Cricket Australia and the ACA have been working together on this. I hope they get their heads together and sort out a good solution for the near future. Six months is a long time. It may not be long enough in this pandemic, but it might be long enough to get some cricket in October, which may save Cricket Australia and the players from taking too big a haircut.
“Nobody has a crystal ball to work out when and how much this will affect cricket.”
Players have offered to take pay cuts in the new contract period, triggered by events such as the cancelling of a tour.
“The ACA has informally proposed a new Retainer mechanism for 2020/21 that would allow the option for a player’s Retainer to be expressed as a percentage of a particular pool within the PPP (Player Payment Pool),” the cricketers’ association told its members on Friday. “This option would allow a player’s Retainer to be adjusted at various times throughout 2020/21 if and when ACR (Australian Cricket Revenue) forecasts for the period are validly updated.” The cricketers’ association is adamant that the existing revenue-share model ensures players will take an automatic pay cut if tours are cancelled.
“The players have supported and reaffirmed these agreed mechanisms, including the possibility that in tough times their payments, benefits and funds may be reduced accordingly.’’
This affirmation is given in trust that CA’s reforecasting of revenue is done on a reasonable basis and in good faith, as required by those mechanisms. The next such reforecast is due to be provided to the ACA on or before 30 April 2020.”
Cricket offers its senior players contracts around this time every year. Pat Cummins is expected to be the highest paid, with Steve Smith, David Warner, Tim Paine and Nathan Lyon all in line for deals worth over $2m.
Originally published as Simon Katich questions how Cricket Australia could be running out of cash