Cricket South Africa has updated stakeholders on its proposed T20 league.
- Strict financial disciplines are in place to avoid financial pressure on CSA.
- CSA believes that it can become a global sport event on the national calendar.
- It is important that new revenue streams be pursued, but…
- The desire to host such an event cannot be considered ‘at all costs’.
- CSA will rather disappoint with postponement than launch an unsustainable tournament.
- The realities of SA call for a much wider involvement than only financial investment.
- CSA will continue to pursue every possible opportunity to launch the league in 2018.
Cricket South Africa today provided an update to all its stakeholders on activities around its proposed T20 league to provide perspective and context on the work done thus far.
‘There have been understandable concerns expressed in the media,’ commented CSA chief executive Thabang Moroe, ‘and it is important that we address these concerns and bring all our stakeholders, who include the media, our loyal fans, commercial partners, CSA members, government and public at large, on board.
‘We have also briefed Sport and Recreation South Africa (SRSA) and we were able to assure SRSA that CSA remains focused on its core business of being the custodian of all cricket activities which ultimately advance amateur and professional cricket in South Africa. In turn, they responded very positively to our strong financial position, stability and performance and our commitment to good corporate governance and transformation.
‘CSA prides itself in the standards of governance we have applied over the past few years and will continue to maintain those standards,’ added Moroe.
‘It is important to highlight that CSA is a profitable sporting federation and that much as we believe in the product, we do not have to host a T20 league to assure financial sustainability. The game of cricket in SA is in a healthy state as demonstrated by the growth in cricket development at grassroots level, a healthy pipeline of young future talent as well as women cricket that have progressed with leaps and bounds. A recent sponsors event again confirmed the satisfaction of some of our major stakeholders.’
The Ministry of Sport and Recreation, led by the Minister Tokozile Xasa, welcomed the report from CSA that was presented to her department by the CSA executive.
‘We welcome the brief we received from CSA, and we believe that they have shown good governance in the manner they run the federation and transformation is in the centre of cricket. Cricket remains our flagship federation that continues to be inclusive of all our people,’ Minister Xasa said.
CSA STATEMENT: New T20 league update
Given the difficult market conditions in which sports sponsorships in particular as well as broadcast revenue and traditional key revenue streams for sporting federations, are increasingly coming under pressure, it is important that new revenue streams be pursued. CSA has carefully looked at how it can enrich and enhance its products for the SA cricket enthusiast.
There is regular debate in cricketing circles on whether the T20 format of the game is making inroads at the expense of the traditional five-day game. With this in mind and the success of the shortened format globally, the Board and members of CSA remains of the opinion that a new T20 league event can be successfully launched in South Africa.
In our assessment of these and other global events, it became apparent that these events take quite some time to become cash generative and certain similar leagues internationally only became cash neutral after four to seven years.
As a result, CSA started to explore and implement such a league in 2017. We were well aware of the upfront investment required and through financial discipline over the past five years built up reserves, supported by a cash injection when the Champions League was terminated, to be able to enter the T20 space.
The 2017 anticipated model was one of privately owned teams but with a major reliance on broadcast revenue. Unfortunately, broadcast rights could not be secured in time and the absence of broadcast right has a direct impact on sponsorship potential. The principle we still cling to is that we will rather disappoint with postponement than to launch a tournament that may not be sustainable. Thus, our endeavour to launch a polished product, within our means of course, that will be responsive to the needs of our identified market.
Further, CSA believes that we should continue to pursue opportunities to launch such a tournament but wish to emphasise that we will not put the well-being of the game at risk if we are not comfortable that we can launch and host such an event successfully. CSA will shortly announce its annual financial position and will in there confirm that we currently still hold substantial reserves, despite the T20 losses in 2017. PWC recently completed a full audit of the financial affairs of CSA.
The board and members decided early in 2018 to continue to explore the possibility to launch a league in the current year. A league of this nature over a six-week period is exciting: it coincides with the SA summer holidays and is a great fan-based event. We still believe we should add this to our cricket calendar.
The model that is under consideration for 2018 is one of starting from a clean slate and somewhat toned down from 2017. We still believe that stakeholders that expressed the wish to be involved in 2017 should be part of the future of this league. However, if the event is done on a smaller scale to start with some of the initial thinking in 2017 might only be phased in over time.
On the back of the above-mentioned decision, CSA received offers from four prospective investors. The board considered the options and decided to enter into negotiations with a possible investor that was South African-based. Although decisions need to be commercially founded, the realities of SA call for a much wider involvement than only financial investment. It is against this background it was felt that an SA equity partner would add to the SA flavour of the event. Unfortunately, after two months of negotiations, it became clear over the past week that certain terms of such an arrangement cannot be agreed upon. However, negotiations continue with SuperSport on the broadcast deal.
CSA, in its deliberations with other stakeholders, has not made available to those interested parties the equity stake that was earmarked for the SA entity. An equity investment is not a pre-requisite to host such the event. However, it can indeed contribute to enhancing an initial event.
The CEO of CSA and the executive management team continue to pursue every possible opportunity to launch the league in the current year.
The board of CSA is very aware of time pressures to ensure a successful hosting and has therefore mandated the executive to pursue opportunities with a definite date by no later than the middle of September to present a final outcome. Very strict financial disciplines are in place to ensure that any effort to reach such finality will not cause financial pressure on CSA.
CSA believes that this can become a global sport event on the national calendar. However, the desire to host such event cannot be considered at all cost. In this regard, the CSA approach to cautious optimism might not be a popular approach. As a responsible governing body, CSA must ensure that an aspirational event is not to the detriment of the bulk of many cricketing activities that currently serve players and supporters.
CSA appreciates the support of many passionate cricketing stakeholders and will continue to engage with interested parties in its endeavours to find the optimal model to host such an event successfully and something all South Africans will be proud of.
Photo: Lee Warren/Gallo Images