ICC news February 9, 2017

Revealed: The ICC's new financial model

ESPNcricinfo staff
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© ESPNcricinfo Ltd

ESPNcricinfo can reveal details of the ICC's new financial model that was proposed to Full Members at last weekend's board meeting in Dubai. The models are part of a broader report, produced by an ICC working group committee, which seeks to provide the basis of a new constitution for the game.

The draft of a new constitution was passed in principle at the meeting, with seven members voting for it, two opposing and one abstaining. Members will now bring thoughts, suggestions and concerns to the table in April, which may result in changes to the draft.

The biggest obstacle will be the financial model and, in particular, the BCCI's objections to it. ICC revenues for this rights cycle - 2015-2023 - are estimated to be around US $2.5 billion. Some estimates suggest revenues may go as high as $2.7 billion. The projections in this model are for revenues up to $3 billion. These are based on the possibility of additional ICC tournaments being added to the existing cycle. ESPNcricinfo has seen the model, from which a number of things stand out.

How the ICC revenues will be split (2015-2023 rights cycle)
ICC Gross Revenues
(in US$)
2.5 billion 2.6 billion 2.7 billion 2.8 billion 2.9 billion 3 billion
 BCCI  255-260  270-275  285-290  305-310  320-325  335-340
 ECB  120-125  130-135  135-140  145-150  155-160  160-165
 CA  110-115  120-125  125-130  135-140  140-145  150-155
 CSA  110-115  120-125  125-130  135-140  140-145  150-155
 PCB  110-115  120-125  125-130  135-140  140-145  150-155
 WICB  110-115  120-125  125-130  135-140  140-145  150-155
 NZC  110-115  120-125  125-130  135-140  140-145  150-155
 SLC  110-115  120-125  125-130  135-140  140-145  150-155
 BCB  110-115  120-125  125-130  135-140  140-145  150-155
 ZC  75-80  80-85  85-90  90-95  95-100  105-110
 IRE  50-55  55-60  55-60  60-65  65-70  70-75
 AFG  50-55  55-60  55-60  60-65  65-70  70-75
All member board revenues in millions

No contribution, no cost
The most controversial aspect of the 2014 Big Three financial model was the idea of contribution costs, and the realisation that not all members bring to the game an equal amount of money. What each Full Member earned in total from the ICC revenue was a percentage figure of the total revenues (the contribution cost, based on contributions made, and provided as compensation for playing in ICC events: the BCCI had a 20.3% share, ECB 4.4%, Cricket Australia, 2.7% and so on) plus an equal share of the surplus (which is how revenues had been divided until then). The seven non-Big Three boards also got an additional $10 million over eight years as part of the Test Cricket Fund.

In the new model, this breakdown of earnings is redundant as is the contribution-cost element. Instead one lump sum figure is provided for each board. But the principle behind contribution costs remains because in every projection, the BCCI gets a bigger share of the pie than every other board - twice as much, in fact, as the next.

The Big Three take a hit
In the new model, the percentage shares of the BCCI and ECB in the total pie have gone down, while that of CA remains roughly the same. But a quick calculation will tell you why the BCCI is unhappy with these models. Not only is there no real formula behind them, but the Indian board takes the biggest hit from the 2014 model.

In that model, for gross ICC revenue of $2.5 billion, the BCCI stood to earn between 17.6-18% of the revenue (between $440-445 million*). In the new model, at the same gross revenue, it gets 10-10.2%. That is a reduction in potential earnings of between $180-190 million. The percentage share does increase should the ICC's revenue increase but it isn't a large spike: if the ICC gets $3 billion as revenue, the BCCI's share will be between 11.16-11.33%.

Under the 2014 model, the ECB stood to take 5.8-6%, whereas now its share is 4.8-5%, or between $20-30 million less. CA's share was between 4.4-4.6% in the last model and is more or less the same now. As with the BCCI, their shares will increase should the ICC's total gross revenue increase. That is the case with all boards.

Equity
The ICC said in its press release after the meeting that a sense of equity played a big part in the determining of these figures. That much is clear in the fact that below the BCCI and ECB are seven boards that stand to get essentially the same share for nearly any projected value of total gross revenue.

