Money games

There was a striking comment in an introductory blog on the ECB's website from new chairman, Ian Watmore, last month. Despite locked-in losses of more than GBP 100million, he wrote that the "financial day of reckoning" from coronavirus was still to come. It is a hugely troubling thought.

After all, Covid-19 has already had a profound effect on the world game. Players have had to take wage cuts, a number of national boards are making staff redundant and looking to cut costs in other ways, bilateral series and World Cups have been cancelled or postponed. Yet, as Watmore points out, it is obvious that the longer-term financial consequences of Covid-19 are still to be fully understood.

What is also clear, however, is that the pandemic has brought the game's inequitable financial model into even sharper focus. It is a model that has, in a number of respects, hugely favoured the 'big three' boards of India, England and Australia since 2015, creating an environment where the rest of the ICC's members are significantly disadvantaged and where competitive balance, the very essence of successful sporting engagement, is an afterthought.

These are not new concerns, of course. But the medium to long-term effects of this pandemic look set to disproportionately affect the so-called smaller nations, exacerbating the inherent inequalities at play. While the England and Wales Cricket Board are set to lose money, for example, their very existence is not threatened and the ability of England to play Test cricket is not in doubt. The same cannot be said for some of the other Full Members.

Consequently, Covid-19 may have brought cricket's own day of reckoning much sooner than anyone expected. The good news is that there are potential solutions to reduce the inequalities in the world game. It has never been more important that they are executed.

There are a number of major elements to the current financial model: the ICC distributions, broadcast revenues, and hosting ICC events such as the World Cup or T20 World Cup. Then there are also the issues of the prohibitive costs of hosting international cricket for some members and the lopsided schedule which allows the big three to play more and more of the most lucrative series against each other. The whole model is skewed in favour of the Board of Control for Cricket in India, the ECB and Cricket Australia.

"The bigger Full Members would claim that, 'Well we're the ones that generate most of it, therefore we're the ones that should keep the larger slice of the pie,'" Warren Deutrom, chief executive of Cricket Ireland, tells Cricbuzz. "That is one definition of fairness. The other definition of fairness is a greater equity of distribution based on ensuring that the whole sport is going to be stronger and more competitive. That's what I would regard as fair."

From the latest ICC distribution model - agreed until 2023 - the BCCI will receive USD 403 million during the period and the ECB USD 139 million. The rest of the Full Members, except Zimbabwe, Ireland and Afghanistan, will receive USD 128 million each. Zimbabwe will get USD 94 million throughout this cycle while Ireland and Afghanistan, the newest Full Members, are set to receive less than half of Zimbabwe's share. "I believe that is an area that is wrong," Deutrom says. The Associate Members have to split just USD 240 million between 92 countries.

A change to the model is clearly required to, as a minimum, significantly increase the share of revenue to Ireland and Afghanistan and the Associates in order to grow the game beyond the Full Members. Other, more radical, options are available.

"In my view, the ICC should have a model that is opposite to what the big three are attempting," says Haroon Lorgat, the former chief executive of the ICC who has a track record of attempting to check the power of the bigger members. "That is to give more to the nations that cannot generate the kind of monies needed to fund the growth and competitiveness of their game.

"A million dollars extra to India is meaningless but a million dollars to Sri Lanka or West Indies or South Africa is worth a fortune."

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Whether the BCCI, ECB and CA would ever accept that proposal is up for debate. They could argue that the ICC's distribution model is not hugely inequitable. After all, CA receive the same amount as Sri Lanka Cricket or the Pakistan Cricket Board and the ECB only get a few million more.

The disparity begins to really grow, however, when you factor in the revenues generated by the hosting of ICC events and from broadcast deals. Between 2013 and 2023, eight of the nine major men's ICC events have been or will be held in either India, England or Australia. These are lucrative competitions. The host countries receive staging fees from the ICC and retain all ticketing and hospitality revenue while the ICC covers all the costs.

For last summer's World Cup, for example, the ECB received a USD 750,000 staging fee for each of the 48 matches, totalling in the region of USD 36 million. They also grossed more than USD 50 million in ticket sales and made a tidy sum in hospitality too. In all, it is estimated the ECB made more than USD 100 million from hosting that one tournament - almost as much as what Pakistan, West Indies or South Africa receive from the ICC over an eight-year period. "The current financial model harms the interest of almost all the 104 ICC Members," Pakistan Cricket Board president Ehsan Mani lamented to Cricbuzz last month.

