D-Day as Cricket Australia walks tightrope

Cricket Australia chief Kevin Roberts faces a line in the sand moment when he delivers the revised forecast for the next financial year.

Cricket Australia CEO Kevin Roberts must keep his stars and the states happy

Cricket Australia chief executive Kevin Roberts faces a line in the sand moment when, by the close of business on Wednesday, his board delivers to the players association the revised forecast for the next financial year.

It is inconceivable the players will accept a 25 per cent reduction as many of the states have — and all of the state and territory associations have been asked to — but it is certain that should the figure be small enough to be acceptable to the players it will anger those states who accepted greater pain.

Roberts and Cricket Australia must walk that tightrope in what they present and hold their breath to see how it is received.

The players can dispute the figures and after 30 days the issue can go to arbitration.

The last thing cricket needs is another ugly fight with its stars while it wrestles with its states.

It was a broadcast deal and a reluctance to provide its players with financial details which cost Raelene Castle her role at Rugby Australia. Her opposite number at Cricket Australia shares only half of those issues but is under considerable pressure.

Cricket Australia was due to provide the financial information on April 30, but after a month’s grace CA asked, last Friday, for an extension until Wednesday. Player contracts at all levels of the game can’t be completed until the numbers arrive and are accepted.

At the heart of the issue is a figure known as Australian Cricket Revenue (ACR), a pool of money made up from broadcast deals, sponsorships, percentage of gate and other revenue streams.

Players ride the highs and lows by taking their pay from a pool that is made up of 27.5 per cent of ACR — the percentage model was at the heart of the ugly pay dispute which Roberts steered in 2017 for then chairman David Peever.

“We fought hard to be part of a revenue sharing model, when the game is going up we go up and when the game’s going down we go down,“ Steve Smith said Monday

When the Memorandum of Understanding was signed, ACR was estimated to be around $1.7 billion across the five years of the deal, but a massive broadcast deal bumped it up to $1.96bn. The figure for 2020-21 moved up from $323 million to $407m thanks to the money extracted from Fox Cricket and Channel 7.

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It is that $407m figure that Cricket Australia wants to adjust down given the impact of the pandemic on the business model.

It is unclear what has held up the reporting beyond the changing nature of the financial situation as pandemic restrictions lift. The India tour which had looked in danger can now continue and that will contribute over $300m in broadcast fees alone to the bank, but there are other negative impacts on the bottom line according to Roberts.

Cricket is in the final stages of securing a $100m loan or line of credit from the bank.

When Roberts first rang the alarm about cricket’s finances the organisation was projecting 50 per cent cuts to business and responded with alarming haste.

Around 200 employees were stood down on 20 per cent pay and remain in limbo awaiting indications of how many will have a job in the new financial year.

Not even men’s head coach Justin Langer was spared the ignominy of being told his role was all but redundant and he remains on limited duties and pay.

A readjustment saw the emergency setting downgraded. Victoria, Tasmania and South Australia accepted a 25 per cent reduction in grants, but Queensland and NSW are still to be convinced it is necessary. Western Australia will fall in line if the two holdouts do.

Roberts laid out a series of financial blows to the business last week. The chief executive said a postponement of the T20 World Cup would cause a $20m shortfall. He also said it faces a loss of $50m from the gate if there are no crowds, and biosecurity arrangements could cost $10m.

“We’re very optimistic that we’ll be able to stage the Indian men’s tour and the other inbound tours for the season.

“We’re realistic enough to know they will look very different to a normal summer,” Roberts said.

“In terms of all the scenarios no one has a crystal ball, none of us have lived through a situation like this before and hence we’ve been forced to effectively plan for the worst and hope for the best.”