Proteas

The 'shell-shocking' new economic truths for SA cricket

2020-05-21 16:11
Jacques Faul (Gallo Images)

Even though the cracks appeared before the Covid-19 pandemic struck, Cricket South Africa (CSA) still candidly admits it's been "shell-shocked" by how intensely the virus has exposed the sport's business model.

It's no secret that cricket has derived the majority of its income from selling broadcasting rights to various international markets for years now, a situation that has become increasingly acute due to the continued unreliability of match-day revenue.

Similar to rugby and soccer, local cricket has been plagued by low attendance figures at stadiums, with the exception of certain international matches.

Throw in the inherent uncertainty arising from general economic cycles as well as the absence now of live events and one's left with money taps running dry.

Compounding matters is the fact that CSA has been dealing with severe financial challenges for some time now, frantically implementing dramatic cost-cutting measures after revealing to Parliament last year that it was projecting a R654 million loss over the next four years.

"We're all a bit shell-shocked at what happened to us," Jacques Faul, the federation's acting chief, told a media briefing.

"You sit down and look at things and realise I can lose the bulk of my income. I think the model was under threat even before Covid-19. We saw the broadcasting bubble burst a bit, everyone got a bit less than they bargained on, particularly in terms of net present value (cash flows at different times). It's definitely highlighted how vulnerable we are when we don't have live content to offer. That's something that needs to be addressed."

One of the more controversial austerity measures previously proposed by CSA was the restructuring of domestic cricket, which led to a nasty stand-off between the governing body and the South African Cricketers' Association (Saca), who launched legal action.

The trade union, sidelined in most of the consultative process, had argued that 70 members would lose their livelihoods. 

Following the suspension of Thabang Moroe as CEO, that fence has started to be mended again and even though Saca claimed the moral victory, it certainly isn't in denial that the economic landscape has been severely charred.

"If you look at sport all around the world, there's a realisation that funding models are going to change," said Andrew Breetzke, Saca chief.

"It's not unique to cricket. What we've said to members as early as last week is what we do know post Covid-19 is that the landscape is going to be different. Cricket in South Africa could very well be smaller and the way it's financed different.

"I'm reluctant to say it's going to be a good or a bad thing. All we know is things will be different. That said, we've actually known this before the pandemic. There's only so much money available in the international broadcast market."

Despite CSA's board last weekend approving the establishment a support fund - "this will provide support to people within the cricket industry but also the most vulnerable South Africans out there" - cutbacks remain the name of the game.

Grants to affiliates have been cut by 14%, while stadium allocations have been decreased by a sizeable 33%.

Yet amid the difficulties lies opportunity too.

"As technology develops, there could be a way of creating your own content and reaching consumers in a different way," said Faul.

"That's the logic of it at least. Funnily enough, our actions still relate to how we get content on a television or screen so that we're still playing for that money. We've still been good with our broadcast deals. We have a short-form agreement with Star Sports, but there's one outstanding one which covers the UK territory. It's probably not a good time to do it now.

"We were fortunate that we concluded the deal for the Indian territory before the Covid-19 crisis hit us."

- Compiled by Heinz Schenk

 

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