An interesting article in a UK financial publication last week suggested South African cricket’s pride and joy, the SA20, was “facing an uncertain future”.
The article was forwarded to me by a friend and colleague in the knowledge that it would, ordinarily, never have come close to my usual reading list. What did I think?
Such a question makes me nervous. I’m not the only sports journalist for whom a basic spreadsheet is a challenge too far. But I read the article anyway, having just read a few SA20 press releases telling how successful they were continuing to be.
The reason for this “uncertainty”, apparently, was the imminent privatisation of Australia’s Big Bash League, which plans to sell stakes in the eight franchise teams in the next six months.
The author explained that the SA20 was concerned because all six of its own teams were owned by IPL franchises, “many of whom have expressed interest in buying into the Big Bash ahead of an auction that will be run by the Raine Group, the New York-based bank that raised £520m for English cricket last year by selling stakes in the eight Hundred franchises”.
Right. Attention secured. So how does that threaten the SA20? After all, IPL franchises — or many of them — are seeking global domination, so the more teams they can own, the merrier, no?
“While SA20’s medium-term future is secure, as the team owners committed to paying franchise fees for 10 years ahead of the competition’s launch in 2023, the long-term outlook is less clear, as The Hundred and Big Bash are seen as better bets for investors looking for a return,” the article continued.
This is where my own journalistic intuition was kick-started. I may be rubbish with numbers, but I’m alright with concepts and ideas. I trust the evidence of my own eyes, and I’ve travelled extensively, mostly to the major cricket-playing countries of the world, such as England and Australia. I’ve also spoken to many television rights brokers and those in the broadcasting and production businesses.
But as the SA20 pioneers knew from the start, gate receipts are inconsequential in the business model. By far the most important role of large crowds is to convince television viewers that the product is excellent and worth watching.
Though some of the investors in The Hundred have been honest enough to admit there was a degree of “vanity” in their involvement — owning the Lord’s Long Room for a month every year, that sort of thing — they are all businesspeople, so it’s easy to understand that England provides a “better” opportunity for them to make money than South Africa. Australia? Not so much.
The BBL has suffered a few wobbles during its 15-year history, mostly because it expanded beyond the capacity of its market. But now, after some prudent and necessary pruning, it is an excellent and stable product. Crowds at most games are also impressive after a worrying lull three years ago.
But as the SA20 pioneers knew from the start, gate receipts are inconsequential in the business model. By far the most important role of large crowds is to convince television viewers that the product is excellent and worth watching. “Sold-out” signs do that and convince sponsors and advertisers to part with their money. Actual spectators create virtual ones.
The punchline to all this is a slightly banal statement of the obvious: Australia’s time zone is considerably less convenient for the India market than England’s and South Africa’s.
If the power of the Indian market was sufficient to persuade the ICC to schedule matches at 10am and 8pm during the last T20 World Cup, imagine what time games will have to start during the Big Bash to satisfy the market and its IPL owners.
“City AM has also been told that two of Cricket South Africa’s partners, broadcaster SuperSport and Indian businessman Sundar Raman, are considering selling their stakes in the competition,” concluded the article. That’s when the penny dropped, even for a clueless sports hack.
Market values and share prices are influenced by media coverage, and influencers are happy to play the long game. To push your price up, it may be necessary to push someone else’s down. Create a bit of doubt; cause some uncertainty. The SA20 may, indeed, be facing some uncertainty. But I suspect it has nothing to do with a threat posed by the Big Bash League.
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