Cricket South Africa’s Global T20 League, which was supposed to provide the organisation with financial stability, will incur losses of more than R340-million even before a ball has been struck.
That stunning admission was made by the acting CEO Thabang Moroe yesterday, and is a significant blow to the federation which had hoped that establishing its own T20 franchise competition would protect it against unstable market forces.
“At the moment we’re looking at a net loss of $25-million (about R342-million),” Moroe said. “For the big teams - Joburg, Pretoria and Cape Town - you’re looking at a loss of $1.5-million.”
Cricket SA’s last financial statements, released at its AGM last month, show it has cash reserves of R655-million. It announced an anticipated loss of R159-million for the last financial year.
Cricket SA is still negotiating a broadcast deal with SuperSport but initial hopes of that deal providing a solid economic foundation for the tournament also appear to be scuppered.
“Initially we were looking at a total net revenue of $32-million s far as TV and central sponsorship are concerned. At the moment it will be in its 20s. We have cut down, but not to wane the quality of the tournament. We’re making sure our members are not the ones who get hurt the most.”
The team owners remain on board with assurances from CSA that they will break even on their investment in the tournament’s third year. It is not unusual for events such as the GLT20 to incur losses in the early years - the IPL, Caribbean Premier League and the Big Bash in Australia all suffered initial losses, but the numbers are alarming for CSA given some of the promises made by the ousted CEO Haroon Lorgat.
After a presentation to the ICC in February, and the unveiling of the tournament’s owners at a glitzy event in London, yesterday's announcement is a significant blow to CSA’s reputation.
It also casts Lorgat in a less-than-glowing light following his parting of ways with the organisation. Cricket SA’s president Chris Nenzani acknowledged that Lorgat’s departure wasn’t solely as a result of his failure to secure a broadcast deal.
“The truth is the relationship has broken down as a result of a number of issues. It started very early at the beginning of the year and came to a climax on May 13 at a Board meeting,” said Nenzani, who along with Moroe, held a short meeting with the national team prior to the start of the second Test against Bangladesh, to keep the players abreast of developments.
Reports have emerged of a breakdown in the relationship between Lorgat and CSA’s chief financial officer Nassei Appiah, after it was revealed last week that Appiah had submitted a report pointing to a lack of transformation within the organisation.
Nenzani insisted he’d attempted to mend relations, but to no avail. “Unfortunately that did not materialise. It was a case of ‘Do I trust you, do you trust me to move forward?’ Then you get to a stage where you say ‘no.’ You can try as much as you can but we reached a stage where we said us moving forward ‘is not good for you or for me.’ Can we decide on an exit plan so we rebuild this organisation before it starts hurting?”
Cricket SA are still negotiating an exit package with Lorgat.