States ask Cricket Australia to open financial books

A tense balance of power between Cricket Australia and its state association owners has been exposed in the scramble to save money amid the coronavirus pandemic, with the states pushing for a greater explanation of the board's finances before agreeing to deep cuts in their annual grants.

Bemusement among staff at CA's abrupt turn to drastic salary cuts has been mirrored among the states, which have baulked at proposed reductions to annual grants and asked for more detail of its financial position before accepting cuts that are understood to have grown dramatically deeper in the past week.

As recently as 10 days ago, states were preparing for a reduction in annual grants of around 40% for this year, but that is believed to have grown to deeper multi-year cuts and deferments last week. CA has been attempting to secure a A$200 million line of credit from banks after its chief executive Kevin Roberts told staff that the governing body would be out of cash by the end of August without vast cuts being made.

These changes have not been met kindly by the states, which signed away their direct control over annual distributions from CA in 2012 along with a move from a 14-member representative board to a nine-member independent model. Rather than being directly linked to revenue fluctuations, the states have each received indexed annual grants, something CA can only alter in the event of "material adverse change" in revenue flows.

"As of July 2013 Cricket Australia now receives all gate and signage revenue from international matches and States receive guaranteed revenue (subject to there being no adverse movement in Cricket Australia's projected revenue)," CA's 2013-14 financial statement said. "This has resulted in a simplified model and derisks States against volatile movements in gate revenue due to the timing and duration of matches, weather and the competitiveness of touring teams."

That shift brought with it some years of increasingly centralised decision-making at CA, but in 2018 the Newlands scandal and a subsequent cultural review climaxed with the forced resignation of the CA chairman David Peever after the powerful New South Wales chairman John Knox withdrew his support. Peever's successor Earl Eddings and the chief executive Roberts have worked to improve relationships and communication, but last week's dramatic change of tack has ruffled a lot of feathers.

All states had already taken various cost-saving measures, with the most dramatic coming in South Australia as 23 staff and contractors were cut by the SACA. Others are at varying points of financial distress, but all appear to agree that more haggling is required.

"Queensland Cricket - like all sporting bodies - is keen to return to training and play, although at this stage no one is certain when this will be possible," QC's chief executive Terry Svenson said. "We continue to work closely with Cricket Australia, and given their recent announcements, we know that there are likely to be changes to our organisation if funding distribution agreements were to change. Queensland Cricket continues to plan for several scenarios which might unfold given the uncertainty we are faced with in this disruptive environment."

Senior figures in other states have commented that CA's latest measures "appear to have come from left field" and smack of "unnecessary panic", leaving states "bemused" and "nonplussed". The governing body had already been basing its plans for next summer on a projected loss of 50% of annual revenue.

Urgent discussions between CA, state associations and the Australian Cricketers Association continued over the weekend, after Roberts informed staff on Thursday that all but a handful of employees would be stood down on 20% of their usual pay until July. There are concerns among CA staff that this move is the start of a drastic downsizing of the organisation that will leave huge numbers of cricket employees entirely out of work later this year.

Certainly this was the message being pushed by the former Australian captain and now Fox Sports commentator Adam Gilchrist, a former housemate of Roberts, who told ABC Radio that player wages could be set back more than 20 years by the effects of the coronavirus pandemic.

"Without being aware of any numbers and the financial side of it, I wouldn't be surprised if we go back a decade or two to the level of payment that players get. Even maybe further for a while," Gilchrist said. "It's going to get stripped back, right back. Support staff numbers have to get dragged back. The revenue is going to go down significantly, 50 per cent they [CA] are banking on at the moment and that's an optimistic position I believe. The players will take a whack."

Mark Taylor, the former CA board director who also resigned in 2018, argued that cuts to player pay would need to be dictated by how much cricket is able to played next summer, as they have a fixed revenue percentage share in every MoU signed between CA and the ACA since the late 1990s.

"There will be haircuts, as we've seen from CA staff. Players will be next," Taylor said on Nine. "I also suspect that Cricket Australia and the ACA have been working together on this. I hope they get their heads together and sort out a good solution for the near future. Six months is a long time. It may not be long enough in this pandemic, but it might be long enough to get some cricket in October, which may save Cricket Australia and the players from taking too big a haircut. Nobody has a crystal ball to work out when and how much this will affect cricket."

In terms of forward planning, states are believed to have been planning for the Big Bash League and WBBL teams to be the first programs to return to action next season, the reverse of the traditional rhythm in which state squads and support staff report for pre-season training first, ahead of the Sheffield Shield and one-day cup competitions.