The Beginning of the Reckoning

“This is only the beginning of the reckoning. This is only the first sip, the first foretaste of a bitter cup which will be proffered to us year by year unless, by a supreme recovery of moral health … we arise again and take our stand for freedom …”

Winston Churchill uttered these words in the House of Commons in 1938, just a few days after the then British PM, Neville Chamberlain, stepped from plane clutching the now infamous Munich Agreement in his hand with the proud boast that “I have returned … with peace for our time”.

Perhaps we could substitute Chamberlain for Alan Isaac, the ICC Chairman who has just received a draft proposal, hatched in secret by the BCCI, ECB and CA under the auspices of a ‘working group’ of the ICC Finance and Commercial Affairs (FC&A) Committee, a report that seeks to “address the significant challenges to the viability of cricket” for an ICC that has “lost touch with the issues Members face in sustaining the growth of cricket in their markets”.

In return for greater control over the ICC and a greater share of its revenues this already powerful triumvirate assert that their plan will:

  • ensure that “Test cricket remains competitive and relevant”;
  • “re-energise nation versus nation cricket while recognising the permanent place in cricket for certain major domestic events”;
  • make “the financial position of a number of the Full, Associate and Affiliate members sustainable”;
  • ensure a “fair distribution of revenues, recognising the contribution of each member to the ICC both on and off the field”;
  • ensure “sufficient and appropriate support” for Associate and Affiliate members;
  • establish an idealstructure for the ICC; and
  • “streamline bilateral arrangements to ensure relevance to ICC events and the viability of the game in relevant markets”.

You could be forgiven for stretching the earlier historical allusion a little further and think of the institutions and finances of the ICC as a modern day Sudetenland with these three powerful boards as the Axis powers – the more acerbic among you might even be moved to attribute the monikers of Mein Fuhrer, Il Duce and Fimimaro Konoe to their leaders.

Perhaps this goes slightly too far, but it is certainly no exaggeration to say that the final outcome of discussions and negotiations over coming weeks will be of critical import to the game, not just in the immediate future, but likely for decades to come.

At stake is the “democratic character of the … Constitution … First they ask [people] to agree to the establishment of a protective system including taxes … and secondly they ask that the Lords shall be granted not merely the veto they have used so freely over legislation but a hereditary veto over finance as well”.

But, as the speaker Winston Churchill, went on to say over a century ago in a debate over extending the powers of the House of Lords, “it is not merely a question of rejection of the Budget … but the claim of a … Chamber over which you have no control, which may be civil to you if it likes, but which if it chooses to cut up rusty is altogether beyond the reach of your remonstrations … They are matters of vital and striking importance …”

Churchill could just as easily have been commenting on the FC&A draft proposal that, when stripped of its shiny facade, seeks to concentrate the powers and revenues of the ICC into the hands of its authors via the introduction of an all-powerful new Executive Committee (ExCo) and the concept of a Contribution Cost that would be applied against all ICC revenue, essentially providing an exceptionally uneven commission structure to Full members.

The proposed ExCo would consist of a permanent representative from each of the BCCI, ECB and CA together with a representative from one other Full member nation, with the wide remit of being the sole recommendation committee to the ICC Board on all constitutional, personnel, integrity, ethics, development, nomination and revenue distribution matters.

Effectively, proposals from any of the other 8 ICC committees will require ExCo support before they are presented to the Board, consisting as it does of the 10 Full members, 3 Associates, CEO, Vice President and Chair.

It is unclear how the introduction of a committee that effectively concentrates decision making into the hands of just three ICC members and which actively restricts the diversity of voices and opinions heard by the Board remains consistent with the aim of the ‘working group’ in ensuring that “the ICC reverts to being a member-driven organisation; an organisation of the members and for the members”.

