India's tour of Australia in jeopardy if Seven terminates $450m cricket deal [Post#38]

[naseem]

There is something known as savings and investments. No excuse to have zero amounts of cash. The PCB in contrast has been without any international cricket at home in the last 10 years but does not find itself in a desperately dire situation where they are hoping for a bail out from someone.

I thought CA is a wealthy board

 

[Convict]

How does a Cricket Board which resides in a first world country, which has enjoyed millions and billions of dollars for the last 20-30 years find itself in such a desperate situation? Serious questions should have been asked from the current and prior Cricket Australia's CEO's.

Simple.

Australian sporting organisations (cricket, AFL, rugby, soccer etc) are not for profit organisations.
This is a legal status with the Australian government in regard to tax.

Part of the requirements of being an Not For Profit Organisation is that the revenue you earn is to go back into services (naturally there are allowances for making investments to provide future revenue streams, rain day provisions etc) so as revenue increases, expenses will naturally increase as well. Additionly there is inventive to not have too much in savings, as it is harder to get government to agree to pay for new stadiums etc when they know you are sitting on a $100 million war chest.

 

[MenInG]

Simple.

Australian sporting organisations (cricket, AFL, rugby, soccer etc) are not for profit organisations.
This is a legal status with the Australian government in regard to tax.

Part of the requirements of being an Not For Profit Organisation is that the revenue you earn is to go back into services (naturally there are allowances for making investments to provide future revenue streams, rain day provisions etc) so as revenue increases, expenses will naturally increase as well. Additionly there is inventive to not have too much in savings, as it is harder to get government to agree to pay for new stadiums etc when they know you are sitting on a $100 million war chest.

Then that needs to change.

You cannot have any organization sitting around with no idea of potential liquidity risks lie around the corner.

 

[Convict]

Then that needs to change.

You cannot have any organization sitting around with no idea of potential liquidity risks lye around the corner.

It works well in the 99% of cases where your revenue doesn't collapse by 90% in one year.

Bare in mind, that the Channel 7 legal case is extremely weak and they ended up making the first scheduled payment in full and on time.

Unlike lets say the AFL or NRL which had to reduce the number of matches in their season, Cricket Australia has a schedule with all the contracted matches that Channel 7 has paid for.

Cricket Australia can afford to call Channel 7's bluff.

 

[naseem]

Simple.

Australian sporting organisations (cricket, AFL, rugby, soccer etc) are not for profit organisations.
This is a legal status with the Australian government in regard to tax.

Part of the requirements of being an Not For Profit Organisation is that the revenue you earn is to go back into services (naturally there are allowances for making investments to provide future revenue streams, rain day provisions etc) so as revenue increases, expenses will naturally increase as well. Additionly there is inventive to not have too much in savings, as it is harder to get government to agree to pay for new stadiums etc when they know you are sitting on a $100 million war chest.

Sounds good on morality grounds but not too practical....I mean u need to prepare for such crisis....or make provision.....

 

[Convict]

Sounds good on morality grounds but not too practical....I mean u need to prepare for such crisis....or make provision.....

Cricket Australia's financial troubles are greatly exaggerated. Bare in mind that all of the state associations and the players association were extremely dubious of Kevin Roberts' claim of financial peril. The end result of that is that Kevin Roberts was removed as CEO.

If Channel 7 even had a case (as they did with the AFL) they would have negotiated a discounted deal already.
Channel 7 is just trying to call CA's bluff to get a discount because Channel 7's revenue is a mess, partly because they were banking on all the Olympics advertising revenue this year which never eventuated.

 

[Convict]

It also has nothing to do with morality or what not.

Cricket Australia could choose to stop being a not for profit organisation. That's not a problem.
All they have to do is give the government 30% of their income every year.