CSA slashing team fees to retain T20 Global league franchisees

CSA slashing team fees to retain T20 Global league franchisees-InsideSport

Haroon Lorgat’s exit is having a severe impact on Cricket South Africa’s ambition T-20 Global League plans. CSA is reportedly struggling to keep the league on track. The revenues are not meeting the projections. CSA, the league owner and organiser, is working on slashing the budgets. Franchisee fee too is being reduced to retain the team owners as their economics to run a team will be upset on account of the reduced revenue share from the central pool.

CSA is expected to announce a deal with local broadcaster SuperSport for the South Africa territory in the next few days, while it has failed to secure any broadcast interest from the Indian territory. CSA was expecting a upto $50 million or more for the sub-Saharan broadcast rights. However, the actual deal is reported to be lesser than one-third of the expected numbers.

CSA is now slashing the license fees for franchises, which has initially been fixed at $5m for a Tier One franchise and $3m for the others cities. That is a the only way possible to retain the team owners. The franchisees have been ‘sold the projections’ of major revenues coming from broadcast deals. With CSA now not in a position to match those projected figures, franchisees too will struggle with their operational model.

Absence of an Indian broadcaster will also hit the prospect of getting Indian sponsors, cutting yet another source of franchisees guaranteed revenues. The team owners have little option to reduce their expenditure on player acquisition and team operations. Thus, a reduced franchisees fee is the only head that can keep their balance sheets in an healthy enough to sustain operations.

A local consortium, Brimstone, has already opted out after showing an intention to invest in the Stellenbosch franchise after taking stoke of the weak financial position of the league.

CSA will now is left with no option but to scale down its ambitious project. The board has reportedly also started re-writing the financial model for the league after Lorgat’s unceremonious departure.

CSA will now also be bearing the television production cost – estimated to be $ 100,000 each for all the 57 games.