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Cricket Australia reveals the Big Bash has lost $33 million over its first five years

Abdul

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CRICKET Australia has revealed the runaway success of the Big Bash has lost $33 million over its first five years and hasn’t been the cash cow many believe.

The expected revenue to be pulled in by the next TV deal for the exploding Twenty20 tournament, which could jump from $20 million a year currently to as much as $60 million a season, is a key driver in predictions of upwards of $2 billion in revenue for CA over the next five years.

Both CA and the Australian Cricketers Association are fighting over the best way to divide the big influx of cash between the players, grassroots cricket, investment for growth and administrative spend in the next Memorandum of Understanding.

In seeking to clarify just why CA wants to move away from the 20-year-old revenue share model, Kevin Roberts, the head of its negotiating team and a former state player, laid bare the massive investment so far made in the BBL.

While CA declared it wanted to increase payments to BBL players, the majority of which are domestic players, by 42 per cent over the course of the next five years the huge loss was revealed.

It’s a loss that only compounds CA’s refusal to overfund other payments to domestic players, for Sheffield Shield and domestic one day games, which will rise by just 18 per cent over the next five years under its new pay plan.

And an internal CA briefing note, seen by the Herald Sun, said the fact a revenue share was locked in also made it hard to control massive jumps in salaries for players, which had gone up by as much as 63 per cent for international male players over the past five years.

“The guaranteed percentage does not allow CA any flexibility to control the rate of growth according to the changing needs and priorities of the game,” the note says.

But while Roberts and CA once again put the case for reform forward, using Twitter to try and inform the public, a call to the ACA once again refused to happen.

The last communication between the warring parties was last Friday, when CA chairman David Peever again refused calls for meditation.

“Our phones have been on but we’ve not heard from anyone,” an ACA spokesman said.

“It’s only four weeks until this has to be sorted out, we can’t understand their refusal to even sit down and negotiate,

“No one wants to be in this position, but time is running out.”

Both ACA chief executive and CA boss James Sutherland are in England for various meetings around the Champions Trophy, which begins on Friday.

The current MOU expires on June 30, after which all national and most domestic players will be out of contract unless a new deal is signed.

http://www.dailytelegraph.com.au/sp...s/news-story/04e15a632db26d7e8a39deee31020384
 
Wow not sure how that's even possible. Costs of $26+ mil/yr?
 
It’s a loss that only compounds CA’s refusal to overfund other payments to domestic players, for Sheffield Shield and domestic one day games, which will rise by just 18 per cent over the next five years under its new pay plan.

Tough times ahead,maybe its time to rethink the model.
 
As I keep explaining, in Australia Test cricket subsidises the other formats.

Every Test has 600 commercial breaks.

And the Perth Test and Adelaide and Brisbane Day/Night Tests take place during prime time viewing. While the MCG and Sydney Tests take place when kids and adults are on holiday.
 
Unsure why arent the Big Bash teams owned by Kerry Packer type franchise owners?
 
Unsure why arent the Big Bash teams owned by Kerry Packer type franchise owners?

I think they want complete control over the teams.

Would a privately owned franchise be okay with their best players being made unavailable because CA wants it so?
 
Unsure why arent the Big Bash teams owned by Kerry Packer type franchise owners?
Because there are no profits on offer.

The grounds only fill when the tickets are sold at far beyond cost price.
 
CA should ideally sell the teams to private owners, that seems to be the best model in every sports league. At the same time according to the news they are going to be renegotiating their broadcast deals which should bring them profits.
 
I know [MENTION=132916]Junaids[/MENTION] wants to paint a rosy picture, and that all is fine. But the news is being less than well recieved down under.

Setting up new sports teams is a difficult enterprise. There are massive upfront costs now. No scope or time for teams to grow organically over time anymore.

The only way it is feasible is through heavy commercialisation. Big Bash may have to learn from IPL and try and push the 'brand' across more.

THE Australian Cricketers Association has called for an independent investigation after the Herald Sun reported the Big Bash had made a $33 million loss over the first five years of competition.

Despite being a runaway hit, the Twenty20 competition needed massive upfront investment from Cricket Australia and suffered from underselling its initial TV deal as the BBL tried to make its mark on the Australian summer.
The massive loss was a result of CA spending $187 million to put on the BBL over the first five seasons, yet returns were just $154 million.

A potential tripling of the current $20 million a year TV deal, with broadcast rights up for grabs after this season and highly sought after, could help recoup some of those losses.

But the ACA, which has made capping CA expenditure on management costs an element of its proposal for a new Memorandum of Understanding, wants the BBL loss investigated.

