The Big Bash League's next broadcast rights deal - and perhaps even its coverage later this year - has been pushed into uncertain waters by a grim financial outlook for its current rights holder, the Ten Network.
Ahead of the final season, before the rights to the BBL are to go to market where it has been expected to earn up to A$40 million (approx US$30.21 million) more per tournament for Cricket Australia, Ten announced on Tuesday that it had requested a temporary trade halt on the Australian share market (ASX).
The request was made after the network was informed that two of its major financial backers, Lachlan Murdoch's investment company Illyria and Bruce Gordon's Birketu, don't intend to renew their financing of the company after the December 23 expiry of the current A$200 million (approx US$151.12 million) loan from the Commonwealth Bank. It is an announcement that increases the likelihood of the network going into receivership, jeopardising its ability to bid for the BBL next year and potentially affecting this summer's coverage.
"Over the weekend, Ten received correspondence from financial advisers to Illyria Pty Limited and Birketu Pty Limited, two of the shareholders which guarantee the company's current credit facility," the company said in a statement to the ASX. "That correspondence confirms that those guarantors do not intend to extend or increase their support for the company's credit facilities beyond the term of the current facility, which expires on 23 December 2017.
"Ten's board is considering the position of the company in light of the position being taken by Illyria and Birketu and the range of restructuring and refinancing initiatives it has underway. Pending these determinations over the coming days, Ten considers that its shares will not be able to trade on an informed basis and, accordingly, requests the trading halt."
Ten had warned back in April that uncertainty over its future financing "may cast significant doubt on the group's ability to continue as a going concern" after the network posted a A$232 million (approx US$175.30 million) loss in the first half of the 2016-17 financial year.
Strong television audiences for the BBL and WBBL have been one of the few positives for the network in recent times, following the signing of a deal with CA in 2013 that was worth A$100 million (approx US$151.12 million) over five years. Due in large part to the quality of Ten's coverage, estimates for the next rights round have tipped the BBL's value to rise to as much as A$300 million (approx US$222.68 million) from 2018 to 2023. However, that figure was predicated on consistent competition in the marketplace.
Nine, the longterm international cricket rights holder, has previously expressed an eagerness to bid for "everything" next year, while the pay-television provider Foxtel is also interested in returning to broadcast matches played in Australia, perhaps via a simulcast arrangement where it could share the cost of broadcast rights with a free-to-air network as is the case in the AFL and NRL.
The figure to be raked in from the next broadcast rights deal is among the areas of uncertainty currently at issue in the pay dispute between CA and the Australian Cricketers Association. CA has argued that it wants to break the fixed revenue-percentage model and provide fixed wages for the players as a result of this uncertainty. However, the Australian Cricketers' Association has argued that shared risk is one of the principles of a partnership that has lasted for two decades.
At the same time, CA is currently on the lookout for a new head of the BBL, after its overseer Anthony Everard was promoted to the board's executive management team as the man in charge of events and leagues. The newly-created position merges some of the responsibilities held by former operations chief Mike McKenna and the ex-head of events Chris Loftus-Hills, both of whom are now working for the new Perth stadium.
Ten's trading halt is to last for 48 hours, or until the network's board makes a further announcement about its future.