Australian Cricket Revenue (ACR), which forms the basis for the players salary, has been feared to plunge by almost 50%. This can result in a significant salary cut for the players.
Cricket Australia on Wednesday has told the Australian Cricketers Association that an almost 50 per cent reduction in revenue is feared in 2020-21. Another big hit next year is also not ruled out.
Projections for 2020-21 include accounting for an 80 per cent reduction in gate takings and other impacts on the business, including an estimated $10m in bio security costs and losses through delays to the T20 World Cup.
The ACR, earlier projected at $ 400 mn (A$ 276 mn) in the 2020-21 is now reported to fall by almost 50%. The players will be directly affected by this as their salaries come from the 27.5% share of the ACR.
CA, according to the Australian, has projected three scenarios when the COVID-19 pandemic hit based on a reduction of 50 per cent in revenue. If no action were taken it would end the financial year with a cash deficit of $142 million. But under the current model, which sees grants to states cut by 25 per cent and the same cuts to the broader business, the loss comes in at around half that amount.
There has however been a number of savings due to the standing down of staff and tour cancellations.
CA also missed out on $1.5m in compensation for its players participation in the IPL when that tournament was postponed and says there were further losses around the cancellation of two NZ ODIs due to the lockdown.
CA chief executive Kevin Roberts, however, has argued that despite the cuts the reduction will have “zero impact” on what players receive. The match fees, prize money and the like remain untouched, he said in a statement.
“Given the economic uncertainty caused by the coronavirus pandemic, many organisations are working with scenario plans rather than developing precise financial projections that may need to be updated various times in ever-changing circumstances,” read the statement from Robertosn.
“We face similar challenges in projecting cricket’s revenue, however we wanted to fulfil our obligation to provide the ACA with our outlook for the next two years, along with additional information on various possibilities for that period.
“We are continuing to do everything possible to deliver an exciting 2020-21 cricket season, including the men’s Test series between Australia and India that will see the world’s top two ranked teams face off against each other.
“Our planning for the 2020-21 season also needs to respond to ongoing uncertainty in relation to travel, mass gatherings and economic conditions that mean the season will most likely look quite different to what we are accustomed to.
“It’s important to note the revised revenue projection provided to the ACA will have zero impact on the value of player retainers, match fees, national team performance bonuses or domestic competition prize money in 2020-21 or 2021-22.
“As it stands, the revised revenue projection would impact the amount owing to the players at the end of the five-year MOU agreement in 2022, however we are focused on maximising revenue in the next two years.”
Meanwhile, any cuts in players pool may lead the dispute between the CA and the ACA to court.