Australia pay dispute July 12, 2017

Sutherland, Nicholson in marathon meeting

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Play 01:43
Brettig: CA facing a commercial mess

Australian cricket's warring chiefs James Sutherland and Alistair Nicholson have held their most intensive meeting yet in an urgent attempt to end a pay fight that will ultimately have ruinous consequences for both men and their organisations if not resolved quickly.

Amid mounting commercial pressure both externally and internally, ESPNcricinfo has learned that Cricket Australia's (CA) chief executive Sutherland spent more than four hours with his Australian Cricketers Association (ACA) counterpart Nicholson in Melbourne on Tuesday in an effort to find a way forward.

While the meeting did not result in a breakthrough, more CEO-to-CEO talks are planned, and in itself the extensive discussion underlines the dire path Australian cricket is on. CA is presently without sponsors for its international men's team across all formats, with even the likely Test team sponsor Magellan unwilling to put pen to paper until the dispute ends.

The governing body's existing commercial partners such as the Nine Network, KFC, Commonwealth Bank, Bupa and Toyota are growing increasingly anxious about the uncertainty. The car manufacturer in particular was left fuming when it emerged that Mitchell Starc had signed up with a rival Audi dealership in western Sydney - defying the protected sponsorship rights for which Toyota have paid a premium. Other such deals are reportedly in the works.

It is believed that the next step for these sponsors would be to request fee reductions in lieu of the uncertainty and the ability of CA to fulfil its contractual obligations by making players available for advertising and promotional appearances. Such a move would have swift financial consequences for the board even as it withholds about A$1.2 million (USD 910,000) a fortnight in payments from around 230 players left unemployed by the June 30 expiry of the previous MoU.

That expiry has served as something of a trigger for Sutherland to get steadily more involved in discussions with Nicholson. Following Sutherland's May 12 letter to Nicholson threatening that players would eventually be left out of contract, the pair's first significant communication is believed to have taken place before the CA chief left for ICC meetings in the middle of that month. They spoke via the phone when Sutherland was in England, and again on his return to Australia.

Sutherland returned to CA's Jolimont headquarters on June 29 and initially declined to get directly involved in negotiations, despite the players' calls for him to do so. But once the MoU expired, his contact with Nicholson began to increase, leading to face-to-face talks briefly last week and more extensively on Tuesday. At the same time, CA's official lead negotiator Kevin Roberts has continued to meet with ACA negotiators, including the association's general legal counsel Joe Connellan.

Roberts has taken a harder line, echoing Sutherland's earlier letter, and also a pair of written refusals by CA's chairman David Peever to allow for third party mediation.

Play 03:46
What is the pay dispute all about?

However the increasingly febrile commercial atmosphere around the game is creating pressure for CA, as sponsors ask for explanations and the board's commercial teams ask how to go about their usual jobs in this gridlock. At absolute maximum both commercial partners and relevant CA staff are thought to have only about another four to six weeks before it is too late for new sponsors to commit to summer deals, though other areas will bite sooner than that.

For one, even though CA would be saving money from not paying players or sending the Australia A squad to South Africa, a significant portion of the board's staff are being left with little to do, opening questions about whether working hours are rolled back in the interim, or extra holidays taken. This abnormality in turn leads to questions being asked by staffers of managers, managers of executives and executives of Sutherland.

At the same time, the ACA's negotiators and the players themselves are aware that an extended dispute will only serve to shrink the overall revenue created by cricket in Australia, scaring off sponsors, drawing decreasing fees for those who remain and also reducing broadcast rights and gate revenues as angry fans either switch the channel or fail to turn up to matches.

While ultimately it will be CA's job as the governing body to clean up most of the mess, the players will feel the sting of reduced pay packets and also the invective delivered to them by spectators - much as Major League baseballers did at the end of the 1994-95 lockout that forced the cancellation of the World Series.

Sutherland's meeting with Nicholson came on the same day that the longtime CA board director Mark Taylor addressed nervous commercial partners about the current storm. In doing so he effectively stated that there was far too much at risk for the battle to go on much longer, whatever either party had hoped to gain out of it at the beginning.

Another voice calling for cooler heads to prevail this week was Sutherland's former lieutenant Michael Brown, who worked alongside him at CA for a decade from 2002. "It surprises me that the relationship has been allowed to get to the level it has," Brown told the radio station 3AW. "We spent a lot of time during my tenure making sure players were part of the game and we respected players.

"We lived with the arguments about payments and what was fair and reasonable... their share of revenue was always important. It seems now that both parties have come to a stumbling block, and my best advice is leave your egos at the door, sit down quietly, away from the media spotlight, and find a resolution because this is not good for the game.

"While the Ashes is important, the biggest driver of our revenues is our Indian tours, and we saw with Monkeygate back in 2008 the damage that [trouble with] India can do, not only to bilateral relations but to world cricket itself. We are one of the three strong teams in world cricket, and we need to maintain leadership on both [board's and players'] sides."

