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Big three eye bigger slice of ICC revenue pie

Sharda Ugra and Abhishek Purohit

January 18, 2014

Comments: 19 | Text size: A | A

Haroon Lorgat, the ICC chief executive, at the annual conference, Kuala Lumpur, June 26, 2012
The Full Member board left out of the Test Cricket Fund is Cricket South Africa © Getty Images
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The proposal by a "working group" of the ICC's Finance & Commercial Affairs (F&CA) to revamp ICC administration and distribution of its earnings, has recommended the introduction of a revenue stream for Full Members called, under various heads, "Distribution Costs/Contribution Costs/Participation Fee" to be earned from ICC's gross revenues and distributed to members through a graded percentage share, worked out by a "marked scoreboard method."

According to current practice, the ICC gave 75% share of its 'surplus' (revenues minus costs) from events to ten Full Member nations and distributed the remaining 25% to Associates and Affiliates. Distributing the gross revenues on a graded percentage to ten member boards - with three, the BCCI,ECB and CA, earning more than the rest - means reducing the percentage of surplus from ICC events. This will affect the 25% share to be distributed among Associates and Affiliates (A&A), of which, the proposal recommends giving the top six half the share of the 25%.

The "position paper" drafted by the F&CA committee's "working group" effectively cedes most executive decision-making in the ICC and control of its finances to the BCCI, Cricket Australia and the ECB. A draft proposal on these lines will be presented to the ICC Executive Board during its quarterly meeting in Dubai on January 28 and 29.

The "marked scoreboard method" cited as a benchmark for the percentage distribution of gross revenues will be based on four parameters: revenue contributed to the ICC, historical ICC membership, on-field performance over past 20 years in men's and women's competitions and domestic development performance.

The draft document states that during the last ICC media rights and sponsorship process, the "value contribution" of India was over 80% while the contribution of other Full Members ranged from 0.1% to 5%. There is no supporting evidence of this estimate available in the document, but the working paper states that "calculations have been worked on and negotiated by BCCI, CA and ECB. Agreed principles are sound and breakup between categories appropriate."

Given that revenue contributed to the ICC is a major parameter for the contribution/ distribution cost, the BCCI could earn $63 million and the BCB nothing as "Contribution" fees from the current revenue levels of $1.5 billion. Should the revenue increase, the BCCI, the ECB and the CA stand to gain a much larger share (If revenue levels rise to $3.5 billion, the BCCI could earn $766 million).

These earnings will be over and above the share of the surplus: each Full Member board would earn $52 million at current revenue levels, but an estimated $85 million if revenue increases to $3.5 billion.

The "distribution model" forms the bulk of the position paper and recommends setting up a Test Cricket Fund for six of the remaining seven members outside the BCCI-CA-ECB triumvirate. The Full Member board left out of the Fund is Cricket South Africa but the draft available does not specifically mention the omission nor its reason or purpose. The fund is set up in order to ensure that "uneconomical tours" (which do not find their way into newly recommended FTP agreements) do not lead to "no Test cricket being played - or inappropriately too little Test cricket - being played by Full Members." The fund is to be distributed among BCB, ZC, NZC, SLC, PCB and WICB, who will have to report utilisation annually to F&CA. As it is proposed, the sum will begin at a total of $30 million for a revenue level of $2.25 billion and be $90 million at a revenue level of $3.5 billion.

The development expenditure on Associates and Affiliates (A&A), according to the position paper, derives insufficient returns. It recommends the scaling down of financial authority of the Development Committee, who must now report and seek fund sources from the F&CA (which is the central recommendation committee on all financial and commercial matters, personnel, event management). Of the A&A's 25% share of the surplus, it is recommended that half should be given to the top six Associates.

The proposal also states that ICC costs can be reduced, at a conservative level, "by 15-20%" and calls for a revisiting of the vastly different operational costs for events between 2000-07 ($220 million), and 2007-15 ($317 million). The BCCI-CA-ECB have also recommended the formation of a "standing team" of representatives from each of the Boards who have a mandate to look at "every element of each ICC event and event costs" and will regularly report to the F&CA committee.

The "position paper" describes the ICC as "merely an organisation leveraging the rights for and on behalf of members by conducting events." It is observed that "members are providing their players and playing windows for ICC events," which restricts, "some members' ability to play their own events." At the moment, the ICC events requiring the players from Full Member nations and therefore affecting their player windows, are the men's and women's World Cups, the U-19 World Cup and the World T20. The Champions Trophy, begun in 1998 to initially generate ICC funding and restricted to the top eight member nations, has been called to a halt, but the proposal does refer to its reinstatement over the World Test Championship in 2017 and 2021.

