ICC news March 20, 2017

'New ICC finance model arbitrary, not agreeable'

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Rahul Johri (left) has spelt out the BCCI's objections to the new financial model in an email to the ICC © SLC

The ICC's new constitution will "convert" the nature of the world governing body and "adversely affect" the autonomy of its members, according to the BCCI, one of the strongest opponents of the proposed document.

In a comprehensive communication of its preliminary observations on the proposed ICC constitution, the BCCI said the changes were "vague" and "unclear". The BCCI expanded on its specific reservations and also provided suggestions on various aspects, including the powers of the ICC chairman, membership criteria, the make-up of the board of directors and, in greatest detail, the proposed new financial model.  

"The proposed ICC constitution seeks to convert the ICC from a members' organisation to a supra-national regulator," Rahul Johri, the BCCI CEO wrote in the email, sent on Sunday evening to Iain Higgins, the ICC chief operating officer. "This is a fundamental change in the nature of the ICC that adversely affects the autonomy of its members.

"Further, several of the proposed changes are vague and unclear in their purport and intended operation. Given that one of the stated objectives behind the proposed changes is to bring in clarity and transparency, it is imperative that there is complete clarity on all the proposed changes so that members can properly understand the same before formulating their position thereon."

In his email, a copy of which has been seen by ESPNcricinfo, Johri laid out the BCCI's key observations, which include taking away the vote of the ICC chairman at the board of directors' table (previously used as a tie-breaker), making the membership committee independent and external to the ICC, and reducing the Associate presence on the board from three to one, and including a non-voting former player.

Though these are significant, it is the BCCI's objections to the new financial model that are of most pressing interest. The BCCI called the new model, to replace one put in place by the Big 3 in 2014, "arbitrary" and not "agreeable".

The objections were essentially an expansion on the arguments first presented by Vikram Limaye at the ICC board meeting in February, when the new constitution was adopted in principle. Limaye, a member of the Committee of Administrators (CoA) overseeing BCCI operations currently, was the board's representative at the February meeting and said the BCCI could not accept the financial model because it was not backed by a scientific formula.    

In the new financial model, the BCCI takes the biggest revenue cut among all the boards from the Big Three model. The ICC said it was built on the basis of good faith and equity, but the BCCI said in its communication that any new model would need to be backed by "accepted and articulated principles" of finance, and importantly take into account the Indian board's contribution to the ICC revenues.

"The ICC is seeking to change the existing financial model without having any scientific formula or technical analysis behind the proposed changes. It is a fundamental attribute of any resource allocation system to first collect information and then allocate resources based on the information, priorities and a defined methodology following appropriate principles. The move to propose changes to the existing financial model without carrying out the aforesaid exercise is an arbitrary one."

Under the Big Three model, Full Members received a contribution cost for participating in the ICC events. The percentages were calculated based on the "contribution" of each Full Member to ICC revenues, though the real formula behind the numbers was never revealed. In the new model, as revealed by ESPNcricinfo, the contribution costs was removed and instead a set figure was allocated to each of the 10 Full Members along with two Associates - Ireland and Afghanistan. The ICC publicly said there was no real calculation behind each figure.  

But Limaye in February, and Johri now, pointed out that the ICC could not repeat the same mistake twice. "Since no methodology has been articulated in support of the proposed new financial model, we are unable to evaluate the same on any recognised and/or accepted parameters," Johri wrote. "Any discussion on the proposed new financial model has to be based on clearly articulated and acceptable principles which recognise the relative contribution of BCCI to the revenues of the ICC. For the above reasons, we are not agreeable to the proposed new financial model."

The BCCI went on to question the accounting procedure on which financial models had been based, concerns reported by ESPNcricinfo in February. One of the main issues was the ICC's costs for it events, which had in the 2014 model been fixed but had, in reality, increased and eaten into the revenues handed to members.

"The version of the 2014 model that supposedly reflects the reality ("Revised 2014 Model") is actually a different model altogether and does not present an accurate and comparable picture to members relative to the existing financial model," Johri said in the email. "As per the Revised 2014 Model, the Event Cost/Expenses has been increased to USD 610 million despite the gross revenue remaining at USD 2.5 billion as envisaged under the existing financial model. There is no explanation for this increase in Event Cost/Expenses. We need to understand why this increase in Event Cost/ Expenses has taken place."

The new financial model, along with an amended draft constitution and governance structure, was accepted in principle by the ICC Board during the meeting in February. Seven Full Members voted in favour of the changes which were drafted by a five-member steering committee led by former ICC chairman Shashank Manohar. The BCCI and Sri Lanka Cricket were the only boards to vote against those resolutions while Zimbabwe Cricket abstained. Members were invited to send their observations on the proposals and the matter will be taken up at the next meetings in April. 

But the absence of Manohar, a driving force behind the new constitution, will have an impact on how those meetings go. Manohar resigned abruptly from his post last week, citing "personal reasons". He had met the CoA the evening before his resignation and discussed the financial models with them.

