'Revenue-sharing' remains sticking point

Chief Executive of the Australian Cricketers' Association, Alistair Nicholson, has confirmed that it is Cricket Australia's push to alter the revenue-sharing model employed over the past two decades that has brought negotiations over a new pay deal to a grinding halt.

With the current five-year Memorandum of Understanding between CA and the nation's professional cricketers due to expire on June 30, the ACA has called for the appointment of an independent mediator to try and re-start talks that broke down last month.

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But CA has so far resisted that call, claiming that the ACA had previously declined to accept protocols around the MOU negotiations that included mediation and that the only agreement reached between the two parties was to negotiate in good faith.

In a radio interview Monday morning, Nicholson acknowledged that the ACA's belief that the existing revenue-sharing model is integral to maintaining the successful partnership between CA and the contracted men and women players is the principle reason negotiations have stalled.

CA has proposed an alteration to the existing model – first agreed upon in the landmark 1997 MOU – whereby men's and women's international players share in up to $20 million of surplus revenue generated by the game's elite form, but players at domestic level are granted mandated pay increases.

"That is the main point," Nicholson told Melbourne's RSN927 today.

"Once we break through that key position, the detail underneath – whilst there is a lot of detail – we can work through that.

"They key thing is the revenue-sharing model, and the structure that sits over that.

"But we do have flexibility to negotiate what's underneath that."

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Despite the MOU filling more than 600 pages, none of the 'detail underneath' has been formally discussed and CA Chief Executive James Sutherland cited the ACA's unwillingness to negotiate over proposed changes to the revenue-sharing model as a key reason for the blunt correspondence he sent to Nicholson (and the players) last week.

"A lot of time has been wasted by the ACA and the current MOU expires in less than two months," Sutherland wrote in his letter to Nicholson last Friday.

"The ACA's reluctance to recognise the necessity of change and innovation as circumstances change has become a disappointing and consistent theme.

"The ACA opposed the concept of scheduling the BBL in January, along with the formation of the WBBL in 2015-16, the introduction of day/night Test matches and the inclusion of women in a combined MOU with men."

In their initial MOU proposal, which was rejected by the ACA when the parties last met in late April, CA claimed the existing revenue-sharing model had "served its purpose" and the changes they were advocating better served the 'contemporary needs of the game in 2017 and beyond'.

While the CA proposal offers pay increases to all contracted men's and women's players, and points out that payments to domestic players are effectively funded by $227m ($194m for domestic men's players and $33m for women) generated by international cricket, there are anomalies within the existing revenue model they believe should be addressed.

For example, under the current MOU the payments to state and BBL players who have not received central contracts offered to international representatives grew by 53 per cent from an average of $130,000 per player in 2011-12 to $199,000 five years later.

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Under the modified player payment model proposed by CA, the average payment to domestic men's players would be capped at $211,000 next summer rising to $235,000 in the final year of new MOU (which does not include earnings from other sources such as the Indian Premier League or for CA-related marketing activities that could add up to a further $5,000 per player each year).

"These payments are effectively funded by sharing international cricket financial surpluses," the CA proposal says.

"While CA is proposing to modify the 1990s revenue share model for the 2017 landscape, it is inaccurate to suggest that domestic men no longer share in cricket revenue under the CA proposal.

"Relative to revenue generated per player, CA estimates that domestic men payments are now 1.5-2.5 times higher than the AFL and NRL, even if payments from overseas competitions are excluded.

"The revenue share model saw domestic men payments grow by 53% in the last five years.

"Without changing the 1990s revenue share model, domestic men payments could reach an unviable level that cannot be justified by benchmarks from other sports and would deny increased funding for grassroots cricket."

The ACA has rejected the proposal to change the terms of the existing player payment model, claiming CA's move to share up to $20 million of international cricket revenue (after player payment requirements are met) with international men and women players as "render(ing) male and female domestic cricketers 'second class citizens' by denying them revenue share at a time of unprecedented growth".

"The current CA proposal is not a 'revenue sharing' model but rather a capped 'surplus' bonus scheme that is offered to only 10 per cent of players and excludes domestic cricketers," the ACA says in its response to the CA proposal.

"The effect of ending the 'revenue sharing' model is to change the very nature of the relationship of the players to the administrators.

"The players cease to be partners in the sport, and revert to being employees of the administration.

"Domestic cricketers, who ply their trade in the proving ground of Australian cricket, who have provided the latest injection of Test stars and have driven the highly successful State, BBL and WBBL tournaments become 'second class' employees because they are ineligible for revenue sharing."

The ACA have presented an alternative model under which a new definition of total cricket revenue (which includes money earned by state associations and BBL clubs, as well as direct CA revenue) is shared between CA (55 per cent), male and female contracted players (22.5 per cent) and grassroots cricket (22.5 per cent).

"The revenue share model allows the game to go up and down in regards to the revenues that come in," Nicholson said today.

"If the game (revenue) goes down, the players go down with it. If the game goes up, the players go up with it.

"So we think it's the right model."

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But CA have cited several examples of the game's income that would be included in the proposed ACA model, and distributed under the existing or new revenue sharing arrangements, that they believe should be quarantined given the game's evolution and current priorities.

State associations that derive income from concerts and other events staged at venues they operate would find that – under the new revenue sharing model proposed by the ACA – a share of that money is distributed among contracted players, CA has claimed.

Also included in that total revenue sum are items such as registration fees from the tens of thousands of young cricketers who participate in initiatives such as Milo In2 Cricket and T20 Blast, as well as sponsorship of junior participation programs according to CA's analysis of the model.

"The ACA's proposed definition of revenue puts players in a position where they would take a share of junior registration and sponsorship revenue, rather than the revenue being reinvested to support grassroots cricket communities and grow the game," CA says.

"CA does not believe the ACA proposal accurately represents the desire of players in this regard."