Cricket Australia faces a summer of discontent.
The disruption caused by the COVID-19 pandemic has exposed financial and governance tensions and mistrust involving its players’ and state associations. However, those issues are a distant second to the current dissatisfaction and distrust that one of the sport’s broadcasting partners has with the quality and scheduling of the upcoming domestic playing season.
Channel Seven’s A$450 million concern with the restricted number of Australian international cricketers who might appear in this year’s BBL tournament now threatens to destabilise the sport’s principal source of revenue – the combined Foxtel and Seven six-year broadcasting deal signed in 2018 and worth A$1.18 billion over its six-year term.
In March, it had all looked so different. On International Women’s Day 2020, the MCG hosted the ICC Women’s T20 World Cup Final. Played in front of 86,000 people, Australia’s victory over India was a suitable end to a highly successful tournament. Within a week sport in Melbourne – including the first Formula 1 race of the year – and indeed globally had to shut down due to the pandemic.
Of all the major sports in Australia, cricket seemed the best equipped to survive the coronavirus lockdown. By then, 90% of the season had been completed. The men’s T20 World Cup tournament, to be hosted by Australia, was not scheduled until October, a month that marked the second anniversary of the appointment of the then CEO of Cricket Australia (CA), Kevin Roberts.
And yet the following month 80% of staff at Cricket Australia were stood down. The CEO was indicating that by August cricket would, to the amazement of many within the sport, have severe cashflow problems.
By June it was clear the men’s T20 World Cup would have to be postponed and Roberts was gone. He was replaced on an interim basis by Nick Hockley, then the CEO of the T20 World Cup local organising committee who had overseen the successful women’s T20 World Cup earlier in the year.
The previous Cricket Australia CEO, James Sutherland, had been in the job for 17 years. In contrast, 2020 was a precarious year to be a CEO in Australian sport – the CEOs of both Rugby Australia (RA) and the National Rugby League (NRL) also departed their jobs in April.
Reflecting on the year’s instability, Sutherland commented empathetically that when you’re a sports administrator, you can deal with anything but uncertainty.
And for all Australian sports, 2020 has brought nothing but uncertainty to their finances, competition scheduling and administration.
However, one point that has been constant in the operation of elite professional sport in Australia and elsewhere is how dependent their revenues are on TV broadcasting deals. The AFL’s revenue in 2019 was just shy of A$800 million, half of which related to broadcasting and media. Broadcasting accounted for 61% of the NRL’s total revenue last year.
The lengths to which the AFL and the NRL have gone to ensure their seasons go ahead – from biosecurity hubs and lobbying state and federal governments for border exemptions, to pay cuts for players and staff – must be seen in the context of their dependency on TV money.
In April, the equation for the AFL and NRL, as it was for Rugby Australia and the Football Federation of Australia (FFA) whose schedules were also affected, was simple: in the absence of games, there would be no obligation on broadcasters to honour their TV rights deals. This meant up to two-thirds of the sport’s revenue would disappear overnight.
In terms of contract law, broadcasters hinted at provisions in the agreements with sports such as force majeure clauses (unforeseeable circumstances), acts of God and other principles of contract law, such as the doctrine of frustration.
Broadcasters argued these would allow them to walk away from existing deals given that, for reasons outside both parties’ control, the playing season could not go ahead as scheduled, if at all.
Even as sports bodies desperately gave them assurances a season would go ahead, broadcasters remained adamant that the product they had originally paid for was now of such a different variety that the original broadcasting deal would have to be stood down and terms and conditions renegotiated.
Clearly, it was in the interest of the above sports bodies to enter into such negotiations. They did so with alacrity and some success. It must also be noted that an absence of live TV would likely have had an impact on what has fast become the second-most-important source of review for Australian sport – gambling.
For the broadcasters, as the playing seasons in the AFL, NRL and other codes were about to begin, they were acutely aware that without sport a significant advertising hole would be left in their schedules for the next six months. Moreover, given the pandemic had halted production of other advertising-rich programs such as reality TV, and the postponement of key international events such as the Olympics would exacerbate the scarcity of live sport on the schedules, it was also in the interest of broadcasters not to walk away from such deals.
The lessons from all of this are that, despite its protestations, it seems inevitable Cricket Australia will also have to renegotiate its broadcasting deal with Seven. The reality for modern sports organisations is that, while they rightly lament the absence of spectators, a dearth of subscribers does much greater commercial damage.
Cricket Australia faces a slightly trickier situation than the AFL, NRL and others faced earlier in the year. A key concern for the domestic broadcasters is that CA has been frustratingly slow in confirming its summer schedule.
Moreover, in renegotiating with other sports, there was never an issue that the best players available domestically in those sports would not play. Given the international demands and scheduling in cricket – notably Test matches against India and Afghanistan – it seems CA cannot guarantee the availability of the quality of player in competitions such as the BBL that the broadcasters feel their money deserves.
While matters now seem tense between CA and its broadcasting partners, the current standoff is probably all just part of the preening process. Already, CA has responded by indicating it will be more aggressive in its recruitment of marquee international players for the BBL. It has also raised the salary cap for those on BBL rosters. A “relaunched” BBL in its tenth year and over the summer holiday period would be an attractive proposition.
As the interim chief of CA, who is in an unenviable position, contemplates the inevitable phone call with the broadcaster, it might be advisable for him first to call the CEOs of the other sports organisation that have been recently through this process. The sport’s former, long-time boss Sutherland, recently installed as the CEO of Golf Australia, would also be worth talking to. Their experience could be invaluable for cricket in the weeks ahead.