There are other ICC events of course, including the Women's and Under-19 World Cups, and these are shared out amongst the other member countries. Yet these are far less lucrative. Cricket West Indies received USD 3 million in total from the ICC for hosting both tournaments in recent years. The ECB made that amount from hosting four World Cup games last summer. The ticketing and hospitality revenues are significantly lower for those other competitions, too.

There are a couple of options for change here. These tournaments should be spread more evenly around the Full Member countries so they have the opportunity to benefit from the additional revenue as well as the greater exposure that welcoming the best players from around the world brings. There are already welcome signs that the men's events might be spread out after 2023, with the USA and West Indies understood to be in the running to co-host the 2026 T20 World Cup. A second option is to keep the events in the big three countries but redistribute a significant portion of the ticket and hospitality revenues to each participating nation so that the host country is not the only board to benefit.

Another area where the current revenue model favours the wealthy members is in the broadcast deals. The ECB's current deal is worth USD 1.4 billion over five years. The BCCI are set to earn nearly USD 4 billion from their international, IPL and domestic deals. By contrast, Cricket West Indies' broadcast deal is worth around USD 19.5 million per year. As these figures show, it is the broadcast revenues which have really driven the financial disparity between the big three and the rest.

In addition, all the revenues for international series, broadcast and otherwise, are retained by the home boards. Pakistan, West Indies, Ireland and Australia all made great sacrifices to come to England this summer, more or less saving the ECB from a financial meltdown. Yet they received no revenue from the series that they played, signing up in return for a vague promise that England might make a reciprocal tour. The irony of West Indian players accepting a Covid-enforced 50% pay cut while saving England's season should not be lost on anyone.

On the face of it, there is not much that can be done by the ICC in respect of the TV revenues. After all, broadcast deals are negotiated individually by the respective boards. But CWI chief executive Johnny Grave has previously tabled two potential solutions to the ICC's members in 2018. "Firstly, we just called for a very simple model which was for 20% of the broadcast rights to be given to the away board," he says. "It should at least cover the costs of air travel and player match fees so whilst you might not make money from an away tour, you certainly don't lose any." This did not go anywhere two years ago but could be re-visited again.

The second solution is collectively selling overseas broadcast rights - those to TV companies in countries outside the home board's market. Broadcasters who were interested in showing an England-India series in any territory outside of the United Kingdom would need to bid for an entire package of bilateral cricket, which would include series such as Zimbabwe v Sri Lanka. Aside from the BCCI, who rely little on overseas rights, these typically make up 35-70% of other Full Member revenues. Currently, there is little rhyme or reason for the value of these rights. It is not simply down to how many people watch. Grave believes that bundling those rights and selling them as a package - rather than each board selling them individually - would obtain a better return and be more efficient, generating more revenue all round. "Obviously that's quite complicated because it means you've got to coordinate everyone," Grave admits. Nevertheless, he believes it can be done.

For any of these options to be implemented, the Full Members would need to agree, either independently or at the ICC. Cricbuzz asked the ECB whether they believed they have a role to play in supporting the so-called smaller nations navigate the effects of Covid-19, what practical support they would offer, and whether they accepted the need to review the ICC's current funding model.

"We are incredibly grateful to Pakistan, West Indies, Ireland and Australia for travelling here during this summer so that international cricket could resume. It has shown the cricketing community at its best and it's important that we continue to work together as we face the ongoing challenges caused by the Covid-19 pandemic," said an ECB spokesman, without offering any genuine answers.

There is a clear correlation between lower revenues and the difficult decisions boards have to make about their costs. After all, the less money you have, the less you can spend. Even before Covid-19, Cricket Ireland had to cancel some of the international cricket they were due to host this summer because the costs associated with the series were prohibitive. This is a regular issue for the likes of Zimbabwe and Afghanistan as well, and the knock-on effects are obvious. Less cricket means less exposure, less development and less revenue generating opportunities.

Hosting cricket has not been an issue for Australia, England and India. They have played each other with increasing regularity over the past five years while other countries have been shunned. The reason? Playing each other is more lucrative.

