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Explainer – What went wrong with CSA’s plans for GLT20

October 10th, 2017 | by admin
Explainer – What went wrong with CSA’s plans for GLT20
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The prospect of suffering up to five years of financial losses forced Cricket South Africa to postpone the inaugural edition of the T20 Global League, which will now only kick off in November 2018. Four days after offering an assurance that the tournament will go ahead as planned, CSA’s acting CEO Thabang Moroe on Tuesday revealed the financial model was not sustainable and CSA needed more time to create a profitable event.

“What has changed is numbers. We looked at our model and we are still very confident with it. But for the model to work, it needs to have money supporting it. That money cannot be money coming from CSA alone,” Moroe said.

“If you have a model that says, I need x-amount of money coming from broadcasters, x-amount coming from sponsorship, then if any of it changes, automatically it forces you to go back and have a look at your model. You can’t keep reworking your model to accommodate for where CSA is hurting. It becomes reckless trading as far as the board is concerned. The model itself is fine. But it needs to be supported by money coming in from outside CSA.

“If you look at the numbers that have been put in front of us in terms of broadcast and sponsorship deals, we were going to make losses of between US $6-8 million every year for the next five years. It’s a no-brainer (to postpone) if you look at numbers.”

How did CSA get this so wrong?

It seems to come down to gross miscalculation of the worth of the product the board was proposing.

CSA had initially hoped to strike a broadcast deal of around US$20 million but had no takers. It was negotiating with SuperSport, who already hold the rights to cricket played in South Africa, as well as companies in India and the UAE. Since the tournament was slated to take place at a time when other international teams will be in action and did not have big Indian, Australian and English names, a foreign broadcaster was a tough ask. Meanwhile, SuperSport originally believed they would have the rights even if a new tournament began and are understood to have played hardball. Some reports quoted figures of barely $6 million being offered.

On Friday, when Moroe addressed the media, he said CSA will look at a combined broadcast and sponsorship deal of $17-18 million, which is a little more than half of what they had first hoped for: a deal of $32 million. Moroe anticipated a loss of $25 million in the first year, which amounts to half of CSA’s cash reserves.

Who was responsible for this?

Pointing fingers will result in entering dodgy legal ground but on the face of it, everyone involved deserves some of the blame. The CSA will need to look into matters of the league as well as its own systems, and present the facts and a way forward.

The tournament was the brainchild of former CEO Haroon Lorgat, whose departure from CSA two weeks ago was partly because the board was unhappy with his actions in putting together the GLT20. Moroe said the board “does not believe it was fully appraised” of Lorgat’s activities, and there is a possibility of further investigation.

“The board takes full responsibility in terms of everything that’s happened,” Moroe said. “The board took its trust and placed it in the hands of a few individuals and obviously not all the information that the board needed to have in order for the board to be comfortable enough to continue with this league, that information wasn’t forthcoming and some of it is still not forthcoming.”

At the same time, CSA’s board waited for three-four months before acting on suspicions that information was being withheld from them. Moroe admitted to a failure of the board’s checks and balances and said it was working to gather all the information needed to understand the inner working of its own tournament.

The South African Cricketers’ Association (SACA) has called for CSA to conduct an independent review into what transpired.

How does CSA hope to fix things in a year?

It’s unlikely that the league will differ significantly from its current look and feel so all CSA can hope for is to nurture relationships with broadcasters and potential sponsors. Moroe hopes to “rebuild credibility” so that he can go back to companies and ask for money. He has also promised a transparent process which will reveal key numbers, such as how much the franchise’s licensing fees were sold for and whether due process was followed in awarding the licences. He also believes if CSA can clean house, they can also clean up their image.

What will happen to the player contracts and coaching deals that have been signed?

While Moroe said “no contract with a player, coach or supplier” has been cancelled, this is not simply a case of putting deals on hold for a year. SACA will seek compensation for the players who were contracted to the league. They expect the bill to be significant.

“A year is a long time in cricket and anything can happen in terms of player availability or circumstances,” Tony Irish, SACA CEO said. SACA was also not consulted about the postponement of the league and hopes to engage with CSA in more detail in future.

A newly formed coaches’ association will act on behalf of the coaches.

Will there be any cricket in South Africa in November and December?

CSA currently has no domestic or international matches scheduled from the end of Bangladesh’s tour on October 29 until at least Boxing Day when Zimbabwe are due to play a four-day, pink-ball game, which could get Test status subject to ICC approval. The board has tasked Corrie van Zyl, the general manager of cricket, with coming up with a contingency plan.

One option is to move up the franchise T20 competition; the tournament is unsponsored at present and was due to be played between March 14 and April 15 next year. Another is to play the franchise one-day cup, scheduled for December 20 to January 31 in this time.

If CSA seeks an international opponent, there are slim pickings. The only teams who are available are Pakistan, West Indies, who finish a two-Test tour of Zimbabwe in early November, or Zimbabwe themselves. Moroe confirmed that CSA do not want to “put content in and waste money” and, because all three teams cost more than they make for the board, it may not be viable to invite any of them.

Is South Africa at risk of losing players?

Perhaps. One of the key aims of this GLT20 was to provide a lucrative option for local players and dissuade them from seeking county cricket or other T20 tournaments to make more money.

With the tournament now a non-starter, CSA is powerless to keep players in the country. Already, there is talk that franchises in the Bangladesh Premier League are after some of the biggest names in South African cricket, such as AB de Villiers, Faf du Plessis and JP Duminy. Meanwhile, Morne Morkel and Heino Kuhn have been linked with Kolpak moves. Moroe said CSA will have to have discussions around player retention. “We have to treat all players equally so this matter is not just about AB or Faf or the so-called big players. We have to treat all players equally and doing so means sitting down with SACA,” he said.

What about the stadium upgrades?

CSA committed Rand 350 million over three years to do work in all the stadiums around the country. This included new lights in Port Elizabeth and Bloemfontein and refurbishments to changerooms and media centres, and the upgrade will continue.

“That doesn’t stop. Our stadia need to be upgraded. The league was a catalyst in terms of fast-tracking it because we needed it all to happen this year. But it was already in the pipeline,” Moroe said.

Will the GLT20 ever happen?

Yes, according to CSA. “The league is still coming, it’s not cancelled,” Moroe said.

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