Nagraj Gollapudi is a senior assistant editor at ESPNcricinfo

Comments have now been closed for this article

  •   Chaminda Wickremasuriya on March 23, 2017, 5:26 GMT

    India's resistance is obvious, Sri Lanka's move beats my logic. Can someone help me understand this?

  • Shanti on March 22, 2017, 0:46 GMT

    @johnthekiwi on March 21, 2017, 15:54 GMT

    Your ignorance about PUBLIC Financial models (which governs the governments have to mange the national economies) & PRIVATE financial models (which governs not only Business Entities but also Associations - which ICC is) understandable. It's obvious that is NOT your specialization. BUT projecting that ignorance as distilled wisdom quite appalling. Unless you want to expose your ignorance in front of the whole world. It may not be a bad idea if you attend some evening course on"Sources & Uses Of Finance in Associations". Not bad to know a little more on Public Finance theories and practices too. Good luck.

  • Jagan on March 21, 2017, 22:23 GMT

    To all those who are commenting here saying India contributing 80% of there revenues to ICC is fair, lets make same rule for all the countries. Every full member of ICC should contribute 80% of their revenues to ICC irrespective of their revenues. ICC only spends money on "internationalize the sport" ( that's what all BCCI bashes wants correct) and doesn't return any portion to full members. let's see how many here agree to that? Plz publish

  • Jignes on March 21, 2017, 21:24 GMT

    and also, John, even with your taxation model, have you heard about legal ways of reducing your taxes? just ask any big and successful company.

  •   cricfan32106842 on March 21, 2017, 18:34 GMT

    The death of philanthropy is in full motion. If its only about India investing more and for that ought to get the bigger share of the pie. Then why even brand it as an international sport? Brand it as a profitable business commodity and it should be played only by the 8 elite teams at the moment, and reimburse them according to their contribution, Because I dont think teams like zimbabwe and west indies and many of the upcoming associate nations do not bring much to the table in terms of equity.

  • johnthekiwi on March 21, 2017, 15:54 GMT

    I'm wondering if some people on here are not familiar with taxation. It is pretty simple. The wealthier you are the more tax (total) you pay to subsidize the poorer bloc. India having to pay more total tax is par for the course. It stinks but it is a fact. What I strongly object to is the notion that any 'Full Member' can get back more from ICC coffers than they put in (if other revenues you generate domestically don't supplement the game then frankly you shouldn't be playing as a Full Member). That can't happen. The overage must go in the direction of IRE, SCO, AFG, NEP etc. if people really do want to expand the game. But expanding the game means getting 4 day FC cricket in place. That will never fly in the US so that shouldn't even be in an argument. Setting up a summer time slog league here in a few select markets with an ex-pat population may actually be financially viable but isn't expanding the game. Regardless, I'd rather see ZIM and WI get competitive than add more sides.

  • Jo on March 21, 2017, 15:24 GMT

    one bad element screws up things and escapes

  •   Yakesha Sekar on March 21, 2017, 13:40 GMT

    The concerns raised here are valid and to the Point. The finsnacial model should be scientific and realistic. Administration of Sport in a Country like India involves bigger challenges and come with additional costs. BCCI are asking for a share which is as per the contributions it brings on to the table. If this is difficult to understand, ICC should try running one complete year without India. One full year of "Zero International Events to India". Players representing different boards will be the first one to get affected as the Administrators of These boards would never take a cut. Will this be acceptable to everyone?. One should understand the concerns expressed by others. If India is that much of a concern to the rest, ICC should seriously consider removing India Vs Pakistan matches in ICC Events. Because These matches are featured keeping the financial interests in mind. This would be the first step towards actually being fair.

  • Krishen on March 21, 2017, 13:24 GMT

    The revenue sharing model based on source of revenue is logical.

    The needs for funds for a large country like India are far greater. Any reduction in the revenue could hurt the development of cricket in IND. IND is yet to promote cricket in many of the states.

    Cricket Boards have to function independent of government control and have to manage the development of sport & related infrastructure in their countries.

    Cricketers need to be looked after by a fair payment model during playing days & post retirement by respective cricket boards.

    Adoption & success of Cricket in countries is more dependent on popular support, infrastructure, professional management by respective boards.

    ICC needs to encourage good governance from all cricket boards and not act as a rescuing parent.

    It is time that all cricket boards develop self-financing model through sponsorships etc. rather than merely look for freebies from ICC & other boards.

  • asioop9603848 on March 21, 2017, 12:33 GMT

    I understand Indias want to get a share that represents their input, however one must think about the greater good for the game of cricket. It is a sport we all love but is only considered popular in what 10 nations currently? of these, the state of affairs in ZImbabwe and the West Indies shows that the game may be at threat in these nations. The best thing for the game is to invest in associate nations as well as subsidize struggling full-member nations in order to strengthen cricket in these countries if that means India has to forgo some of its 'fair share' so be it. The Game of Cricket needs to grow we need to see more competitive teams around the world. At this point there is SA, AUS,ENG & India who have consistently been world class since 2000. is that what we want a sport in which only 4 countries are world class and elsewhere the sport in dwindling. what if one day there are 20 countries like that, imagine!!! that is the future for our sport.

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