Cricket South Africa will take a huge financial hit on T20 league

Embattled Cricket South Africa (CSA) will suffer a frightening R342 million net loss just to ensure its new T20 Global League goes ahead next month.

Acting chief executive Thabang Moroe – installed in the role after Haroon Lorgat quit last week – looked visibly weary after revealing this startling figure on Friday as fears grow over the long term viability of the tournament.

Also read: CSA will pull off T20 Global League without me, says Lorgat

To put that into perspective, it’s more than half of CSA’s R655 million cash reserves as per their annual report.

With Lorgat’s alleged inflexible negotiation tactics with broadcasters leading to no TV rights deal being in place, it’s also expected that this income stream will be significantly less than previously budgeted.

“The numbers have changed over the past six months but not as drastically as has been reported,” said Moroe.

“Initially, we were looking at a total net revenue of R32 million coming from TV rights and central sponsorship streams. At the moment, it will be in the 20s. We have cut down but it’s not going to let the quality of the tournament wane.”

CSA need at least R247 million from the whole broadcasting rights pool to keep the tournament afloat.

Owners of the franchises will also be affected as some of the bigger teams, based in Gauteng and Cape Town, can expect to make a loss of approximately R21 million.

In fact, they’re only projected to break even by the third year.

CSA will also “absorb” some of the losses that will be made by their local members, who have to host the private franchises.

“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,” said Moroe.

Despite the gloomy outlook, it’s actually normal that a tournament of this magnitude won’t be profitable immediately but the numbers are nonetheless concerning.

Moroe also defended CSA’s business plan.

Also read: CSA avoids T20 Global League meltdown with last gasp TV deal

“Our model is pretty watertight, it’s now just a matter of making sure that we deliver operationally,” he said.

Given how the longstanding tension between Lorgat and the board affected CSA’s numbers, questions are now also being asked over whether the board took too long to take action.

But president Chris Nenzani was defiant.

“I think the board has acted in a manner that is reasonable. Whether it should have acted sooner or later is a matter of conjecture. That the numbers might have declined, we cannot attribute that to the fact that the board has not acted as soon as might have been expected,” he said.

“We needed to respond to the reality on the ground.”

Moroe reiterated all team owners are still “fully committed” to the tournament.