I’m Dirty Cash, The One Thing You Asked For
I have some really bad news for all you cricket lovers out there. The Hundred is already a success. Whether the game is a total farce, whether the promised stars fail to turn up, whether the teams gain no groundswell of support and whether the promised Mums and Kids ™ show up, it’s a success. Why?
Because the ECB get to define success, and that will be in cash terms, and cash terms only, no matter what they say. When they got Sky to bankroll the game for another four years.
Tom Harrison, the chief executive of the England and Wales Cricket Board, has heralded its £1.1bn broadcast deal with Sky and the BBC as a “game-changer” for the sport and one that, in an era of increasing player power, will mean professionals are better paid than ever before.
The ECB on Friday announced a five-year deal to run from 2020 to 2024, with Sky having beaten off competition from its subscription rival BT Sport to retain rights to all international and domestic cricket in England but with 10 matches from the ECB’s new Twenty20 competition and two men’s international Twenty20s to also be screened on the BBC.
This combined £220m-a-year deal is worth nearly three times the £75m Sky now pays for its exclusive rights, with the new free-to-air element representing a tacit admission by the ECB the subscription-only model in place since 2006 has shrunk the sport’s place both in the national conversation and in terms of grassroots participation.
Let’s put that TV contract into some sort of context. The previous TV deal was for £75m per year. Let us be totally charitable and say that as this cycle includes two Ashes series, and with some price inflation, the bid price had added 40%. Let’s say the market worth based on present earnings, with inflation, would be around £120m per year. That means the worth, per year, on a totting up basis, for the new competition is £100m a year. That is more than the current total income from TV revenue in a year. Tests, ODIs, T20 internationals, Blast, Royal London, Women’s international cricket, Kia Super League and anything else I’ve missed. That is 125% the revenue the game currently earns. And you know who pays for that?
We do. Of course we do.
So in the short term, the Hundred is bought and paid for, counties might see some extra money, as the Guardian excerpt shows above, so do the players (oh very much so), and the international cricketer will be very wealthy under the new scheme. SO when it launches the Hundred has bought cricketers and some parts of the establishment five seasons to save the game.
Sky is under new ownership now, since this contract was struck, and Comcast are no-one’s fools. They may come to the conclusion that cricket does not justify £220m a year in 2024, and will decide to put in a reduced bid. There may not be competition. BT Sport is withdrawing from a lot of sport, and shareholders are questioning why they are in the loss-making sports rights game, and aren’t pleased with how much they are paying for the Champions League. If a five-year billion quid package from the Champions League came up, as opposed to one of the same for cricket, and there was no competition, what would you choose as a businessman?
The very essence of sport is competition. Then, by its very nature competition, when at its finest and tensest, is entertainment. For me sport is all about the story, and the build up to a tense conclusion, for the best entertainment. In football, given goals are relatively scarce, a two goal lead is never safe, one less so, so despite the wretchedness of what went before, the conclusion can be remembered. That’s sport as entertainment in its purest form. If that coalesces with an “occasion” to bring out a classic, then it goes down in legend. I’m thinking Champions League Final, 1999, as a good example. Edgbaston 2005 as another.
Entertainment is seen to mean money. The more entertaining, the more people might want to watch, the more it might attract new viewers, or so the story goes. The biggest revenue spinning sport in the USA is the NFL. It dwarfs everything, it has, pretty much an appointment to view (with several live games scattered either side of the core Sunday afternoon suite of games) and the players have exceedingly short careers. The NFL salary cap, per team, is around $177m. Each team receives $255m from TV contracts per year, split evenly. That was up from $150m in the previous contract. The highest paid player in the NFL is, at time of writing, is Aaron Rodgers, receiving $33m per year in salary. With bonuses and endorsements, he gets up to around $76m.
Clearly cricket isn’t in that ballpark, but what do Green Bay get with that Rodgers contract? 20% of the eligible salary on one player, doesn’t leave a lot to go around for another 45. He’s also injury prone in a violent league. His team collapsed this year. But it doesn’t really matter. Green Bay will still get $255m in TV revenue, massive amounts in merchandise, ticketing and other commercial ventures, and the world will still turn. That’s how franchise sport works. It’s a business decision.
It’s more extreme in baseball. There are parallels. A sport supported by an ageing core support, questions over whether the game is too long, controversial propositions regarding pitching clocks, to speed up the pace of a game. But the classic games can go on for hours – a World Series game this year went on for 7 hours and 28 minutes and ended up with a walk-off home run. The game is as entertaining as it always has been, save for one thing.
