Plateaued rights deal may push cricket into private equity

Plateaued rights deal may push cricket into private equity

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The most recent jumps – from $275 million in 2005 to $590 million in 2013 and then $1.18 billion five years later – were driven largely by the generation of competition beyond the longtime alliance with Nine, first with Ten taking on the Big Bash League, then Foxtel and Seven following up.

However, the prospect of a new deal that offers little or no extra cash on top of the level reached four years ago will only add momentum to a vocal cadre of advocates for privatisation of CA’s commercial wing.

Following three years of ugly public attacks on cricket by its free-to-air broadcaster Seven, the game’s negotiators are dealing with a market that is still competitive but not at the dollar value CA would have preferred to see.

This is a reality drawn even more sharply when contrasted with the massive deals signed this year for the Indian Premier League (US$6 billion over five years) and the ICC’s global events schedule (US$3 billion over four years).

While the BBL has been trending down in audience size since 2016, international cricket has drawn rising viewership over the same period. Test match broadcast audiences had grown by around 40 per cent in four years since the 2017-18 summer, while white ball matches have attracted record subscription numbers to Foxtel and Kayo, raising questions about how many might have watched on FTA.

Privatisation is a prospect that would cause heated national debate, as fundamental as the question of whether current administrators have the right to sell off a piece of a game long considered to be held in public trust.

Under that scenario, CA would perform a carve-out of its entire commercial operation, responsible for broadcast rights, sponsorship and marketing, and likewise sell a portion to private equity for a fee as high as $1 billion.

This would mimic New Zealand Rugby’s recent sale of a stake of its commercial wing to the sports private equity firm Silver Lake for $200 million, in return for 5-8 per cent of the game’s commercial returns over a fixed period.

Such an outcome would take Australian cricket back to the sort of arrangement it existed under for the first 15 years after the World Series Cricket revolution, when Packer’s PBL Marketing held the exclusive commercial rights to the sport until 1994.

Any private equity deal would require the constitutional approval of CA’s state association owners.

CA declined to comment.

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