What's wrong with revenue-sharing, CA?
As someone intricately involved in the formation of the partnership between the Australian Cricketers' Association and Cricket Australia, it surprises me that CA is proposing to end the revenue-sharing player payment model that has brought great benefits to cricket in Australia and the players for nearly 20 years. The justification it has offered for trying to upend the system appears to be without any foundation at all.
Since the first Memorandum of Understanding was signed in 1998 between the newly formed ACA and the Australian Cricket Board (as it was called then), less than a quarter of Total Cricket Revenue has been used to pay male state and national players. The rest of the game's revenue, the overwhelming majority, has been at the governing body's disposal, for administration, game development and whatever else it has deemed necessary to make cricket bigger and better.
I haven't been on the executive of the ACA for 12 years, but have kept a close eye on Australian cricket through my past role as CEO of the Federation of International Cricketers Associations (FICA) and more recently as an interested observer while on cricket committees for the ICC and the MCC.
The ACA has always been committed to ensuring the game stays genuinely healthy, and has always held that the players' percentages should allow plenty of resources to be available to develop the game. The ACA represents the interests of not only the present generation of cricketers, but past and future generations as well.
Without doubt, revenue sharing has underpinned a period of great expansion in Australian cricket, bringing major successes on the field and turning the sport into a multibillion-dollar industry. It has achieved this despite challenging and changing sporting and commercial landscapes.
But now CA wants to get rid of this system because, as it declared, it has "done its job" of making cricketers the best paid team sportspeople in Australia.
There is a fundamental flaw to this logic. The model has not done its job. It is doing its job, and that job is to keep cricket healthy, growing viewership and participation year on year in one of the world's most competitive sporting markets. It's doing its job of keeping players aligned to the establishment when they now have very attractive options to leave and play exclusively for overseas franchises. It's doing its job of motivating experienced players to stay on at domestic level and help usher through new generations so our international teams stay strong. It's doing its job of providing vast resources for CA to use to fund grass-roots programmes and promote the game to new audiences. The job will never be done. It's a work in progress.
The revenue-sharing system has proved its success in many ways, not least by promoting joint responsibility for the game's welfare and building trust between the elite players and administrators. And even if, as CA says, it has made cricketers the best-paid team sportspeople in Australia, wouldn't we want that to continue?
I fear that doing away with this model could unravel years of hard-won trust and gains. While the new proposal includes some big improvements for women players, for whom the only way was up, it seeks to introduce a capped international surplus bonus for Australian-contracted players only, leaving all other first-class cricketers to be locked into a wage.
This is particularly grating for domestic players, as a series of new broadcast-rights contracts are to be signed in the next 18 months, including a new Big Bash League deal that is publicly projected to reap about three times the value of the first deal, signed in 2013. CA has done a great job administering the BBL, but without the players there is no competition. Yet these very players are now being told they no longer should share revenue from the league they have helped build. Understandably they are not happy at all.
I have lived in the US for the past 12 years and seen revenue-sharing at work on much larger scales than in Australian cricket. Each of the major sports here - NFL, NBA, MLB and NHL - uses the model in one way or another; all with percentage allocations to the playing group at a much higher level than the 26% of Australian Cricket Revenue the cricketers get. (Australian Cricket Revenue is the agreed portion of the Total Cricket Revenue out of which players are eligible to be paid.)
Why do they use this model? Because they all know it makes economic sense to keep one of your largest expenses variable. If money comes in, everyone benefits. If it doesn't, everyone shares the hit. CA, in its own submission to the ACA, stated that only 20% of its revenues for the next MoU period have been bedded down. In other words, 80% of its income over the next five years is uncertain. Why wouldn't it want to link player payments to variable income?
The uncertainty of projected revenues was one of the main reasons that the ACB agreed to the introduction of the revenue-sharing model in the first place. It's of massive benefit for them. Ask any business if they would like to make their largest expense variable and I suspect they would jump at the chance. For CA to imply that the shared risk-and-reward ideology is outdated is nonsense. Far from being obsolete, it is more relevant now than perhaps any time in the past 20 years.
Scheduling disputes, unforeseen circumstances and uncertainty around ICC distributions can play havoc with projected revenues, placing CA in danger of not being able to meet other obligations, such as development of the game. In 2008, when the Indian team threatened to go home after the Sydney Test, CA faced a revenue black hole amounting to tens of millions in TV rights.
Uncertainty to do with global issues is a genuine concern. These days we have heightened security challenges and the spectre of terrorism. There is the possibility the international cricket schedule could be affected, leaving Australia in a bind. These are valid and sensible current arguments to keep player expenses in line with the fluctuations of revenue.
To some, it may seem that Australia's cricketers have been on a pretty good wicket. Certainly, there is a level of public perception that the nation's elite players are a privileged bunch, and paid handsomely to do something they love. But the reality is that, for the majority - who don't reach the top - careers are often brief and tenuous, and their pursuit means players miss out on educational and other career opportunities. That's why the option of playing in worldwide T20 competitions instead of committing to traditional establishment cricket is an important factor to consider in this MoU.
The fact is, this will be the first agreement to be formed at a time when players have genuine choices about how they pursue their careers. There is no longer one buyer in the market. Players can head to the Indian Premier League, English cricket, the Caribbean Premier League or wherever else. There must be some players right now around the states thinking: "I'll be better off playing in these satellite tournaments around the world. There's less pressure, I'll get to spend more time with my family and I won't have to put up with this ridiculous scheduling and other associated pressures."
Cricket boards need to tread carefully and think things through. If they're going to come down heavily and walk away from an enduring agreement that has kept relative industrial harmony, they do so with a very high risk of a backlash from players. Which brings us to CA's motive. I believe it simply doesn't want to pay the players more than it suits it. It has a good feel about the value of future rights revenues and will have done its sums on how much would go to the players under the revenue-sharing model.
For the past two decades CA and ACA have built a culture of players and administrators working together to grow the game and share in its success - but now with this success moving to a new level, one party no longer wants to play ball.
The stakes here are high. CA's position threatens to set back by decades the relationship between players and administrators. To change the system so radically, it needs to provide a valid and compelling argument. The onus is on the board, not the players. CA needs to explain why, for 20 years, the revenue-sharing model has worked so successfully and yet now it suddenly can't work. It's a tough one for it because, as far as I can see, there really isn't a valid argument.
Tim May, the former chief executive of the Australian Cricketers Association and FICA, is now the present-players' representative on the ICC Cricket Committee