Another danger with franchise sport in particular, where there is no relegation, is that if you aren’t going to win that year, any money spent is utterly useless. So teams dump the salaries of viable older players onto teams who think they will win, and stockpile younger cheaper players, who are strictly salary controlled into their mid-to-late 20s. The teams have the right to move those players, the players do not have the right to move of their own accord. Those teams will then decide, when the players are free agents whether to fight to retain those players, or let them go to the Yankees, Dodgers, Red Sox et al. In 2018 the Boston Red Sox spent around $240m in salary. The Chicago White Sox spent $77m. In 2015 the Kansas City Royals, a perennial low payer, stockpiled enough talent, married them with a couple of expensive parts, a few cheaper veterans and won the World Series. They are back where they normally reside now, with $141m in payroll and that is likely to decline. The Houston Astros gutted their team in the early 2010s, acquired magnificent talent, won the World Series in 2017, got to the semis in 2018, and are now faced with having to pay those young stars market rates. It’s a big decision. A business decision.
Players often say that money doesn’t motivate them, and that they have short careers. In the NBA, Anthony Davis has said he will not re-sign for the Pelicans when his contract is up, so his team tried to trade him at the deadline (akin to football’s mid-season break). They asked too much, and no deal was done. There is active talk that as the Pelicans will not make the Play-Offs, there’s no point in Davis playing and potentially getting injured. At a college sport level, where the athletes aren’t paid, potential pro players the following year are sitting out lower level Bowl games for the same reason. Business decisions.
This year, in a close NFL game, there was an onside kick in a contest involving the Giants. The ball went near to the Giants’ most valuable asset – either on the field or in the transfer market – and he appeared to choose not to go for it for fear of being clattered. He protested that no-one should question his heart, but there weren’t many who believed he didn’t really give it his all. A Business Decision.
Take football in this country. What is it that counts the most? Winning something, or just being in the Premier League? We all know the answer to that. And please, don’t throw Leicester at me. The reaction of the Premier League big clubs to that was to close the door tighter, and to try to get the big clubs more money in the overseas revenue rights. After all, no-one in the Middle East is buying their football package for Huddersfield v Crystal Palace. So, instead of busting a gut and trying to progress in a cup competition, where you might actually win a trophy by getting lucky on a day or two, and big clubs get knocked out, what do mid-range and lower tier Premier clubs do? Play their reserves. Why? Need to keep their best players available for that mid-table game next week. Business Decision.
So now, you are the head of the ICC. Or the ECB. You see a club like Surrey, or a league like India, get big crowds, big revenues, from a short game in an evening slot. The players like it because the physical factor of short-pitch, aggressive bowling is mitigated by the rules, you have to physically exert yourself for shorter periods, although they may be more intense, and everything is geared to the batsman, so that if a bowler can find the magic elixir to keep himself below 8 an over, he’s valuable. You can rinse and repeat that day in day out in a league format, and at the end, given these are franchises who switch players backwards and forwards, and everything can be sponsored, money flows every day for not a huge amount of effort. Why on earth would you bother hosting a single test match? That takes five days, six and a half hours per, and you still might not get a result. If cricket were taking purely Business Decisions, we wouldn’t have tests at all, no matter how we are convinced how great they are.
Many of you work out there. Five, Six, Seven days a week, 8 hours plus at a time. You are offered more money, for less time, but you will have to work a bit harder in that time. For that we will offer you double your domestic salary, which you get to keep anyway. Are you going to turn that down? Or will you make a Business Decision.
Pay To Play
During the debate over the Hundred, many of the players have been careful in their pronouncements. It’s been left to the usual ex-playing talking heads to show their hands. I will give Harry Gurney one thing – he expressed an opinion and stuck by it. What Harry did is what many pro players do all the time – they conflate their success, in terms of wages, with a sports success. Those of us old enough to remember when the Premier League football started, there were grand messages about how the Premier League players were in solidarity with their lower league colleagues, then played in that league, picked up the massive wages, and left the other clubs behind. Who can blame them? No-one is asking Rory McIlroy to give his money to your local club pro who plays in the regional tournament. No-one is asking Andy Murray to share his wealth with the Challenger Tour events. Sport is a meritocracy, and why shouldn’t the players be the ones to earn the rewards?
I did a little research for this one. It’s interesting.
