May 16, 2017

A long build-up of bad faith

Before they can talk details, Cricket Australia and the Australian Cricketers Association must end an increasingly toxic cycle and find a way to be able to talk at all

CA chairman David Peever and CEO James Sutherland. Peever has stated that an increase in grass-roots investment and greater equity for women are touchstones for his chairmanship © IDI/Getty Images

In explaining the landscape in which the catastrophic 1994-95 Major League Baseball lockout took place, the columnist George F Will stated that bitterness and suspicion between league owners and the players' union "festered because a number of owners frankly were unreconciled to not just the behaviour of the union but the existence of the union".

The result of that bitterness, and the refusal of either side to back down over the league's insistence on imposing a salary cap, was the loss of the entire post-season for 1994, including the World Series, and part of the following season too. When baseball did resume, after 232 days, the owners were court-ordered to continue under the game's former revenue-sharing arrangement, while players and teams alike slipped enormously in public esteem. The result? Huge declines in attendance, ratings and revenue - estimated to have cost the MLB more than US$700 million.

For 20 years Australian cricket has sailed through without even the faintest whiff of a similar standoff, but now Cricket Australia and the Australian Cricketers' Association stand, as Will put it, at "daggers drawn". Their disagreement over the current fixed-revenue-percentage model - CA wants to get rid of it, the ACA to retain it - is the key technical point at issue. But the inability of either party to communicate effectively with the other is the greater problem, one with roots going back at least five years.

Two key events took place in 2012 to set the scene. First, the most recent MOU was agreed to by CA's chief executive, James Sutherland, and his ACA equivalent, Paul Marsh. In 1998, Sutherland had been, alongside Marsh's predecessor Tim May, the chief architect of a model that ensured players received around 26% of Australian Cricket Revenue each year, divided up between international, state and Big Bash League players.

"We believe that this agreement and its player-payment model strikes a strong balance," Sutherland said of the 2012 model, which added a variable, performance-based component. "Players are well rewarded for playing senior representative cricket within a system that emphasises accountability for performance and ensures the right players are receiving the right payments at the right times."

At the time of that agreement, Sutherland and the CA board chairman, Wally Edwards, were engaged in a project aimed at revolutionising the governance of the game down under, and also its financial model. The board was to move from a hodgepodge of 14 state representatives to an independent body of nine corporate governors. Meanwhile the financial model changed from states each receiving an equal portion of television revenue, balanced by gate receipts in the larger states, to each association receiving a fixed amount, with CA distributing to rest on a strategic basis. The upshot of all this was far more central control and unified strategy in Australian cricket.

CA's AGM in October 2012 heralded the start of the new regime, including the arrival of three independent directors - two of whom were David Peever, the former Rio Tinto managing director in Australia, and Kevin Roberts, former global senior vice-president of Adidas and a Sheffield Shield cricketer for NSW. The new directors were referred to as "captains of industry". Peever held strong industrial-relations views, and had spoken at a mining conference that year in favour of direct engagement between companies and employees, "without the competing agenda of a third party constantly seeking to extend its reach into areas best left to management".

Peever became CA chairman late in 2015, around 18 months after Marsh had decided to quit the ACA to take up the role of chief executive for the AFL Players' Association, following a rapid deterioration in his relationship with Sutherland. In that same year Marsh had been a key consigliere for Sutherland, Edwards and the team performance manager Pat Howard in the decision to replace Mickey Arthur with Darren Lehmann, a former ACA president, as Australia's coach. Over the years, Marsh and Sutherland often played golf together.

Marsh's value in helping CA reach a decision that would reap rich rewards in the home summer of 2013-14 was ignored when an ACA "state of the game" report hit CA desks. As a document it was ignored, even ridiculed, for segments, including a proposal to move the BBL to October. Marsh was rounded on by Sutherland and state CEOs at one of their regular meetings. Marsh, bruised, walked out; he would soon find himself moving to the AFLPA.

What next became clear was that this fracture would not be repaired when Marsh's replacement, Alistair Nicholson, joined the ACA. A former key defender for the Melbourne Football Club, Nicholson had worked at the sports marketing firm Gemba, and had plenty to learn about the intricacies of the cricket landscape when he arrived. The death of Phillip Hughes provided a major initial jolt, but Nicholson's work with Sutherland during that harrowing time did not grow into a relationship. The pair have never interacted outside official channels.