Equally baffling is the way in which the FC&A proposal seeks to fulfil its objectives of making ‘the financial position of a number of the Full, Associate and Affiliate members sustainable” and ensuring that Associate and Affiliate members receive “sufficient and appropriate support” by developing and advocating a Contribution Cost model that effectively takes millions of dollars of potential future income away from them and diverts it into the hands of the 3 wealthiest members, in particular the BCCI.

Although it is presented as a mechanism to recognise “the role of each Member in contributing to generating the ICC revenues required to sustain the game” and the “Member’s contribution to the ICC in terms of history and how the members has performed on the field over the past 20 years in both men and women competitions”, in reality it is nothing more than a glorified commission payment based on some mysterious, unseen formula that attributes income to its source in terms of the broadcast rights agreements.

Based on revised, and lower, budgets for ICC administration and event costs, a number of high level  projections are presented in the FC&A proposal, the detailed calculations of which can be found in Attachment 1 ICC.

In my opinion the most likely scenario is that the 2015-2023 rights cycle will deliver the ICC revenues of around $2.5b which represents a 66% increase over the 2007-2015 cycle despite two fewer events being held. Under this scenario, the proposed Contribution Cost model delivers the BCCI a $445.9m windfall compared with the current distribution methodology, while the ECB and CA reap $49.7m and $7.3m respectively.

The remaining 7 Full member nations each receive between $27m to $57m less revenue across this 8 year period under the proposed methodology, although the elimination of member subscriptions would save each between $7.2m to $9.6m. At the same time $200m in total is stripped from Associates and Affiliates, although this is likely partially offset by eliminating member subscriptions ($41m between 2007-15) and compensatory increases to the ICC events budget to fund A&A events ($53.5m funded from distributions between 2007-15).

It is proposed that half of the A&A total will be allocated to the top 6 Associates to accelerate their progress and development. No doubt this will please these nations greatly as it would represent a significant increase to their current level of ICC funding but it is impossible to escape the conclusion the growth and participation in the sport outside of the top 16 nations may be slowed due to lower funding.

The magnitude of the funding gap for each membership category will ultimately depend upon the ICC revenues attained and the scale of the disparities obviously increases in line with higher revenues – I have constructed a complete financial summary in Attachment 2 ICC.

What is clear is that other than redistributing revenue to those that need it least the introduction of the Contribution Cost serves no other ostensible purpose other than to appease the BCCI who have long grumbled about the lack of recognition, and presumably reward, they receive for generating a significant proportion of the revenues in world cricket, both at an ICC and bilateral level.

And what exactly has world cricket gained in return for recognising this special contribution? The answer is even less than they had before with the albeit flawed FTP to be scrapped in favour of bilateral arrangements that provide no assurance that India will even complete full tours of all Full member nations, tours which could offset the loss of ICC revenue distributions or even surpass this figure; no end to the farce of 2 Test series; and the loss of Bangladesh and Zimbabwe from the Test playing ranks.

For a proposal that, in the minds of some commentators, has been a necessary pact with the devil in order to save Test cricket it does very little to achieve that outcome, notwithstanding the creation of a Test Cricket Fund that only takes effect at the uppermost (in my mind) revenue point likely to be achieved in the next cycle, and the creation of a vehicle to enable top ranked Associates, Zimbabwe and Bangladesh to return to the Test ranks via a promotion and relegation system that exempts the Big 3 in perpetuity from the chop.

However, even Churchill was a pragmatist, famously striking deals during times of crisis that would not otherwise be contemplated, and I can’t but help think that this, albeit significantly flawed FC&A proposal, allows an opportunity to create a workable path forward that:

  1. improves the financial stability of a number of Full member nations;
  2. provides a workable and binding FTP calendar that allows for a full programme of Test and ODI bilateral series on a home and away basis;
  3. provides meaningful bilateral Test series with context; and
  4. provides a clear pathway for advancement for the top level of Associate nations

Much of world cricket, whether it likes it or not, is dependent upon the revenues that India brings to the table, both at national and ICC levels, and India is the only nation, blessed as it is with a huge population (bigger than the other 9 Full members combined) and increasing wealth, that could successfully afford to adopt the American sporting model and place primacy on its domestic IPL competition over international contests given its latest bumper profit of approximately $61m USD.