In the end of year accounts for 2011, the ECB employed 28 players, who were paid £5.6m. In the 2018 accounts, the ECB employed 40 players (this would be accounted for central contracts to women internationals) and paid them £23.9m. The players are most definitely getting their cut of the ECB turnover pot, which in 2011 (not a lucrative international summer in 2010 with Pakistan and West Indies the visitors) was £106m, and in 2018 (with 2017 also not lucrative with Pakistan and South Africa) that was £125.5m. Turnover is not a good base measurement for revenues in cricket. A set of accounts after an India visit, such as 2012 or 2015 yielded £146m and £174.7m. So players should get a cut.
I tell you who else has had a bumper decade – the highest paid admin at the ECB. In the early part of the decade there were two, but since Harrison assumed control of the parish, there is just one. In 2011, the highest paid director took a salary, less pension benefits, of £253k. Tom Harrison, according to the 2018 accounts, took a salary of £605k. Paul Downton’s last salary was £360k. There is no reason to believe that Harrison is going to cure this largesse once the new TV contract is in place. Assuming he stays, after all, the Premier League appears to be still looking for a new head honcho, and he has to be better than the EFL guy, doesn’t he? Tom Harrison, we have been told, sees himself as a little bit of a zealot, if you can be a little bit of one, convinced of his own judgement, sold on his own brilliance, and assured of his own decision-making prowess. Every so often that is revealed in his demeanour. He revelled in being the tough guy sacking Downton, of merging two jobs, and employing Strauss, and hey, standing behind him when THAT decision had to be made. There was no doubt trust between him and Strauss.
But what also emerged was his attitude to the new competition. And his opponents. The media have told us that he has refused, or just not set up, one-to-one discussions or open press conferences with them. The first question anyone should ask Tom is what is the measure of success for this competition. If it’s for some wistful, long-term, you’ll-see-it-when-I’m-long-gone fantasy, then he should be called on it. If it’s something linked to the amount of revenue the game brings in, he should be called on it. If it’s about how it will attract women and children,he should be called on it, and produce his massive evidence to suggest the Blast can’t. And if it is anything else, which I suspect it is – most notably his ego – then he should be called on that too.
What is always lost when the TV contracts are let is that it isn’t Sky paying the money. This increase in contribution from the key stakeholder is recouped in two ways – advertising and subscription fees (let me know if there are any others, like sell-on rights). I refuse to believe there are a mass of businesses flocking to the paywall cricket offering that weren’t before, so while we might see a slight increase – especially if one of the family friendly consequences of the Hundred is an increase in betting on cricket – in the advertising revenue, the bulk of this is going to fall on Sky subscribers. This will be in the form of fewer events shown on Sky Sports, and higher costs to watch it. Sky, of course, are doing both. This year there is no IPL. No Indian international domestic cricket. Two big holes in the Sky Cricket offering. They don’t care a jot about the County Championship despite the online streaming market showing some positive developments last year, but that’s because it’s limited so it is free. No use for Sky. At some point subscribers are going to say enough. I’ve been saying it for a while, and it rode out the financial crisis world well enough, but it’s a big number out of my salary each month, and I cut out the movie channels. If the Hundred flops, isn’t getting big TV revenues, if the BBC screenings don’t create a new vibe, or if the competition becomes exclusive again in 2025, who knows where the revenues go. Harrison is thinking Premier League. I’m thinking Scottish Premiership.
Play to Pay
England does not publish player salaries. There are rumours that the top players derive incomes of around £1m a year if they play across all formats, but they are just that, rumours. Top county players may be on 200k per year, which for some counties is the revenue from the county format. What will happen with the new deal is a money transfer – from your pocket as a cricket fan to their pocket as players. That’s why Gurney is so keen to jump to white ball cricket. As KP said, why wouldn’t you do less and get paid more? For those that know world greatness isn’t going to be their destiny, but there’s a little niche in there to make more cash, why not. Get on the gravy train while you can. This is about keeping players, administrators and TV happy, not the fans who like low revenue, high maintenance sport. As the ECB cast the envious glances at the IPL (remember Stanford, oh please remember Stanford) and Big Bash, the players who might have deserted England for riches stayed (and my, wasn’t one of them thanked for doing so). In the new era, when even Jos Buttler, a white ball behemoth states he really wants to play test cricket, and the greatest white ball batsman of this generation is such a profound respecter of the test game, people can, perhaps, breathe easily. What Gurney is doing isn’t to be disrespected – we didn’t when Rashid did it last year – but it’s his attitude is so forthright that the next generation of players aren’t going to be as wedded to the long game that grates.
Maybe it is because he is telling the truth. It’s a business decision, after all.
