“The model is not financially viable,” the manager said.
In a working paper put together by the financial manager, domestic cricket is set to face significant cutbacks that will affect the quality of play. And despite this information, Cricket South Africa are forging ahead with the restructuring.
In the same press conference this week in which CSA director of cricket Graeme Smith spoke about the gap widening between the Haves (The Big Three of England, Australia and India) and the Have-Nots (where South Africa now find themselves), he also said the new domestic system approved by the CSA members council is being rolled out and should be operational next season.
But in a working paper prepared for the board, a financial manager has said “the revenue model is not sustainable” and “I cannot foresee a 12 or 14-team first-class affiliate structure being financially viable”.
The working paper says it costs around R12 million a year to run a franchise, excluding player contracts, and to run one of the bigger stadiums costs about R8 million a year. The franchises received R5 million a year from CSA, but as part of the Project 654 cutbacks, there is set to be an 8% decrease in this allowance, plus the grant from the Mzansi Super League is going to be cut from R5 million to just R500,000.
CSA will also give a grant of R435,500 for team operating expenses, but the budget for a franchise team this season shows that they spend R650,000 on clothing and R293,000 on balls alone, as well as vehicle costs of R227,000. The teams will receive a R15,000 hosting fee from CSA per match day, but the working paper points out that hosting a four-day game costs R23,500 per day and a one-day or T20 match costs about R168,000.
“Teams are going to have to find sponsorships of around R8 million to bridge the gap but having limited televised games means current sponsorship revenues are not sustainable.
“The revenue model is not sustainable and retrenchments will have to be considered and our matches will have to go to less expensive venues. We are also seeing a decline in suite sales and in-stadium advertising.”