“This is either an MOU negotiating tactic or a serious case of mismanagement,” former Test opener and ACA player liaison manager Simon Katich said. “Either way, the public and the players need answers.

“The claims that CA has managed to lose money on the biggest success story in world cricket must be independently investigated.

“Record crowds, record ratings, record sponsorships and merchandising sales each and every year, yet CA are claiming a loss. “It defies logic and good business sense.”

The ACA has received independent financial predictions which suggest CA could reap more than $2.5 billion in revenue over the next five years.
The union and CA are in a pitched battle over the best way to spend that money on players, grassroots, game investment and management costs.
Katich questioned whether an overspend on management was at play in the BBL loss.

“Is it drained by too much bureaucracy, executive salaries, entitlements and bonuses,” he said.

“One thing is for sure, it’s not drained by either the players or grassroots investments, which together account for less than 30 cents in the dollar.

“I have called for a cap on CA administrative costs before and this is more evidence of the need for that.

“And it is also now clear evidence of the need for an independent investigation.”

http://www.news.com.au/sport/cricket/australian-cricketers-associations-simon-katich-says-33m-big-bash-loss-defies-logic-and-good-business-sense/news-story/02723b87cc01c77210328e093ebc765d
 
Its inherently wrong to compare IPL and Big Bash from a financial perspective.

There aren't any independent, profit-motivated franchise owners
 
Unsure why arent the Big Bash teams owned by Kerry Packer type franchise owners?

I know [MENTION=132916]Junaids[/MENTION] wants to paint a rosy picture, and that all is fine. But the news is being less than well recieved down under.

Setting up new sports teams is a difficult enterprise. There are massive upfront costs now. No scope or time for teams to grow organically over time anymore.

The only way it is feasible is through heavy commercialisation. Big Bash may have to learn from IPL and try and push the 'brand' across more.



http://www.news.com.au/sport/cricket/australian-cricketers-associations-simon-katich-says-33m-big-bash-loss-defies-logic-and-good-business-sense/news-story/02723b87cc01c77210328e093ebc765d

It's not the job of BBL to make a profit.

It's there as a dumbed-down gateway drug to get kids into cricket.

They can then graduate to the longer forms of cricket which actually make money.
 
What is the surprise?

They set up 8 teams from complete scratch, paid pretty significant wages + stadium operating costs and then had cheap tickets to get people to come as well as picking a really cheap free to air deal to get it on free to air television.

Channel 10 got a great deal for the Big Bash rights because when they bought it it was assumed the audience would be much smaller than it actually is.
 
What is the surprise?

They set up 8 teams from complete scratch, paid pretty significant wages + stadium operating costs and then had cheap tickets to get people to come as well as picking a really cheap free to air deal to get it on free to air television.

Channel 10 got a great deal for the Big Bash rights because when they bought it it was assumed the audience would be much smaller than it actually is.

This.

The only reason this news is coming now is because CA want to try and paint players as greedy in the pay dispute showing how BBL isn't making much money but players are being payed handsomely and so on, it is a huge competition with big costs, there is a thing called break even folks, it takes time to recoup money and make profits, even many ipl franchises haven't started posting profits yet.
 
PSL is in loss, BBL is in loss.

Weren't these leagues supposed to lure talent away from IPL and beat the BCCI.
 
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Very well said Mr Katich.. Time to delve into the books and see the money trail. <a href="https://t.co/7nEq0AqoxY">https://t.co/7nEq0AqoxY</a></p>— Damien Martyn (@damienmartyn) <a href="https://twitter.com/damienmartyn/status/869757057309605888">May 31, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
 
PSL is in loss, BBL is in loss.

Weren't these leagues supposed to lure talent away from IPL and beat the BCCI.

Nobody in Australia has ever claimed that about the BBL.

The aim of the BBL was always at building up the cricket fanbase in Australia away from the traditional male Anglo-Celt (plus immigrants from cricket playing countries) base.
 
This.

The only reason this news is coming now is because CA want to try and paint players as greedy in the pay dispute showing how BBL isn't making much money but players are being payed handsomely and so on, it is a huge competition with big costs, there is a thing called break even folks, it takes time to recoup money and make profits, even many ipl franchises haven't started posting profits yet.

The main holdout here is that the initial television rights deal they signed with Channel 10 was based on estimated ratings which drastically underestimated what the ratings actually where (eg they expected tv ratings of like a quarter of what they actually are.).

The next lot of tv rights will reflect that and cover that 33 million on its own.
 