I want to expand on this theme a bit in the next couple of posts, purely because I feel like the sporting world is passing me by. Sport was always about enjoyment and, yes, entertainment, but it was always about not knowing the outcome. My years travelling home and away with Millwall brought unexpected surprises and pitfalls. Last weekend I measured the despair of that 95th minute equaliser with play off losses and last minute disasters – then you recall those last minute wins away, the days your team puts it together. What stayed constant, mostly, was 90 minutes plus added on time. With cricket, it’s the game itself that gets changed. In football, money means that a year like 1989, when Millwall finished above Manchester United is now practically impossible. In cricket it means 8 counties get to host a new tournament and 10 don’t, potentially creating a divide that could be avoided if the game believed long-term revenue is about competition and not “big clubs”. It’s a battle I feel is being lost, and with it, my love for sport. When that gets to the tipping point as per paying to watch it, I don’t know. But I found when I stopped going to Millwall, it was a lot, lot easier than I thought. Maybe sports administrators and players might recognise that. But probably not. It’s short-term, and that’s all that matters these days.
I’m not sure this captured all that I wanted to, and it feels like a ramble. I hope it gives some food for thought.
Words… from the heart
Of a sport lover from the start
Now increasingly cash starved and greased
This cow, carved, love of sport…ceased
Sports rights have become like all other asset classes in a world where central bankers can create money out of thin air, and interest rates are kept as close to zero as possible. In essence you have the ideal ingredients for massive bubbles in asset prices. Be it houses, stock markets, art, classic cars, or TV sports rights.
The only thing that can bridge this ever increasing cost of assets is debt. As I understand it Comcast borrowed the money to buy Sky, which added to their already existing commitments puts them over $100 billion in debt. Where does all this end? I have no idea, but we don’t know what the viewing figures for Sky sports channels are. They don’t like to publish that information which suggests it’s pretty low.
At what point is a Sky sports contract too much for the average Joe? £75 per month? £100 per month? How many credit cards are filled up on other stuff before you pull the plug? I’m waffling now, but I find it all deeply depressing. Interesting that BT are reducing their participation in sport.
I wonder how much of the cricket deal is being paid for by football fans again? How many people sign up for cricket only? Not many I bet?
Anyway, I had already decided this will be my last year of Sky. The price has inched up every year. Sometimes it’s the Sky package, sometimes it’s the basic entertainment package. I watch fewer and fewer Football matches, and The Premiership becomes more a circus every year. As it’s an Ashes year, and The World Cup combined I decided to kill two birds with one stone. But once the summer is over that will be it for me. Next years Premier league season will start without my subscription.
As to the BBC, they are now reduced to nothing more than the role of the hare at a greyhound race. Their only purpose if to get the dogs running. A loss leader to push people over to Sky. How the mighty have fallen?
As you say, 16.4 will be a success even if nobody is watching because the money is already guaranteed. It’s the same with business models at Man U. Results on the field are not important to revenue stream. It’s a weird business model where money comes in despite performance on the park. It’s genius if you can sustain it.
Typical test viewing figures are around ~500k.
At around £500 income per viewer is about £250 million.
Of course, the reality is many of those subscribers wouldn’t pay for the year if they weren’t football fans as well. And there’s a question of how many of those viewers were actually subscribers.
So… not looking good…
220 million a year as opposed to 75 million? What will the counties get out of that? And how many international cricket teams can they decimate with the increased amount of money they’ll be getting out of that?
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Just returned home from a few days in India. On Thursday night I was staying in the Taj Mahal hotel in Mumbai, Who should I see but a rather familiar group of people who turned out to be the Delhi Capitals cricket team ahead of their opening game tomorrow. I will confess I don’t recognise all their players by any means but did recognise Ishant Sharma and Shekhar Dhawan. I asked the group for their photo and they didn’t object and pointed out that I was a humble club cricketer looking to wind up my own team mates on our WhatsApp group. Unfortunately I took a dreadful shot and got a deserved slagging down on my group chat.
I did get my revenge as I went into the bar. A few moments later who should arrive, but their coach, Ricky Ponting. He was good enough to oblige and to be honest I was more chuffed at getting a snap of a bona fide test match legend! Didn’t think I would be doing anything cricket related while I was there but strange old world.
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This enormous deal could be the end of long-form cricket simply because if the counties get a decent share, then they can outbid most test-playing countries for players. It’s already started with Yorkshire. If there aren’t enough players for tests then that could die, and seeing as tests are the biggest attraction in this TV deal, once tests have gone, then the money to the counties will dry up too. And that’ll be the end of them.
Before Sophie comes along to put me right, it’s not just Yorkshire! 🙂