Cricket in SA at a precipice
The debacle over CSA’s T20 efforts has cost the organisation nearly R300m
A casual fan surveying the local cricket landscape could be forgiven for thinking that the crops are healthy and the rivers full. Pakistan were steamrollered 3-0 by the Proteas in the Test series, with the ODIs and T20s running similarly in SA’s favour, though by closer margins.
Sri Lanka, currently touring the country, are giving the Proteas a closer run, but there is still the sense that the visitors are outgunned. So, overall, all seems dandy with Faf du Plessis’ men ahead of their big trip to the World Cup in England this year.
There is a good working relationship between Du Plessis and Ottis Gibson, the Barbados-born national coach, who has brought greater technical savvy to the Proteas’ bowling (though some argue about the consistency of SA’s top-order batting).
A number of players, including Rassie van der Dussen, Andile Phehlukwayo and Duanne Olivier, have made giant strides through the summer, with Van der Dussen likely to have cemented a late place for himself in the World Cup squad.
On the surface, our cricketers are content. As they should be: the player wage bill for the recently completed Mzansi Super League (MSL), SA’s inaugural international T20 cricket league, was a staggering R48m. This includes fees for the plundering international privateers who were hardly ever here, like the England pair of Jason Roy and Eoin Morgan, but most of this money will go to locals. (And it excluded prize money and bonuses for the winners, the Jozi Stars.)
Cricket SA (CSA) has learnt to its cost that it is foolhardy to go head-to-head with the players, who are unionised through the SA Cricketers Association, so exorbitant salaries for the MSL simply had to be paid.
Adding to CSA’s financial headache was the fact that last year it got into a kerfuffle with SuperSport, which offered R50m for the MSL broadcast rights, within the context of both parties being involved in a joint venture to co-run the tournament.
But no sooner had the ink dried on the "equity partnership" contract than the temperature between CSA and SuperSport plunged. The freeze was profound — resulting in a bad case of cold feet.
CSA and SuperSport parted ways, amid a cloud of "he said, she said" accusations. It was especially tricky because, besides the MSL, SuperSport has a relationship with CSA worth R350m until 2021.
In essence, CSA accused SuperSport of scuppering the broadcast rights deal for the MSL’s ill-fated predecessor, the Global T20, which collapsed. In reply, SuperSport alleges commercial incompetence and lack of administrative experience within CSA’s swanky new headquarters in Joburg.
Clearly not all is happy at CSA. Just before Christmas, Louis von Zeuner, the former Absa deputy CEO who was also an independent director at CSA, resigned. Von Zeuner’s departure was far more significant than many realised. As one SuperSport insider put it: "I’ve never seen this lightweight a CSA board. Operationally, people are frequently out of their depth."
This was the context in which, last October, CSA thumbed its nose at SuperSport and took the broadcast rights for the MSL to the SABC instead, trumpeting this as a victory for the ordinary fan. "This is a watershed moment," said CSA’s Thabang Moroe at the time.
But neutral observers found the move curious. At least, they would have figured, it’s a threat to SuperSport’s hegemony: "Let’s see where it goes."
Financially speaking, the decision for the SABC to broadcast the MSL went nowhere, plummeting head-first into the ground. This is because the SABC is bankrupt — as it was before the deal was signed.
Originally, CSA and the SABC talked of a "revenue share model" in which CSA would earn a percentage of the advertising revenue SABC got from the tournament, instead of the SABC paying broadcast rights. But this never transpired.
It means that, in naked terms, CSA, in a fit of "teach-them-a-lesson" pique, turned its back on SuperSport’s R50m offer for — what, exactly? — absolutely nothing.
Estimates suggest the 2018 MSL cost CSA between R100m and R125m. Combine this with the money lost on the postponed T20 Global in 2017 (coyly referenced by CSA in its 2018 annual report as "expenditures of R192m"), and that puts CSA’s losses for the T20 league at nearly R300m over the past two years.
This might be acceptable if the MSL were worthy of investment, and likely to turn a profit later. But this is debatable: few of CSA’s other domestic products have sponsors, so why should the MSL?
As it is, CSA is known to be courting the National Treasury to recoup some of its MSL expenditure, arguing that it did the nation a favour by using a free-to-air platform.
It’s an argument not without merit: viewing figures on the SABC for the tournament are 10 times what they would have been on SuperSport and this is good for development and the growth of the game.
But the Treasury, already battling to find cash for the SABC itself, as well as Eskom and SAA, is unlikely to want to set the precedent of paying a sports federation for its brain fade of selling its inventory for free.
So, back to the cricket. The domestic four-day competition, which used to be called the Sunfoil Series, is without a sponsor. The domestic T20 tournament, which used to be called the Ram/Slam, will be played in April without a sponsor.
"The local sports sponsorship market isn’t in bad shape, but the broadcast rights market is spooked," says respected local researcher Dave Sidenberg of BMI Sports Info. "There is imminent legislation and nobody seems to know where they stand. It’s an uncertain time for everybody."
Sidenberg is referring to Icasa’s new draft regulations, which are largely antagonistic to SuperSport. (There are public hearings in April, so the regulations could change.)
Those draft regulations seek to make more rights available to more broadcasters — forgetting that a dilution of exclusivity drives down the broadcast rights price which, in turn, affects a federation’s finances.
This is bad news for SA sport which, unlike many other countries, gets little revenue from ticket sales, merchandising and sponsorship. The major share of the money in SA sport comes from federations selling broadcast rights.
Of course, given that Icasa is toothless, the concern around it nipping at SuperSport may be groundless. But either way, the global market for rights is stagnant, says Sidenberg, which means prices are going down — not up.
This is worrying for CSA. Speaking before parliament last year, Moroe estimated CSA’s losses at R654m over the next four years — and that excluded losses from the MSL, as it struggles to find its feet in seasons two, three and four.
"If it carries on like this cricket is going to be bankrupt in the next three to four years," says one of the more experienced administrators.
"England are coming next summer, so that’s a big payday, but after that, the tours are small. We allowed our pride to take over with the MSL — we needed to prove to the world that we could do it, but is it a good business decision? At the moment the jury is out."
So why should all of this matter if the Proteas continue to do well? Why should the fan in the watermelon hat, who loves watching "KG" Rabada bowl, care?
The answer is simple. The relationship between the administrators and the players at the moment could be scored as 2 out of 10. There is no trust. In a World Cup year, where every chance should be seized to give the Proteas every chance of success, the suits and the players are singing two different national anthems. We’ve been here before. And it could prove costly.