MUMBAI: Cricket South Africa’s failure to secure a broadcast deal with the continent's dominant sportscaster SuperSport, which cost CSA chief executive Haroon Lorgat his job, means its ambitions Global T20 League will incur a net loss $25 million in its inaugural edition.
The admission was made by CSA's acting CEO Thabang Moroe, who told local media in Bloemfontein, “At the moment we’re looking at a net loss of $25-million (about R342-million). For the big teams - Joburg, Pretoria and Cape Town - you’re looking at a loss of $1.5 million.”
Revenue from television rights and sponsorship has been reduced from what CSA had earlier hoped, Moroe confirmed. “The numbers have changed, not as drastically as has been reported. Initially we were looking at a total net revenue of $32 million as far as broadcast and central sponsorship is concerned. At the moment it will be in its 20s,” he was quoted as saying by ESPNCricinfo.
The broadcast deal was due to be completed on Thursday but is still pending and is expected to fetch CSA between US $17-18 million dollars. The board is also looking to find a title sponsor while reducing costs on everything from the opening and closing ceremony to marketing.
“We have cut down, but it’s not to wane the quality of the tournament. We are making sure our members don’t get hurt the most. As CSA, we have decided to absorb some of the losses that our members would have incurred, but we’re doing so because when we look at our numbers, we’re pretty confident that we can help them regain them in the following year,” Moroe said. “We as CSA and the team owners will still suffer losses. Hopefully, depending on how well we negotiate with all the broadcasters, the team owners will break even in year three. Our model is pretty watertight, it’s now just a matter of making sure that we deliver operationally.”
Cricket SA’s last financial statements, released at its AGM last month, showed it had cash reserves of R655-million ($47.55 million) by the end of April. It announced an anticipated loss of R159 million for the last financial year.
Aside from the costs of running the tournament, there are also costs linked to stadium upgrades, which are estimated at $25.5 million spread over three years.
While it is not all doom and gloom, Lorgat certainly needs to cop blame for over promising on what the T20 league would deliver in its launch phase. Now it's a matter of battening down, and trimming the bells and whistles from what remains a product with potential.