Finally, an interesting subtext to all of this is the emerging view that sports rights are overvalued and the future of such deals lies elsewhere in streaming services and on other digital, even in-house platforms.
But that is a matter for the future. For now, cricket powerbrokers should heed the advice of one of sport’s most colourful dealmakers, the boxing promoter Don King, who once said that, in sports contracts, you never get what you deserve, you get what you negotiate.
Last week, the NRL announced league play would resume in late May, following the introduction of strict biosecurity rules.
But even with new restrictions in place, the league should not resume until it can guarantee the safety of their players and employees.
The league also needs to ask serious questions about the social role of New South Wales’ biggest sport. Rugby’s return can signal a return to normalcy, but is the NRL sending the right message at the right time?
Many clubs are anxious about the short timeframe for restating play. They need enough time to resume operations, rehire personnel, stake out lodging and restart training. They also need time to put in place the proper health precautions.
Although the league claims its rules will be more “stringent than government restrictions”, it is unclear whether the biosecurity measures will be approved at the state or federal level. The league released a 47-page memorandum to clubs on Sunday evening, including additional measures such as:
increased player testing
playing in empty stadiums
a restricted schedule that limits travel
a mandatory COVID-19 training module
the social isolation of players inside their homes, except for essential business and travel
tough sanctions for rule violations.
The premiers of Victoria and Queensland have already voiced concerns about the NRL’s plans. While Prime Minister Scott Morrison and the federal government have no official position on the move, delegating responsibility for oversight of the NRL’s plans to the states, critics say the resumption of play sets a bad example at a time when Australia is on the cusp of eliminating domestic coronavirus transmissions.
Global health expert Adam Kamradt-Scott has said the restart date was “arbitrary” and warned
“if [the NRL] jump the gun and restart things too early we will confront the situation where we will see cases rise again and us having to go back into stronger restrictions.
The NRL’s weakened financial position has played an important role in its decision to resume play. By mid-April, the league only had about $70 million in cash and was losing $13 million per unplayed round.
The league asked the government for a bailout and was denied. Despite having its largest-ever television contracts, the league had not invested in any collateral, such as a stadium or even the land under its own headquarters, and over the past few years, had spent down its rainy-day fund.
Having also not invested in pandemic insurance, it was looking at a certain financial catastrophe.
A world without sports
The league’s financial woes worsened after a fortnight of sparring with its biggest television partner, Nine, which led pundits to wonder whether the NRL might still have a television home when its current contract ends in 2022.
At the end of the week, the NRL seemed to reach an agreement with Nine. Their rapprochement comes with additional confidence of a forthcoming three-year extension of their television deal, but likely worth less than the last agreement.
By contrast, the NRL’s chief rival, the AFL, had put itself in a position to weather the virus for longer – a fact many rugby fans likely found galling. The AFL also cancelled play and stood down up to 80% of its staff, but it received loans from ANZ and NAB, thanks to the AFL’s ownership of the Docklands Stadium.
The recent departure of NRL Chief Executive Todd Greenberg and the resignation of Rugby Australia Chief Executive Raelene Castle further illustrate how difficult a time it can be for rugby administrators.
Of course, there is danger with restarting too soon, as sporting clubs are particularly vulnerable to the spread of diseases.
Before the NBA season was shut down last month, a number of players tested positive for coronavirus, including four members of the Brooklyn Nets. Only one of the Nets was symptomatic, which raises the question: how long might the asymptomatic players continued to play had league officials not postponed the season?
Asymptomatic carriers could be the biggest problem for the NRL, too. A study in the British Medical Journal and a World Health Organisation report suggested that four-fifths of infected people may be asymptomatic.
As such, the NRL’s proposal to use apps to check temperatures and overall player health might miss those who are infected but not showing symptoms.
The NRL has also had significant issues with health technology in the past, such as when its “sideline injury surveillance” technology failed to properly assess head trauma to Matt Moylan after a shocking collision last year. Moylan played for another 10 minutes before being pulled off the field.
There is also growing scepticism about the NRL’s ability to police itself.
Peter V’landys, the chairman of the Australian Rugby League Commission, promises there will be sanctions for those who violate the biosecurity measures.
We’ve got no option, there must be a deterrent because one reckless act will bring down an entire competition and the livelihoods that come with that.
But has the league developed enough trust? It resisted calls for independent doctors to assess concussions for years and, since agreeing to the checks, has only done them inconsistently. It is not certain that league-affiliated doctors would be any more responsible in their approach to coronavirus.
The league is also relying heavily on buy-in from players, many of whom are known more for their recklessness than responsibility. Just this week, several players were forced to apologise after breaching social-distancing rules on a camping trip.
Nor is it clear that fans will support these changes. How will supporters respond, for instance, if a star player is sanctioned for an unessential trip out of his home?
Another logistical question: does the league plan to keep players and other employees separate from their families for the whole season? In other sports, similar models have proven difficult. Teams on the Tour de France have traditionally tried to keep riders separate from their families, with mixed success.
It has been a month without rugby and the NRL’s decision to resume play promises an end to every sports fan’s purgatory. Even so, the league should strongly reconsider. A longer delay, or even a cancelled season, is better than risking the lives of players, league employees and other Australians if the coronavirus were to spread further.