CSA to suffer massive loss from inaugural T20 Global League
Cricket South Africa hopes to finalise broadcaster for Global T20 League soon. (Source: CSA Twitter) Cricket South Africa hopes to finalise broadcaster for Global T20 League soon. (Source: CSA Twitter)
Cricket South Africa (CSA) will endure a big financial jolt from the inaugural T20 league in the country labelled as the T20 Global League. The expected net losses are to the tune of $25 million – an amount that accounts for more than half its current cash reserves.
As per the 2016-17 financial report submitted by CSA, the board reported a bank balance of $47.8 million by the end of April. But the costs of running the tournament with reduced revenue and stadium upgrades of $25.5 million spread over three years would push the board back as far as the financials are concerned. The costs are much higher than what was inititally expected.
CSA had factored in that it would take at least three seasons before the T20 Global League turned profit, similar to Australia’s Big Bash League, the extent of the losses has come as a surprise. Things could get even worse for South African cricket with the broadcast deal and sponsorship yet to be confirmed.
Even the revenue from television rights and sponsorship has been reduced from what CSA had once hoped, something CEO Thabang Moroe confirmed in Bloemfontein. “The numbers have changed, not as drastically as has been reported. Initially we were looking at a total net revenue of $32 million as far as broadcast and central sponsorship is concerned. At the moment it will be in its 20s,” he was quoted as saying by ESPNCricinfo.
The broadcast deal was due to be completed on Thursday but is still pending and is expected to fetch CSA between US $17 and 18 million dollars. The board is also looking to find a title sponsor while reducing costs on everything from the opening and closing ceremony to marketing.
“We have cut down, but it’s not to wane the quality of the tournament. We are making sure our members don’t get hurt the most. As CSA, we have decided to absorb some of the losses that our members would have incurred, but we’re doing so because when we look at our numbers, we’re pretty confident that we can help them regain them in the following year,” Moroe said. “We as CSA and the team owners will still suffer losses. Hopefully, depending on how well we negotiate with all the broadcasters, the team owners will break even in year three. Our model is pretty watertight, it’s now just a matter of making sure that we deliver operationally.”
In the absence of a broadcast deal for the T20 league, things are held up to find a title sponsor as well. And Monroe understood the seriousness of the situation. “Obviously everything is tied to the broadcast deal,” he said. “When you go and see a sponsor the first thing they ask is, ‘Where is my brand going to be seen?” The league is likely to air on Africa’s biggest sports broadcaster SuperSport – with whom the board has been in negotiations for many months now.
For South Africa, a lot will now depend on the tours from India and Australia so as to pump up the depleted reserves. Ironically, the point of the Global T20 League was to make the country self sufficient and not rely on foreign tours and leagues.
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