Even if India tour, nervous cricket bosses fear a backlash from broadcasters

The pessimism in Cricket Australia’s financial projections is based on fears broadcasters will ask for a discount this summer.

Australia's David Warner bats during the Sydney Test match against New Zealand at the SCG. Cricket Australia fears an 80 per cent drop in match revenue this summer. Picture: Brett Costello

The pessimism in Cricket Australia’s financial projections that has sparked a dispute with players is based partly on fears the value of cricket’s “broadcast assets” will take a hit this summer.

The organisation also concedes the India tour may not go ahead.

In an email seen by The Weekend Australian, cricket’s head body predicts a drop of up to 80 per cent in what it calls “match revenues” even if India does tour.

The players’ association has reacted angrily to the email, which was sent on Wednesday and which lays out the organisation’s estimate that cricket revenue — which determines player payments — will fall by over 40 per cent in 2020-21 and a significant amount in 2021-22. The Australian Cricketers Association told members on Thursday that the projections “do not appear to be reasonable or consistent with an obligation of good faith”.

CA appears to indicate in the email that broadcasters may ask for a discount in their contracts. While there have been similar negotiations in the football codes, they have occurred when much of the season has been lost or delayed.

“In a scenario with minimal on-field interruptions and economic impact, ACR may still fall by between 25-30 per cent,” CA’s chief operating officer Scott Grant wrote in the email to the Australian Cricketers Association.

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“This indicative range would involve a reduction in match revenues of up to 80 per cent as bans on mass gatherings remain in place, the postponement of the T20 World Cup creating a cash outflow instead of a planned income, and reductions in the value of cricket’s commercial and broadcast assets. Expenses associated with implementing biosecurity measures are expected to be ­significant.”

Grant then said that in the doomsday scenario with no Indian tour “that reduction would be significantly greater”.

Chief executive Kevin Roberts told staff he believes the chances of India touring are nine out of 10, while others in the organisation are even more positive.

COVID-19 deaths and infections are on the rise in India, which recorded a record number of new cases on Thursday, but the country is bullish about putting on an IPL event at home or abroad and has indicated its willingness to tour Australia.

Roberts argues there are other hits to the business including gate receipts, late payments by debtors, costs associated with postponing the T20 World Cup and biosecurity measures, but only the first of those has any impact on player payments under the MOU agreement.

Cricket would lose hundreds of millions in broadcast revenue alone if India does not tour, but should the summer go ahead money will flow in from Channel 7, Fox Cricket, Sony and BT. In figures seen by The Weekend Australian, Fox Sports is due to pay $100m between September and March for TV and digital rights and Seven $75m in the same period.

When combined with fees to be paid by Sony and BT, the organisation will receive over $300m in broadcast fees between September and March if the summer continues as planned.

The football codes either have or are renegotiating their broadcast agreements when parts of their season were wiped out by the pandemic, trading off discounts in the current deal for extensions into the future.

Australian cricket has postponed two ODIs to this point.

Cricket is entering the third year of a five-year $1.2bn broadcast deal but will be hit if it can’t deliver games in the summer.

The game concedes broadcasters may seek some relief as they too feel the hit on the advertising market caused by the losses to content in the winter codes.

The AFL is about to negotiate a new pay deal and has offered to open its books to the AFL Players Association, and the cricketers’ association wants a similar level of detail for the coming financial year.