In 2015, Roberts moved from the CA board to join the board's executive management team. He appeared a standout candidate to replace Sutherland as chief executive whenever the incumbent made way. There was an echo of Sutherland's beginnings, too, in Roberts' appointment as the lead MOU negotiator for CA, sidelining Howard.

CA's strategic decision around this time was to create distance from the ACA, while attempting to get closer to the players. Internally and externally the ACA was increasingly characterised as "the opposition". Female players, for a long time ignored financially by both CA and the ACA, were brought into the fold with rapidly improving contracts negotiated directly. Senior male players were courted with the sorts of social occasions never afforded to the ACA - most notably a dinner held by the board last November, at which the national captain Steven Smith and his deputy, David Warner, joined Lehmann and looming pay talks were discussed.

Meanwhile CA's board, management and negotiating team drew up their own pay model for the next five years, breaking up the fixed revenue-sharing model and freezing wages for domestic players. Women were to again be given a pay hike, but only the top male and female players would be entitled to anything above fixed wages.

Unlike in the past, CA viewed their new model, rather than the existing agreement, as the "starting point" for talks. Similarly, the board openly questioned why they were funding the ACA via annual grant, to the tune of around A$4 million.

The pay structure for cricketers on the men's domestic circuit is a major point of contention in the current dispute © Getty Images

Peever has always pushed the increase of grass-roots investment and greater equity for women as the touchstones of his chairmanship, dating back to an interview with the Courier-Mail in November 2015: "I think about the tens of thousands of volunteers who help our game. You don't get the Steve Smiths and Meg Lannings unless you have a strong foundation. You have to keep driving hard at the grass roots." The board's pay offer states that extra money can be found for grass roots, and other areas like the growth of CA's media unit, by breaking up the MOU model.

Things came to a head for the first time last December, during the Gabba Test between Australia and Pakistan. The acrimony centred around the leaking of emails about a pregnancy clause in contracts for women, with the ACA openly questioning the legality of the clause. CA responded by suspending talks until the new year, cutting time from the process while intensifying suspicion and mistrust on both sides.

When they did resume, the two parties continued to talk across, rather than to, each other. CA's formal pay offer added more detail to their original proposal but did not deviate from a path charted long ago in the boardroom at Jolimont. The ACA response likewise did not budge from the players' strong view that a fixed revenue-percentage model must remain.

Impatience at the process was relayed to CA's management, including Sutherland and Roberts, at board and state CEOs' meetings held in Brisbane last week. But the ink had barely dried on the minutes from the board meeting by the time the next escalation began - each effort pushed back by the ACA.

First, Australia's top five players were offered multi-year deals by Howard, something all rejected without a second thought. Secondly, Roberts spoke icily to Nicholson at last Thursday's scheduled meeting between the negotiating teams, reinforcing a "take it or leave it" position. Thirdly, Sutherland's letter to Nicholson offered the threat of unemployment for all players out of contract if the ACA did not cave in before the June 30 deadline. The ACA's recent request for mediation was rebuffed with the contention that "they didn't agree to it in the first place". Tit for tat.

On Sunday, the board director Mark Taylor offered insight into CA's thinking in his other role as a Nine commentator. "It doesn't make business sense for Cricket Australia," he said. "Every time you make money you have to give away a certain percentage of it. The costs of revenue are going up in sport all the time, every sport will say that."

If these acts were intended to cause players to quake, they appear to have done very much the opposite, as attested by Warner. There remains the chance of negotiation, perhaps encouraged by the looming announcement of a pay deal between the AFL and Marsh's AFLPA. But there is also now the possibility of a thoroughly damaging stand-off, in which Australian cricketers fall out of contract and look elsewhere for opportunities, both to play and make commercial deals.

Avoiding further ugliness would require the reversal inside six weeks of a toxic cycle of deteriorating relations that has taken far longer to build up. Those familiar with the poisonous 1994-95 MLB lockout will already be bracing themselves.

Daniel Brettig is an assistant editor at ESPNcricinfo. @danbrettig

Comments have now been closed for this article

  • Izmi on May 20, 2017, 12:09 GMT

    Cricket Australia(CA) and the Australian Cricketers Association(ACA) being at loggerheads doesn't augur very well for Australian cricket. It shouldn't be allowed to continue for too long and has to be sorted out as quickly as possible. Already it has continued for too long and there seems to be no end in sight. The cricketers and Cricket Australia need to respect each other and need to sit down and sort out their differences. Name calling and foul language and cancellation of meetings between the two parties before negotiations have even started proves how far the matter has deteriorated. Cricket is no more a gentleman's game and the greed for money has hijacked and tarnished the game in recent years. While the Aussie cricketers are at loggerheads with CA asking for a fair share of the profits the BCCI is demanding more money from the ICC. CEO Sutherland has held on to the job far too long for 16 long years and needs to sort this out very quickly if he wants to continue.