Without the audience that India brings to bilateral contests, particularly in the Test arena, and to ICC contests, I fear that the game will become more unaffordable for an increasing number of nations and the growth of the game could stagnate in both new and existing regions. Already we are seeing many nations prioritise the scheduling of shorter forms of the game over Tests because they generate a greater return, especially when for some, visits by cricket’s Big 3 are either sporadic, truncated or do not happen at all.

The starting point for my way forward is a recognition that, as unpalatable as it may be, real change cannot occur without an accommodation of India’s position regarding revenue re-distribution but this does not require new committees like ExCo that seek to concentrate power in the hands of a few and silence the voices of other members, nor anything more than clearly agreed and monitored budgets and expense management protocols that maximise the return to all members and for which the ICC executive is accountable to the members for.

Clearly any proposal that means a reduction in the current funds received by members cannot be countenanced and on this basis I would propose to apply no Contribution Cost calculation applies to the $1.5b figure, representing as it does the current revenue and funding position. From that point forward I have adopted this methodology, albeit it at a lower and more sensible rate.

Based on the likely ICC revenue figure of $2.5b, the BCCI would now receive additional revenue of $312.1m compared to the current distribution methodology while the ECB and CA would receive $34.7m and $5.1m respectively. Distributions to the remaining 7 Full member nations would fall by between $19.3m to $40.2m (offset by $7.2m to $9.6m in membership fee savings) across this 8 year period, an improved result from the FC&A proposal and one which nonetheless delivers greater overall funding than received at present. Detailed revised calculations are provided in Attachment 3 ICC and Attachment 4 ICC.

In return all nations, including the BCCI, ECB and CA, will need to agree to a contractually binding FTP schedule that provides for home and away series (with a minimum of 3 Tests and 5 ODIs) between all Full members in each 4 year period , with the financial gain provided by consistent and regular tours by the Big 3, and India in particular, allowing the reduced ICC revenue distribution to be offset at worst.

This can only be achieved, using a basic capacity of 6 home Tests per summer, with a maximum of 9 teams and as such I would propose that Zimbabwe lose its full membership and Test status, the two in my mind being intrinsically linked. This 1/10th share of Full member funding should be reallocated equally between seed funding for the Test Cricket Fund prior to the $2.5b revenue threshold and the now top 7 Associates.

I realise this is a radical step but Zimbabwe have not been a competitive nation for almost a decade, have demonstrated for many reasons that they cannot manage their affairs or funding appropriately, and to be brutally honest have limited growth and revenue prospects compared to others based on their unstable political situation, small population and their medium-term economic prospects.

As proposed in the FC&A document, the top 7 Associates will play in an Intercontinental Cup with the top ranked nation earning the opportunity to challenge the 9th placed Test nation for promotion. This will provide a clear and relevant path for advancement of Associates but the outcome of the contest should also be linked to the attainment (or loss) of Full membership rights with no nations exempted – after all if the Big 3, with all the financial resources and infrastructure available to them, cannot avoid what would be a most unlikely relegation then they deserve their fate.

There have been countless pieces written on this proposal since it was unearthed a few days ago, far too many to mention individually, and this is but another. Each contribute to an understanding of today’s cricketing landscape and a rigorous examination of the issues attached to the proposal, but beyond that few offer a concrete way forward that is rooted in the reality of cricket’s present situation.

I have tried to do that here and whether you agree or disagree I would love to hear your thoughts on the matter – at the end of the day we all love the game and want it to prosper, even if we have different ways of achieving that end.

Until next time … that is stumps.

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One thought on “The Beginning of the Reckoning

  1. Pingback: State of Cricket in Pakistan and ICC’s Revamp Strategies through the Big 3 Proposal | Karwa Sach

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