It’s hard to keep up with the number of domestic T20 leagues around the world these days but the number is certainly over 20 – including the State leagues in India, Karnataka and Uttar Pradesh etc. Another was scheduled to start this week but the Euro T20 Slam was stillborn leaving cricket fans in Scotland, Ireland and the Netherlands disappointed.
The same consortium of backers and promoters which started the Canadian Global League was behind the Euro League and, it appears, they have cash flow issues which has left 90 contracted players, including England’s World Cup winning captain, Eoin Morgan, thus far uncompensated.
How do all these leagues make money? Or at least attempt to… What’s the business plan?
No blueprint is the same but there are some fundamental decisions to be made. Will the teams be sold to private owners or retained in-house? Will the host broadcaster be free-to-air or subscription based? And how high will the salary cap be? In other words, how big are the names you want playing in the league…
The six teams in the Canadian League were sold to private owners and the cable broadcaster, TSN, also paid into the league as it is chasing subscribers from north America, mainly from the Asian community. Despite big brand sponsors like Turkish Airlines, Coke and Canada Dry (of course) the huge salary bill has made it impossible to balance the books and four owners are in trouble for either not paying their players or part-paying them.
In Australia the eight Big Bash teams were retained by Cricket Australia while the tournament broadcast rights were sold to free-to-air station, Channel 10, for a knock-down bargain price of A$20 million per year for the first five years. Naturally there was an element of risk for both CA and the network, but It gave both a chance to achieve their objectives.
Cricket Australia spent far more than they earned for the first two or three years, going from door to door (literally!) building a following and using the players themselves to promote the tournament as family-friendly. The advertising budget was also huge, especially in Sydney and Melbourne where the two teams needed to create separate identities.
Channel 10, meanwhile, saw an increasingly healthy return on their own investment as big brands suffered bouts of FOMO and jumped on the bandwagon. By the end of the fifth year the books were healthily balanced, the stadiums were full and…it was time to make serious money!
So CA split the rights between free-to-air Chanel Seven and cable station Fox Sports who now pay A$60 million a year between them. As long as nobody becomes complacent or greedy and the Big Bash continues to evolve, Cricket Australia will remain financially independent and, unlike the rest of the cricket playing world, no longer reliant on revenue from ICC events or tours by India.
The BBL has always had a relatively low salary cap of just over A$1million per team which explains why so few foreign stars feature in it. There is much discussion about increasing it in order to attract players like AB de Villiers to participate.
The Indian Premier League and Pakistan Super League also have privately owned teams and make huge (in the case of the IPL) and healthy (PSL) profits from the advertising revenue given the population size and viewership figures. And the number of extremely wealthy individuals and corporations willing to pay many millions to own a team.
Private ownership is fraught with difficulties and, naturally, means a reduction in profits for the host board, but it also reduces the initial outlay. The Caribbean Premier League is still battling to make ends meet and was recently required to eject the St Lucia Stars team from the tournament for non-payment.
So where does all this leave the Mzansi Super League? Using the cash-strapped SABC as host broadcaster means it has a much higher television audience than if they had partnered with SuperSport (and theoretically higher advertising revenue), but that also means they have to bare the weight of the majority of the costs without the benefit of the $6million SuperSport offered.
There are two options remaining to make the MSL financially viable. The first involves India – or Indian eyeballs, anyway. But to do that, it needs India players. Which is why the BCCI has such a strict moratorium on any cricketer worth the description playing anywhere else in the world other than India.
The final option is sponsorship. Having struggled (and mostly failed) to attract sponsorship for its other domestic competitions (and for Test cricket for that matter) it may be an optimistic business plan. Meanwhile, the bills are mounting – quickly. The salary cap for each of the six teams is R8million so that’s R48 million before a ball is bowled. Add in the TV production and venue costs…it’s no wonder the first edition cost over R80million to stage.
If the gist of the business plan is “build the tournament and the people will come” then that, too, is based more on hope than reality. Still, if that’s all CSA has then they need to give it every last ounce of energy they have.
Questions? Comments? Suggestions? Feel free to get in touch.