Cricket South Africa is bracing itself for a massive financial hit from the first Global League T20.
Protracted negotiations for TV rights have not helped, and the union is expecting a net loss of US $25-million (about R342.58-million) from the inaugural edition of the T20 Global League, apparently wiping out more than half its current cash reserves.
In its 2016-17 integrated report, CSA reported a bank balance of $47.8-million (R655.44 million) at the end of April, but the costs of running the tournament with reduced revenue and stadium upgrades of $25.5-million (R350-million) spread over three years, means the glamour competition, which is due to start on 3 November, will cost much more than anticipated.
While CSA had always predicted it would take at least three seasons before the T20 Global League turned a profit, much like the Big Bash League, the extent of the losses was alarming. Cricket Australia incurred similar losses over the first two years, but offset that with revenue from the Champions League T20, a luxury that CSA don’t have. With the broadcast deal and sponsorship yet to be sewn up, there could be more bad news to come for South. Africa.
Cricket South Africa’s acting CEO, Thabang Moroe, said television rights and sponsorships have been reduced from what CSA hoped for. ‘The numbers have changed. Initially, we were looking at a total net revenue of $32-million (R438.50-million) as far as broadcast and central sponsorship were concerned. At the moment it will be in its 20s.’
Moroe and his team are looking for a title sponsor and cutting costs on everything, from the opening and closing ceremony to marketing to cushion the blow. Top Proteas players and a star international player have been assigned to each of the eight franchises. A total of 57 games are to be played in 44 days.
‘As CSA, we have decided to absorb some of the losses that our members would have incurred, but we’re doing so because when we look at our numbers, we’re pretty confident that we can help them regain them in the following year,’ Moroe said. ‘We and the team owners will still suffer losses. Hopefully, depending on how well we negotiate with all the broadcasters, the team owners will break even in year three. Our model is pretty watertight, it’s now just a matter of making sure that we deliver operationally.’
CSA are also negotiating a severance package, thought to be in the region of R3-6-million) for Haroon Lorgat, their former CEO who left after his relationship with the board became untenable.
Photo: Lee Warren/Gallo Images
