BCG report details Cricket Australia $90 million financial shortfall
Cricket Australia has been warned of a $90 million shortfall over the coming three years according to reports. The projection by consultants comes amid ongoing speculation as to private investment into the sport.
A strategic roadmap produced by Boston Consulting Group has warned of a $90 million funding black-hole for Cricket Australia over the coming three years, with partial privatisation among the options presented according to reports. However, former PwC director Nick Hockley, who was installed as Cricket Australia’s permanent CEO in June following a period of turmoil, has dismissed concerns about the game’s local sustainability.
“The primary focus of the report was to provide an independent perspective on strategic options to ensure the long term financial sustainability of the game post the pandemic,” Hockley told The Australian, adding that the sports body had $70 million in reserves. “As a sport it is our responsibility to have discussions about the future strategic direction. This week’s meetings have been a constructive part of that process.”
The Age meanwhile, citing multiple sources, has reported that Cricket Australia remains open to private investment, with a meeting taking place earlier this year between the governing body and private equity firm Silver Lake – which is reported to be on the verge of picking up an estimated $130 million 30 percent stake in the Australian soccer A-leagues. According to the Age, BCG outlined a similar proposal for Cricket Australia.
Among the other commonly floated cash injection models for local cricket – a partial sale of the Big Bash League state franchises, or at the other extreme, a stake sold in Cricket Australia’s entire commercial operations – BCG is said to have presented the option of restructuring the BBL as a separate entity and offering up a portion to private investors. That share could be valued at more than $1 billion, an enticing sum in the face of recent shortfalls.
While most commentators seem to think the cricket’s path to private investment is inevitable, and Hockley has left that gate wide open in response to the report, he has also been on the front foot defending the financial position of the sport. The 2020-2021 summer season copped a $50 million hit due to reduced crowds and bio-security costs of Covid-19, while Cricket Australia has been making a significant and successful investment into women’s cricket.
“We’ve got arguably the biggest summer in the sport’s history coming up,” Hockley stated, in reference to the upcoming Ashes tour. “We’ve also invested significantly in growing the game at a community level. If we apply the same level of focus to making sure that cricket is really welcoming to the whole cross-section of society then there’s the opportunity for further growth if we’re engaging culturally diverse Australia.”
“What we’re now working to do is to pull together to build a strategy that’s going to set us on a path to sustainability and make sure we’re insulating the game against any future financial shocks like we’ve just experienced,” he added. “This report gives us a very clear fact base of all the activity, where all the costs are across the network, making sure that we’re directing our investments to those activities which are going to drive the strongest return.”
Meanwhile, as discussions on Australian cricket’s strategic future continue – with BCG’s full five-year strategic plan due shortly – Cricket Australia has appointed former Kearney manager Ankit Mishra as its new General Manager of Strategy & Innovation. More recently an innovation and data enablement and corporate strategy leader at Telstra, Mishra will be now tasked with driving Cricket Australia’s next strategic planning cycle covering 2022 through to 2027.
