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USA cricket running afoul of ICC financial protocols

The board has also been stripped off all administrative duties with regards to hosting the 2024 Men's T20 World Cup

USA cricket is facing uncertain times  •  Peter Della Penna

USA cricket is facing uncertain times  •  Peter Della Penna

USA Cricket's worsening administrative situation has led to the organization receiving multiple reprimands from the ICC, including a temporary suspension of funding as well as losing all administrative duties with regards to hosting the 2024 Men's T20 World Cup.
Atul Rai, who was recently named interim board chairman to replace the outgoing Paraag Marathe, following Rai's win in the recent USA Cricket general elections, sent a letter to all stakeholders late Friday evening to highlight the perilous state of affairs ahead of the next USA Cricket Annual General Meeting, which has been announced for October 9.
"I have been engaging with the ICC and Cricket West Indies to start a dialogue on the broader engagement and partnership for USA Cricket with regards to the 2024 World Cup hosting," Rai wrote. "I strongly believe that USA Cricket should be the co-hosts for the World Cup, along with Cricket West Indies."
Though no prior formal statement has been issued by either USA Cricket or Cricket West Indies (CWI) on the matter, multiple sources have stated that a letter was sent by the ICC over the summer to USA Cricket informing them that due to ongoing governance issues, USA Cricket was being stripped of all administrative co-hosting duties for the 2024 Men's T20 World Cup.
However, ICC CEO Geoff Allardice subsequently visited with USA Cricket administrators in California and Texas during the summer to inspect potential venues for use during the event. ESPNcricinfo sources have stated that though all administrative duties in terms of a local organising committee for the event are now being handled solely by CWI, the intention is for a percentage of matches to still be staged on American soil.
Beyond the issue of the 2024 T20 World Cup, USA Cricket has been mired in ongoing issues with regards to their finances and governance. The election which saw Rai return to the board took place after a delay of 17 months. Meanwhile, USA Cricket has been in serious debt ever since the cancellation of three ODIs last December against Ireland, which resulted in a loss of sponsorship and TV revenue that had been anticipated to be received after the matches had been played. However, the fixed logistical costs for staging the series remained even when the matches did not occur, triggering major debt for USA after they lost approximately $250,000 for attempting to stage the matches.
"Soon after assuming the office, we were informed that the Q2 Financial report that was due at the end of June 2022 was never submitted," Rai said in the letter. "In addition, the 2021 audited financial report that was also due on June 30th was not submitted despite several deadline extensions provided by ICC. The report also required the minutes of the 2021 AGM that was never conducted. You may recall that the 2020 AGM was held in May 2021. Consequently, ICC has suspended our 3rd quarter funding for noncompliance."
Rai went on to update members on several other longstanding financial issues which have previously been reported by ESPNcricinfo but have shown little signs of being improved in recent times. These include the contentious issue of player salaries not being paid on time while at the same time the board - under Marathe's control - had approved a $300,000 payment to former CEO Iain Higgins in order to avoid facing legal action. According to Rai, it is not just player salaries but many other administrative staff salaries that have not been paid on a regular basis.
"The current cash flow situation of USA Cricket is critical, as we have defaulted on employee salaries and USA players' salaries," Rai wrote. "In addition, there were more than $200K of pending invoices from previous non-budgeted expenditure that was overdue, and we are planning for them to be paid, having paid a significant portion of it already."
Rai also states that no progress has been made to hire a new CEO to replace Higgins after his resignation in November 2021. Rai cites USA Cricket's ongoing financial issues as a reason why and that until these are resolved, the organization will not be hiring anyone to replace Higgins. It effectively means that Rai will be positioned as the chief decision-maker for USA Cricket going forward.
Another issue raised by Rai is the strained relationship between USA Cricket and ACE, their commercial partner who holds the rights to launch a franchise T20 competition - Major League Cricket - due to begin in 2023. USA Cricket board member Venu Pisike had previously told ESPNcricinfo earlier this year of USA Cricket's dissatisfaction of the initial terms signed by both parties in May 2019, which were then reinforced in April 2021 according to Rai.
As part of that agreement, ACE keeps 95% of all cricket-related commercial revenue - including TV broadcast rights, sponsorship agreements and gate ticket sales - generated for USA Cricket while USA Cricket holds on to 5%. The agreement provides a minimum annual guaranteed payment to USA Cricket from ACE - listed at $399,000 for 2022. It means USA Cricket would need to generate $8 million in revenue for the calendar year before they would receive anything beyond the minimum $399,000 disbursement guaranteed by ACE.
USA Cricket had issued a press release in the days after Pisike's statements were made to ESPNCricinfo in May 2022, refuting Pisike's words and claiming that they were his own views and did not reflect the views of USA Cricket. However, Rai's letter, which was formally issued through a USA Cricket press release, now reiterates the position espoused by Pisike that USA Cricket is unhappy with the current arrangement and wants to renegotiate the ACE contract. This is in spite of the fact that both Rai and Pisike voted in favor of the original May 2019 agreement - Rai previously served on the board from August 2018 to February 2020 - when it was initially presented the board three years ago.
"Mr Paraag Marathe, who was the chair then, informed the board that this was a temporary agreement and that it was going to be fixed soon," Rai wrote. "Unfortunately, that never materialised. In April 2022, USA Cricket sent a notice to ACE asking clarifications on their investments and practices, and at this time, a long form agreement is pending, and we will work towards a long form contract that is fair to USA Cricket and works for all parties."

Peter Della Penna is ESPNcricinfo's USA correspondent @PeterDellaPenna