It would seem as if the ICC has tried to preserve both a sense of contribution cost - by recognising the right of the BCCI to the largest share - and, by narrowing the gap between them and the others, ensuring a degree of equality among the boards beneath them. The problem, of course, is that there remains no set formula behind these numbers - they remain, essentially, arbitrary figures.

Welcome Ireland and Afghanistan
You will not have missed the last two entries in the first table - Ireland and Afghanistan. The status of both was discussed at the board meeting; Afghanistan's domestic multi-day tournament was given first-class status, thus fulfilling one key prerequisite to play Test cricket.

This model - as well as the Test league structure - is perhaps the clearest sign yet that there is a will to have them playing Tests, or at least be part of the big boys' club. Over eight years (with ICC gross revenues of $2.5 billion) each could earn $50-55 million.

Goodbye Test Cricket Fund
One of the redeeming features of the Big Three model was the introduction of a Test Cricket Fund that sought to subsidise unprofitable bilateral series outside the Big Three. That amounted to $10 million for each of the seven boards over the eight-year cycle. The first payments were made to these boards last year.

This move is likely linked to the introduction of a league structure for Test cricket, which, in theory, means that all bilateral contests have greater context, and thus, greater financial value and so do not need subsidising.

*Footnote: The figures in this Big Three model are different to those that appeared in the original position paper in January 2014

Comments have now been closed for this article

  • bumsteer on February 14, 2017, 11:08 GMT

    Hey AndrewWI....you seem to suggest that a Board has no impact on the participation rate of their fans. In a match India v SA, the majority of the income would be as a result of the participation of Indian fans not SA fans. If the BCCI chose a second rate team to play no amount of SA fan participation would make up for the loss of Indian fan revenue. indeed some SA fans would probably not watch. You could also argue that the massive participation of the Indian fans is a result of the excellent promotional work and sporting organizational management of the BCCI over a number of years. If the only value each Board added was putting 11 players on the field how on earth then could one see any value in the ICC...a mere middleman.

  • AndrewWI on February 11, 2017, 21:13 GMT

    @T20FOREVER Yes absolutely. If India makes it to a Football WC, they must share the amount equally with Brazil or any other team for that game. I'm pretty sure that is what happens currently, though I'm open to correction here. @BUMSTEER: Ok, please explain then. How does the BCCI contribute more to entertaining the Indian market than, say CSA, in a South Africa vs India game? Does the BCCI field 22 players? Does the BCCI prepare the stadium? The BCCI simply ensures that India has 11 players capable of producing an international level match the same way as CSA does. @SAURON_OF_MIDDLE_EARTH - yes, you have it in one of your previous posts. Of course NZ v SA does not deserve a handout from Ind v SL. I agree with the match by match concept equal split, else, a formula needs to be arrived at based on team popularity (history based of course) with the entire cricket market. What I oppose is the claim from GREATEST_SHAME and FGUY that the BCCI get paid for Indian peoples' viewership.

  • Sauron_Of_Middle_Earth on February 11, 2017, 5:27 GMT

    In my previous post, "Now my previous post points out an increase of $160 million contributing to a 6.4% rise in ICC expenses." Should have been "Now my previous post points out an increase of $160 million contributing to a 6.4% rise in ICC's share." Apologies.

  • CricMystique on February 11, 2017, 5:15 GMT

    @ TESTCRICROX ON FEBRUARY 9, 2017, 12:21 GMT - agree with u...good questions...

    really wonder where all that money is used up....can t see any spectacular improvement in our facilities, stadia's , for spectators, for the youngsters....nothing...can anyone answer....

  • Sauron_Of_Middle_Earth on February 10, 2017, 18:56 GMT

    @Jose_P - I made a few calculations assuming a total revenue of $2.5 billion. I think the Associate funds are intact -

    BCCI (22.9%) - 10.2%

    ECB (11.7%) - 4.8%

    CA (5%), NZC (2.99%), WICB (3.18%), CSA (3.75%), PCB (3.82%), SLC (3.18%), BCB (2.67%) - 4.4% each

    ZC (2.54%) - 3%

    Ire/Afg (~0%) - 2% each

    Total (59.19%) - 52.8%

    (Numbers in parenthesis indicate Big 3 (old) split).