Sharda Ugra is senior editor at ESPNcricinfo; Abhishek Purohit is a sub-editor at ESPNcricinfo

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Posted by Twinkie on (January 24, 2014, 3:08 GMT)

If this passes I'm done with cricket after forty years. If you can turn me off of cricket, the only sport I follow consistently, I'm sure many others will react in the same manner. We may not have the power to stop this from passing. They are obviously too stupid and arrogant to listen to us. But sports are about spectators. Let us stop spectating! Eventually those greedy goons will realise who has the real power. The money they claim is theirs is actually ours which we give to them for a service. Let us keep our money until they serve us well!

Posted by   on (January 22, 2014, 2:43 GMT)

This is not cricket, but a shirt sighted scheme by India, Australia and England to control the business side of international cricket for their advantage. According to the new formula Sri Lanka we bet least than 2%, based on value contribution on monetary terms. Does that means Sri Lanka's contribution to international cricket is less than 2% if so how was it Sri Lanka was awarded spirit of cricket award by ICc. And Sangakkara invited deliver Cowdry oration? Can the so called big three at among themselves and sustain their revenue streams?

Posted by   on (January 21, 2014, 15:31 GMT)

it can't happen. I can bet.

Posted by 4cricketluv on (January 21, 2014, 11:13 GMT)

The origins of cricket can be traced back to the 16th century yet, today, we still only have 10 test playing cricket nations...and then they play a world cup with an equally small number of countries in a format that is not even the best cricketing format. Compare that to football, also first played 300-400 hundred years ago with a world cup consisting of 32 teams with Michel Platini wanting to expand that to 40 teams. 204 teams entered the qualification for the 2010 world cup.

This move, if it becomes reality will polarise the game of cricket. Look what is happening to cricket in the USA! The game is not expanding and now 3 nations want to hijack it. Maybe a new cricketing body will expand and develop the game around the world and we may one day have a competition worthy of being called a cricket world cup.

Posted by heathrf1974 on (January 19, 2014, 19:46 GMT)

I think this is insane and de-gressive. How do you expect to expand the game with the big three gaining most of the revenue when they are already in strong financial situations. What the people of these three countries need to do is get cricketers into these boards who have the game's best interest at heart. Currently these boards do not.

Posted by VisBal on (January 19, 2014, 16:08 GMT)

@Yuvi_gladiator: You seem to have misunderstood what the ICC is saying. They are talking about the contribution of funds to ICC from each country. CSA is profitable, but it is the contribution to ICC finances that apparently keeps it out of the Big Three.

Posted by ASHTARR on (January 19, 2014, 10:45 GMT)

SOUTH AFRICA....who has the number 1 batsman and bowlers inTEST CRICKET....

Posted by   on (January 19, 2014, 10:11 GMT)

This is the continuation of the unraveling of society as we know it. The same is happening in every sport whereby big corporations want to be seen as part of in the world. To put it simply: 1) Players have been told they are a product, an entertainment package. Like movie stars and musicians they demand that they are the star attraction and should get the big money, even down to the first class cricketers who have zero people who know or care about them, let alone watch them. 2) The Cricket Boards bow to them and their player associations. Without them how possibly can a continual stream of talent to keep the game healthy. Operating costs go up disproportionately to local revenues from affiliation fees and ticket sales. 3) Corporations come in to save the day, the sponsors and the broadcasters, they pay the big bucks because ordinary people cant afford to go to games because there are too many and they have lost meaning, plus the 'seemingly' important T20 comps. 4) Start again

Posted by Moppa on (January 19, 2014, 1:55 GMT)

I don't have a strong view on this proposal yet, but I have to respond to the simplistic arguments being made here by some commenters. If Ind/Eng/Aust ('the big 3') take a higher slice of the ICC surplus but also succeed in scheduling more profitable events that create a larger surplus, it is entirely possible that SA/NZ/WI/SL/etc will get more money. Of course, depending on how the formula works, they might not. But it is simplistic to say 'the poor get poorer' - if more profitable events are scheduled, it is entirely possible that everyone gets richer. Having said that, the way to earn more money would seem to be fewer loss making series against smaller members, more ODIs and more T20s... all of which may not be in the best interests of the game. We shouldn't kid ourselves that the big 3 are not already focusing on more profitable series and tournaments. The question for cricket fans is - what mix of tournaments and formats best balances broad development of the game and revenue?

Posted by yuvi_gladiator on (January 18, 2014, 22:34 GMT)

if a team like SA after there proud cricketing history cannot generate enough cash from their own country to run the game then there is seriously wrong with there own system. the extra money generated by the bcci deserves to be spent on the aspiring but not so rich cricketers as well as low level facilities in india as more than 80% of cricketers from small town lack it because of more population. cricket will survive just like american football does in the worst case and those who like and support the game should play it

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