Bangladesh have not visited England for a Test series since 2010, for instance, while Australia have visited England in each of the last three summers for tours in one format or another. India were in the UK for a Test series in 2018 and are due back next summer too, while England are due to play Virat Kohli's team in five Tests this winter.

Naturally, that has meant less space for the other countries to host lucrative matches, yet again putting them at a financial disadvantage. It is hoped that the World Test Championship and ODI Super League will improve the situation, forcing the big three to play more series against other countries, although the current structure does not mandate series against every other team in either the WTC or Super League.

"At the moment the situation where bigger countries play more against themselves than others in an asymmetrical, competitor-driven global schedule, exacerbates the imbalance in the way money is distributed around the world," Tom Moffat, the chief executive of FICA, tells Cricbuzz. "More equitable scheduling can also help revenue generating opportunities for the smaller countries if bigger countries played them more.

"For players from those smaller cricket countries, and almost all countries from a women's player perspective, the frustration is palpable because a lot of them have demonstrated they can compete with and beat the best in the world, yet they can't get regular fixtures. The economics of the game and financial models are one thing, but the schedule is a critical piece of the same puzzle."

When asked by Cricbuzz whether the ECB were committed to ensuring an even distribution of fixtures in any Covid-enforced revamp of the Future Tours Programme, the spokesperson said only that they would "continue to liaise" with other members to "devise a schedule in a congested calendar that is acceptable to all participants." The push for change, in other words, will need to come from elsewhere.

While Moffat rightly points out that better administration among some boards is just as important as more money, it does not excuse an unjust model that is ultimately undermining the quality of cricket available to those who want to watch it. If nothing is done, the growing gulf in the finances of Full Members will impact the competitive balance of international cricket. That is already being seen to some extent in the women's game where Australia, who have had the best funded and resourced structure for a number of years now, are dominating global events.

"One of the most important considerations in the game is to try and maintain a balance of competitiveness between the top nations as much as possible," Deutrom says. "I've always been a big fan of the American NFL model, where the team that comes bottom of the conference gets first pick in the draft of the following year. Why? Simply to maintain a competitive balance between all the teams to make sure that the competition is going to be as fair and robust and as competitive as possible."

Attempting to ensure competitive balance was the main reason La Liga, Spain's top flight football division, moved to collective bargaining for their broadcast deals in 2015. Previously the clubs negotiated their own deals but the revenue generated by Barcelona and Real Madrid was vastly more than the other clubs were able to achieve, exacerbating the differences between the clubs on the pitch. Collective bargaining has been in place since the 2016/17 season, and has yielded greater revenues than the clubs were previously able to achieve on their own. While Real and Barcelona have still won every edition of the league since the change of approach, the competitive balance of the league has improved.

If competitive balance is not created and maintained in cricket, the risk is that the effects will snowball. Some, like Lorgat, believe broadcast rights for those countries outside the big three will fall because less people will want to watch them get trounced by India or England. As a result, those nations will then have to cut costs, affecting their development systems and domestic competitions, and probably also play less international cricket while India, England and Australia play each other more and more, exacerbating the financial differences even further.

That is not some fanciful scenario. It is already happening. And if the current disparity continues to grow then some countries, whether in five years' time or ten, will have to stop playing Test cricket altogether. That won't be because they don't have the will. It simply won't be viable for them to do so. "That is clearly a risk because without funding and without resourcing you can't sustain or grow the game," Lorgat says. In that case, the big three would be directly responsible for killing Test cricket.

The challenges facing the new ICC chairperson are clear, then. The ICC have finally confirmed that the role will be filled by the end of the year after months of delays following the end of Shashank Manohar's tenure. Mani believes the new chairperson should not be someone from a big three country. He feels that only someone from outside that circle can implement the required changes. It is hard to argue with his logic.

Whoever ends up being appointed, the ICC and the Full Members, including the big three, have the ability to create a fairer model, a more equitable model, a model that grows the game. The potential solutions are there. "So isn't it just a question of the will of the individuals on that table?" Lorgat says. "Do you really want to grow the game and sustain it in all parts of the world? This is an existential issue. It's whether the member countries want to stand together.

"And if COVID doesn't make you want to stand together, nothing will."