  • Saifullah Farooqui on May 18, 2017, 7:58 GMT

    It is very sad to see Money is destroying the Most beautiful game of world.

  • Jose on May 18, 2017, 6:48 GMT

    FIDUCIARY Relationship:

    (All info from public sources & personal experience)

    Part 3

    Here are some extracts from public sources.

    A fiduciary duty is the highest standard of care between the 'principal' whose rights/ assets / interests are being managed under extreme trust. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): such that there must be no conflict of duty between fiduciary and principal, and the fiduciary must not profit from his position as a fiduciary (unless the principal consents). The nature of fiduciary obligations differ among jurisdictions.

    In Australia, only proscriptive or negative fiduciary obligations are recognised, (what they shall NOT do) whereas in Canada for example, fiduciaries can come under both proscriptive and prescriptive (what they are expected to do) fiduciary obligations.

    (All info from public sources & personal experience)

    Part 2

    The moment you start equating

  • Jose on May 18, 2017, 6:44 GMT

    FIDUCIARY Relationship:

    (All info from public sources & personal experience)

    Part 2

    The moment you start equating employees with outsiders, you are inviting for trouble. That is the case with normal 'business enterprises' (BE's) In this case, it is far worse.

    In the case of BE's the chairman & CEO are expected maximize the ROI (Return on Investment) of the shareholders. Who are the shareholders, in CA's case. Whose ROI is being maximized by DP & JS? Are they shareholders? No! Howmuch of the 'equity' they had put in? Zilch? Are they "really" employers"? No! Then who are they? Trusties! Trusties of the games. Trusties of the players who play the game. What is the relationship between DP & JS on one side & players on the other? Certainly not "employer & employee"; but "fiduciary", in every sense of the word.

  • Jose on May 18, 2017, 6:42 GMT

    FIDUCIARY Relationship:

    (All info from public sources & personal experience)

    Part 1

    When James Sutherland came to India, during the OZ series, he publicly stated his firm intent to BREAKING UP the fixed revenue-percentage model, which according to him, sits at the core of disagreements with the players' union during the current round of pay MOU negotiations In that context, he paralleled the players with other partners in the game, such as the long-time international television rights holders Channel Nine. He used a statement "A partnership by definition isn't necessarily a share of revenue agreement." That is where he is wrong. He is (willingly or not) mixing up the EXTERNAL stakeholders & INTERNAL ones. Employees, Managers, & even Board Members are internal stakeholders. You just can't equate them with suppliers, wholesalers, retailers & Advertising agencies, dealings with ALL the EXTERNAL ones are 'arms-length' TRANSACTIONS, and not relationship between employer & employee.

  • Terry on May 18, 2017, 6:34 GMT

    I think the early parts of the article sum it up. CA doesn't appear to agree with the concept of a union and wants to isolate the players and deal with them individually. The players quite rightly are resisting and the ones at the very top are refusing to sell their fellow players down the river by cashing in personally. This must come as an enormous shock to the CA leadership that not everyone is a proponent of dog eat dog economics like themselves.

  • heathw9090985 on May 18, 2017, 3:53 GMT

    Good piece by Brettig. Nice to read something worth reporting at the moment! A change from kohli called smith names, smith went and told his mum

  • Sanjay on May 18, 2017, 1:44 GMT

    @Jose_P spot on. Well said Sir.

  • Jose on May 18, 2017, 0:14 GMT

    Whether it is Australian cricket or global cricket, there seems to be two devils hurting the cause of the game.

    One is money. And the way everyone wanting to have a larger slice of the pie.

    The other is a more damaging one.TRUST DEFICIT! It not only impedes your efforts to control the first devil, let alone slay it; but more hurtfully, will linger on and grow like cancer, for very very long time. Unless you accept its existence & surgical removal.

  • Prem on May 17, 2017, 23:53 GMT

    The ACA should first ask it's players to perform first for Australia. With a 0-3 drubbing in Sri Lanka, 0-5 in South Africa, 1-2 v South Africa at home, loss to NZ in NZ in the Chappell-Hadlee and SL at home in the T20s and 1-2 loss to India, the players should be ashamed of their performances first. Certainly Australia was expected to win a lot of those.

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