Daniel Brettig is an assistant editor at ESPNcricinfo. @danbrettig

Comments have now been closed for this article

  • Vallur3226231 on July 13, 2017, 15:34 GMT

    @Kanchan Bandyopadhyay on July 13, 2017, 10:35 GMT

    I don't know, whether you had been closely following the articles in this site on this dispute. The inimitable @Jose...P had been arguing for a while, that CA & media are cohorts in undervaluing Australian cricket, also stating that the undervaluation is an "unwanted leakage", whatever he means by that.

    Now your point is adding insult to injury, that not only CA collecting LESS for the media rights, they are also spending a hell of a lot more on them. Had it been some other country, the highest court of the land would have been alerted to look into the matter very closely, for any possible rip-offs.

  •   Kanchan Bandyopadhyay on July 13, 2017, 10:35 GMT

    Quite simply, the 'grass roots' argument is a sham.

    Looking at the 2015/16 Annual report the following expenses are found: 2016 $'000 2015 $'000 Players and Umpires (57,499) (77,160) Team Performance (28,863) (25,633) Game & Market Development (13,735) (11,560) Media, Communications & Marketing (34,868) (34,787) Operations (56,676) (50,970)

    So, operations earns (nearly) more than all the cricketers and umpires in the 1st class and Australian rep teams. But the most alarming part is: Media and Marketing is 2.5 times the investment in grass roots 'game development' 4,065,000 came from govt grants in 2015/6.

    It's CA being greedy, and using a great deal of media spin as cover. It's paid enough for it, I suppose.

  • Merv on July 13, 2017, 8:50 GMT

    Sutherland is only doing what his employing Board tell him. He is also worried for his job. Mark Taylor should be ashamed of himself as a Director of CA and I am sure his has forever lost the respect of most professional cricketers in the country. Does he see himself as another Bobby Simpson and ready to put the pads on again for Australia? I can't see him being an asset to Channel 9 as an interviewer in the future as no player will tell him much.

  • cluelessjan1 on July 13, 2017, 7:32 GMT

    this need to resolve in way that the incremental revenue that is generated should go to grassroots. its the whole cricket machinery that generate the revenue and not a select few. when will CA produce say a Jonathan Thurston perhaps you need a lot of money to go to grassroots for that.

  • philgr8017989 on July 13, 2017, 6:44 GMT

    ACA no idea. No business sense, no credibility.

  • heathq1437344 on July 13, 2017, 4:29 GMT

    Really so Peever states he is not anti-union and now everyone is saying he is right. Talk is cheap and actions always speak louder than words. For one he, Howard and co try to bypass the ACA and deal directly with players (yes he believes in collective agreements here- very easy to see). Why did the ACA take the IP rights of cricketers? Yes back to the rhetoric of we look after the whole game, including junior and grass roots, yet scoffed at ACA proposal which would have been better for grass roots. He wants them not part of the game but as employees, sorry did not realise I had to send my CV in to get a job as a batter or bowler. It is ridiculous that he is still trying to divide and push his agenda publicly whilst others are sorting this out, poor form. These changes are not necessary, downgrade your own empire and your pay check before seeking to break a 20 year working partnership.

  • heathq1437344 on July 13, 2017, 3:27 GMT

    Actually the more I think of this, maybe he (Peever) is pulling the wool over many eyes. Players were asking for the financial forecasts of revenue (which are always underestimated and expenses overestimated) that was always given to them in the past but withheld this time, as the players would ask for a bigger chunk of the revenue coming. Now that Peever and co has taken the revenue model of the table, the players and ACA are fighting for this to continue and so the compromise will be less % of the revenue share model being given, which Peever and co wanted all along.

  • Stephen on July 13, 2017, 3:02 GMT

    This has got to be one of thr most pointless disputes of all time - cricket australia so obviously in the wrong

  • Xiong on July 12, 2017, 19:50 GMT

    Don't compare our cricket teams to the franchise sports in MLB. Completely different things. Not to mention that one of those sets of sportspeople gets paid very much more than the other. I think most rational observers can see that CA is strong arming the players, and now it's coming back to bite them. The kind of labour "negotiation" Peever was trying to pull can only really work on an unskilled or easily replaceable workforce. I don't really consider cricketers at state or higher level to be either unskilled or replaceable. Unlike skilled engineers, of which there are millions.

  • Jose on July 12, 2017, 15:51 GMT

    @Cricinfouser at 9:19 GMT

    Don't belittle the Indian tour. There is something called "reciprocal tours". I provide you with 2 pieces of info, which may interest you.

    About a US$100 Mn (Profit from Revenue 250Mn) once & another A$265 Mn (Revenue) another year; NZ also touring that year.

    1. Here is an extract from an ESPN report, in a different context, when Sutherland said,

    "Following the ICC Annual Conference in Edinburgh, Sutherland, the CA chief executive, told ESPNcricinfo that CA was not alone in contemplating major changes to the revenue models based around bilateral (home and away) tours. Chief among these was the possibility of allowing overseas television revenue from India tours to Australia - worth up to $100 million extra to CA's annual balance sheet - to be at least partly diverted into a central rights package bundle to be shared among all members."

    verbatim quote.

    2. CA's annual report for 2011-12 says, OZ made a revenue of A$264,631,134 from India & NZ

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