    Now my previous post points out an increase of $160 million contributing to a 6.4% rise in ICC expenses. That still leaves the ICC with ~40% left. If funds allotted to the Associates were killed, then 10% of the revenue disappears! So perhaps the Associate fund remains as it was i.e., ~10%? (Please feel free to correct me)

    What people don't notice is what ICC has pulled off by isolating the BCCI and gaining access to an extra 6-7% for itself. A fair assumption is most of this has been spent on Eng as CT-2017 is the only ICC event that has exceeded cost expectations, thereby gaining ECB's vote.

  • baghels.a on February 10, 2017, 18:52 GMT

    @SHANE_OH : We can't draw parallel with Football by bringing how Fifa distributes money because Football is primarily based and driven by Leagues , Club v/s Club unlike Cricket which is widely based on Nation v/s Nation contests, TV rights of a Football league like EPL for a 3 year period is 8.5 Billion Dollars !!! now EPL or for that matter La Liga,Bundesliga don't share there riches with some of the poverty ridden clubs in Africa and Asia , only this year a 120 year old Football club based in Kolkata folded up for the lack of funds .You have ignored some pertinent points posted below citing how boxers like Mayweather get lion share of money while his opponents gets lot lesser. .

  • Sauron_Of_Middle_Earth on February 10, 2017, 18:14 GMT

    @Shane-Oh - With regard to comparisons with FIFA. I understand that superficially, it seems like an organization that abounds in benevolent traits. Equal revenue sharing, equal voting power etc. The problem is FIFA is well known for using the equal revenue sharing scheme to disrupt the internal democratic processes in the organization. They basically use the smaller nations, who want nothing to change with respect to revenue distribution, to disrupt its elections which rightfully need to be controlled by the countries that matter (If you follow US television, John Oliver has a rather famous piece on this). For example, there's no justification that Montserrat, a country with <6000 people gets the same funding that Spain gets and the same no of votes! I hope you can see how flawed and inefficient this system is. Cricket, fortunately, has a much better voting system. However, it's best if we sort out the principles of revenue distribution along incentive lines to avoid FIFA's position.

  • fguy on February 10, 2017, 13:04 GMT

    @SHANE-OH (1) way to go ignoring my other points (2) if you dont think sports administration is a sort of business then i have a bridge to sell you. if sport is some holy thing then it doesnt need money, it'll run on the love of the people, no; & then why are ecb/ca etc taking any money from icc. they come from super rich countries & for good of the game which they so profess to love they shouldnt take a penny after all sports is not a business, no? (3) football is popular not bcoz of the way fifa runs it but bcoz its simple to follow, cheap to play & is over in minutes & not days, ofc t20 couldve helped make cricket more popular but since englishmen dont consider it to be 'proper cricket' it'll never be pushed by the hierachy (4) you must be one of the very few that thinks fifa is fair. why is that? is that coz its still controlled by the western nations? fifa treats countries in SC worse than icc treats affiliate nations.

  • shane-oh on February 10, 2017, 11:58 GMT

    @FGUY - actually you're quite delusional. For all it's faults, FIFA pumps hundreds of millions of dollars every year into grassroots development of the game in places where there is little infrastructure. They take all of the revenue from major tournaments, pay handsome appearance fees to the competing teams, top these up with payments based on results in the tournament, and invest the rest in the game. You actually couldn't be more wrong. The constant comparisons to business are boring and spurious. This is sport, not business. There is still scope for sport to be run by people who are passionate the game, as there should be. I'm glad you brought this up; cricket should definitely be looking to emulate football, by far the most successful and popular sport in the world.

  • fguy on February 10, 2017, 11:22 GMT

    said this before - - - love the double standards of west - in areas where its at an advantage they strongly advocate capitalism & its various forms, in areas where they are at a disadvantage they want socialism & its various forms; if the other countries disagree they're branded as "coming in the way of progress/obstinate/blind/dictatorial" etc you dont see the financial giants of soccer/rugby/all other sports except cricket being constantly badgered to help out the weaker teams. we all know the reason why its happening here. ecb is only taking a 1% cut, CA's revenue is not getting touched & the media/fans from these & other countries have the gall to call BCCI a bully. the thing happening here is a cabal looking to rob a guy when he's fallen on the ground & is temporarily vulnerable. everyone is happy coz its the non-western guy who's being shown his place. CI came up with 1000s of anti-India articles during big 3, where's your criticism now??

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