Revenue Share the cornerstone of ACA ‘Win:Win’ solution

28 Apr 2017

I (338)

Grassroots and players miss out in CA proposal

The ACA on behalf of Australia’s cricketers has today rejected Cricket Australia’s pay and conditions proposal.

Since 20th March 2017, despite a lack of the necessary financial information, the ACA’s legal, financial and media experts have been analysing Cricket Australia’s (CA) remuneration proposal to Australia’s international and domestic players.

The Cricket Australia Proposal
The ACA has found that CA’s proposal is a ‘win’ for cricket administrators but a ‘loss’ for cricket.

That’s because CA’s proposal:

  • Misunderstands a fundamental truth about cricket: cricket is for the fans and the players are the gateway to the fans;
  • Would end the successful 20-year partnership with the players; a partnership that allows the players to share in the ‘ups and downs’ of the games and its revenue, and allows for the fluctuations in media rights cycles;
  • Denies female cricketers the opportunity to share in the games’ revenue thus compromising CA’s otherwise positive response to the ACA’s calls for gender equity, which have been welcomed by the ACA;
  • Disrespects the value of domestic cricketers and the role they play in Australian cricket;
  • Fails to fully disclose sufficient financial information requested by the ACA;
  • Fails to allocate with transparency or certainty the independently forecasted $2.6 billion which is expected to enter that game over the next five years;
  • Makes an artificially inflated offer to the players by including both income the players have already earned (called the Adjustment Ledger) and CA’s (and its Associations) payroll tax obligations;
  • Continues to short change desperately needed grassroots investment currently at only 12% of revenue;
  • Reduces the share of Australian Cricket Revenue (ACR) available to the players and their programs in real terms;
  • Creates large scale confusion for domestic players still on multi-year revenue-sharing contracts;
  • Creates inequity amongst the playing groups. It is unfair for CA to create a situation, via its offer, that some players playing in a domestic team enjoy revenue share and other do not;
  • Fails to bridge the trust gap with the players that was created by CA which, amongst other things, shared zero per cent of digital revenue with the players; and
  • Maintains the threat to remove the ACA’s funding and payments and hence the critical programs that the ACA provides.

These factors render CA’s offer unacceptable to male, female, international and domestic players in Australia.

The ACA also expresses frustration that what should be a relatively simple and good faith negotiation has not proceeded in this way.

The fact that CA has, despite various attempts to do so, produced no logical reason to break the successful partnership model and longstanding relationship with players, leaves the players unclear as to CA’s objectives.

That’s why the players urge Cricket Australia’s Board to fundamentally revise and restructure CA’s proposal, as a precondition to further negotiations.

An ACA ‘WIN WIN’ Solution
To assist CA, the players and the ACA offer a ‘Win Win’ model, as a solution.

A ‘win’ for the men and women who play the game, a ‘win’ for the grassroots, a ‘win’ for broadcasters and sponsors, a ‘win’ for Cricket Australia and most importantly a ‘win’ for the fans.

The players propose a modernised Revenue Sharing Model with an updated and inclusive definition of revenue.

The proposal is for a 22.5/22.5/55 split of agreed revenue share to grassroots cricket, the players and CA respectively.
An updated and inclusive definition of cricket revenue is required given the current loopholes and exclusions of revenue streams like digital revenue. Players are also prepared to increase their exposure to revenue risk given their preparedness to share any underachievement of revenue forecasts as part of a revamped revenue share model.

The ACA’s proposal is:

  • Simple, transparent and accountable;
  • Retains all the benefits of the successful partnership model;
  • Builds trust by having an inclusive definition of revenue rather than one with outdated definitions and loopholes;
  • Allocates the players and their programs a set share of these revenues that the game can afford;
  • Prioritises the investment in grassroots cricket by protecting 22.5% of these revenues for it, including the creation of an estimated $119 million per year, 5-year ‘Grassroots Seed Fund’ to secure cricket’s future;
  • Leaves an estimated $1.5 billion (or 55% of these revenues) with CA for cricket administration over and above player payments and protected grassroots investment;
  • Creates a pro-investment environment supported by the players;
  • Treats men and women fairly, with equal conditions;
  • Treats domestic players with respect and acknowledges their important role;
  • Eliminates the unnecessary risk CA is asking broadcasters and sponsors to take, by asking them to support an untested model;
  • Regards CA’s positive statements regarding ‘gender equity’ as heading in the right direction

The model is based on expert financial advice and media market modelling commissioned by the ACA and historically based revenue parameters, in lieu of CA’s requested financial disclosure.

This expert analysis suggests that over the next five years’ cricket in Australia will generate approximately $2.6 billion in revenue for CA in an income tax free environment.

The ACA remains intent on the new MOU being settled before the end of the current financial year when all international players’ (and many domestic players’) contracts expire.

Please find the ACA's full response here.