I must say though, for a country like Australia which has a solid revenue base in its domestic cricket, plenty of sponsors for domestic cricket, plenty of commercial interest in Test, ODI and T-20 Cricket, where the players are paid very handsomely. No shortage of international teams wanting to come to Australia. For them to suffer serious losses in BBL

And in comparison, the PCB, terrorism and law and order problems in Pakistan, a limited economy with recession, no international teams coming to Pakistan, took a huge gamble on the PSL where they pretty much risked all the initial funds given by the Franchise owner for the first 2 seasons but still they have been able to make profits in the first two seasons albeit low profits. But the biggest plus point is, not a single foreign player has complained off high handedness from the PCB, for wages not being paid in time, lack of professionalism from the PCB.

Cricket Australia should seriously hang their heads in shame.
 
Nobody in Australia has ever claimed that about the BBL.

The aim of the BBL was always at building up the cricket fanbase in Australia away from the traditional male Anglo-Celt (plus immigrants from cricket playing countries) base.

So has the BBL succeeded in attracting fans from non-traditional communities? the Croats, Poles, Greeks , Vietnamese/ Chinese, Czechs ?
 
Australian Cricketers’ Association’s Simon Katich says $33m Big Bash loss ‘defies logic’

“This is either an MOU negotiating tactic or a serious case of mismanagement,” former Test opener and ACA player liaison manager Simon Katich said.

“Either way, the public and the players need answers.

“The claims that CA has managed to lose money on the biggest success story in world cricket must be independently investigated.

“Record crowds, record ratings, record sponsorships and merchandising sales each and every year, yet CA are claiming a loss.

“It defies logic and good business sense.”

The ACA has received independent financial predictions which suggest CA could reap more than $2.5 billion in revenue over the next five years.


Definitely with Katich on this one.

Reported expenditures of $187mil during those 5 years equates to on average $1mil+ per game over roughly 40 days. Or in terms of profitability on average a loss of around $200k a game? You have got to be kidding me!

Those numbers just don’t stack up something ain’t right.
 
So has the BBL succeeded in attracting fans from non-traditional communities? the Croats, Poles, Greeks , Vietnamese/ Chinese, Czechs ?

It is improving yeah. There are a lot of people attending Big Bash matches from not so traditional cricket demographics though of course most are still the usual lot.
 
I must say though, for a country like Australia which has a solid revenue base in its domestic cricket, plenty of sponsors for domestic cricket, plenty of commercial interest in Test, ODI and T-20 Cricket, where the players are paid very handsomely. No shortage of international teams wanting to come to Australia. For them to suffer serious losses in BBL

And in comparison, the PCB, terrorism and law and order problems in Pakistan, a limited economy with recession, no international teams coming to Pakistan, took a huge gamble on the PSL where they pretty much risked all the initial funds given by the Franchise owner for the first 2 seasons but still they have been able to make profits in the first two seasons albeit low profits. But the biggest plus point is, not a single foreign player has complained off high handedness from the PCB, for wages not being paid in time, lack of professionalism from the PCB.

Cricket Australia should seriously hang their heads in shame.

Only because you are foolish. Of course CA is taking losses because it is covering the entire cost of running the BBL while the PCB is letting private owners take that responsibility.
 
Only because you are foolish. Of course CA is taking losses because it is covering the entire cost of running the BBL while the PCB is letting private owners take that responsibility.

The PCB is practically running the entire cost of running the PSL, the Franchise owners are mainly just responsible for the cost of their franchises and the players.

But still for a first world country and a first world board like Cricket Australia, for them to turn into losses compared to the PCB which has so many obstacles, challenges on various fronts is not a good picture at all.

I would be very embarrassed to be Cricket Australia right now.
 
The PCB is practically running the entire cost of running the PSL, the Franchise owners are mainly just responsible for the cost of their franchises and the players.

But still for a first world country and a first world board like Cricket Australia, for them to turn into losses compared to the PCB which has so many obstacles, challenges on various fronts is not a good picture at all.

I would be very embarrassed to be Cricket Australia right now.

Why?

These are set up costs including the cost of running the franchises and players.

Its a deliberate investment CA made plus they have in this case significant interest in making the loss look as big as possible.
 
You don't find supposed costs of over a mil on average per BBL game hard to believe? That is off the charts.

This is 33 million over 5 years.

So 6.5 million a year.

Its really only about 200,000 per game.
 
This is 33 million over 5 years.

So 6.5 million a year.

Its really only about 200,000 per game.


Yeah that’s a loss of around $200k a game on average but I’m referring to the reported “costs” of $187mil during those 5 years. Which equates to roughly just over a mil a game. How is that even possible. Were they duped into buying channel Ten shares or something :rp
 
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