February 28, 2014

Silly point

The new proposal brought in by three of the Cricket boards, will restructure the International Cricket Council (ICC). 

The world of Cricket has been abuzz with a Draft Proposal brought in by three of the Cricket boards, namely, Board of Control for Cricket in India (BCCI), England and Wales Cricket Board (ECB) and Cricket Australia (CA) with a view to restructure the International Cricket Council (ICC). There has been widespread commentary about how this proposal could harm the world of Cricket with some of the other member boards taking strong positions in opposition to this proposal at the initial stage. What is this proposal? How will it change how international Cricket is managed?


Before understanding the proposal, there is a need to understand what the ICC does. Contrary to popular perception, the ICC is not the body governing international Cricket. Its main tasks include organising the World Cup (50 Overs), World T20 tournaments, administering the Future Tours Programme (FTP) and running an outreach program in the rest of the world (Associate & Affiliate Members) besides appointing international match officials (umpires & referees) who officiate at all One Day Internationals, Test Matches and T20 Internationals.

The ICC does not draft the rules of the game, which is done by the MCC. Thus the ICC is not as ‘controlling’ a body as is the perception. It is constituted by 10 Full Members (which are also Test playing nations) who run the body. There are 37 Associate members & 60 Affiliate members.

The real bone of contention as far as this proposal was concerned was the revenue distribution; revenues which the ICC generates from the World Cup tournaments and also from Umpiring panel sponsorship deals. The ICC has 8 year revenue cycles with the current one being 2007-15. In this 8 year cycle the ICC generated revenues of US$ 1.564 Billion which were then accounted to Full Member Distribution Associate & Affiliate Cost & Distribution ICC Major & Minor Event Cost, ICC Admin. Thus the 10 Full Members received a sum of US$ 52.5 Million from the ICC during the 2007-15 cycle. Now, the three member boards have brought in a proposal that seeks to bring the following changes to ICC.

First, change the structure of the committees that manage the game. Second, Change how the revenues are distributed between the members. Third, Change the FTP regime and let members decide their playing calendars based on bilateral agreements. Fourth, Relegate bottom two rankers to non-Test playing members and allow the winner of the Intercontinental Cup (Associate members championship) to challenge the 8th ranked Test team for a spot in the league of Test playing nations. (This change was dropped later after discussions).

The three member boards that brought in this proposal, the BCCI, ECB & CA argue that the ICC needs to form two committees that will have India, Australia, and England as permanent members and one or two members, nominated by the Executive Board (comprising of all full members, with equal voting rights). These two committees will be recommending committees and their suggestions will then be voted on by the Board. The Big Three argue that the ICC needs to streamline its operations and these three being the largest contributors to the ICC in terms of source of revenue generated and with their expertise in managing Cricket will do a more professional job. In the proposal, they have highlighted how the ICC has not been run professionally. The different events being organised like the Cricket World Cup and Qualification tournament for the Associates & Affiliates have absolutely no synergies and it results in escalated costs. Moreover, since the two committees will be recommending bodies only, therefore no member is left out of decision making as the voting on recommendations will be done by all the members in the board.

The most contentious part of the proposal was changing the revenue distribution model As explained earlier, the ICC distributed surplus revenue between members equally with some money also going to the A&A members for Cricket development. The proposal argued, that this resulted in some members depending upon ICC to solve any financial problems they may encounter rather than trying to develop their local markets. To strengthen this claim they say that India is the source of 80 percent of the revenue that is being generated by all ICC events while the others contribute from 0.1 percent to 5 percent.

The proposal also added a point about meritocracy by linking payment of a contribution cost to the participants depending upon their contribution to the total revenue thereby incentivising the better performers. It was proposed that henceforth revenue distribution would be done by factoring in the administration cost of ICC, the event costs and Distribution/Contribution Cost.

This Distribution Cost will be like a participation fee paid to all the full members who participate in the ICC events. This will be divided on the basis of their contribution to the ICC revenues, their on-ground performance in the last 20 years and contribution to ICC historically. After factoring in all these costs, whatever surplus is left will be split between Full Members and A&As in a 3:1 ratio. This 75 percent surplus to be distributed between Full Members will be split equally.

Thus, a full member will now get a share of revenues from two heads. The Contribution Cost (split on the basis of contribution) and then a part of the 75 percent of the revenue surplus (split equally). With the revenue for the ICC in the 2015-23 cycle expected to touch US$ 2.5 Billion or more, the amount that will be made by each member will be substantially more than the previous cycle. Why did some members protest then? They did so because they were aware of their lack of efforts in developing their local markets. Most members now depend upon money doled out of ICC coffers rather than earning from their own market.

The vehement opposition to this new proposal was an admission of their failure on revenue generation front. In any case the ICC doesn’t run the game. The three boards (which brought the new proposal) wouldn’t be able to influence how other countries ran the game in their own territories. In the past, we have seen that the members have been saddled by unviable test matches or tours, which are then held only because of the FTP regime administered by ICC. It results in dead series with a solitary test match played between two members which neither enthuses Cricket fans, nor the broadcasters/advertisers. The proposal argues that under the recommended structure, no member countries can be forced to play another member except if it is bilaterally agreed between the two. The two will decide bilaterally what the content of those tours ought to be. This will help in weeding out unviable tour programs.

This allows the members to play to their strengths and focus on viable tours only thereby allowing some of the members to focus resources on development of the game.

It is also important to note that India, Australia, England are three countries with a thriving domestic Cricket structure too which has been developed over the years by the three boards. To quote from the proposal, “In short, for Cricket to survive and thrive into the 21st century and beyond, ICC members have to be or become self-sufficient with sustainable investment and growth in their domestic markets.” It’s a risky situation for the game to be in, if 80 percent of the revenue source is in India. India’s early exit from the 2007 World Cup led to a steep fall in viewership and the sponsors weren’t too pleased with that situation.

The restructuring of the ICC was overdue and introduction of meritocracy is a good step, which will stir up the contest. However, the risk that remains is that Test Cricket might take a backseat with only commercial considerations being factored. To assuage these fears the proposal seeks to create a Test Match Fund to help underwrite Test series, which might be financially unviable for host nations.

It has been argued (time and again) that the BCCI is arm-twisting and not focusing on Cricket development in its country. How is asking for a bigger share of the Contribution Cost interfering with its efforts to find new talent in the country or nurturing existing talent? Will Cricket development and nurturing improve if BCCI were to withdraw this proposal? There is no correlation between the two but we do see this argument being made now that India has lost to New Zealand in the current series. The commentary surrounding this proposal avoided studying what the reasons behind or the contents of the proposals were. Instead what we have seen is the usual BCCI bashing which further ignores that this proposal has not been made by BCCI alone but also by Cricket Australia and England Cricket Board.

The proposal should have been analysed on merit alone and the chance to hold all member boards accountable to development of their domestic Cricket structures and markets could not have been missed. Thankfully, wisdom prevailed and the proposal was adopted.

Photo: snapper san

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