The secret agreements that could stop the sale of the Big Bash League

Cricket Australia has been warned against rushing to privatise the Big Bash League by three states, amid revelations of secret agreements around the Twenty20 league’s ownership.

While CA ponders a big offer to lure Indian star Ravichandran Ashwin to play in the tournament this summer, chief executive Todd Greenberg met state CEOs in Brisbane this week to discuss options for raising capital to help secure cricket’s future in Australia.

They did so after the chairs of NSW (John Knox), Queensland (Kirsten Pike) and Victoria (Ross Hepburn) co-signed a letter to CA chair Mike Baird to seek assurances that no decisions about privatisation had already been made, following a Boston Consulting Group report that recommended selling minority stakes in each of the eight clubs along similar lines to the Hundred competition in the UK.

Two sources with knowledge of the confidential discussions confirmed the sending of the letter to CA, which held a board meeting last week. Directors have been discussing the possibilities, implications and risks of privatisation at various times for more than a decade.

Cricket Australia declined to comment on the letter when contacted by this masthead.

Following this week's discussions in Brisbane, Baird and the state chairs are set to meet in person in Melbourne on Monday to be updated on privatisation scenarios for the BBL. A decision one way or the other is expected by the end of the year.

Though Baird and Greenberg have spoken publicly of their interest in exploring privatisation, CA have no ability to do so unilaterally.

This is partly because the central governing body is effectively owned by the six states, meaning that each association has the right to move on directors should they feel that CA is not acting in their best interests.

But specifically in the case of the BBL, the clubs are not CA’s to sell because of agreements struck to lease each team to the states for a period of 30 years, from the competition’s first season in 2011-12 to 2041. There is a 15-year review clause that kicks in next year. Each state association has its own separate lease deal with CA, meaning nothing approaching BCG’s recommendation can take place unless all states agree.

“The chairman [Mike Baird] and I are at pains to point out that this process, this project will only work if it benefits everyone, and when I say everyone, I mean the total circumference of Australian cricket,” Greenberg said last month.

“If there’s opportunities for everyone to thrive and grow from a project like this, then I think it will solve the problems itself. But if clearly we can’t answer that question, then I think the project fails. So we will be very collaborative, as we have been from the start.”

State associations understand and agree with CA's assertion that the BBL can improve, with a goal of becoming the clear number two competition behind the cash-rich Indian Premier League. They also acknowledge the need for both CA and the states to safeguard their balance sheets for the future, especially at a time of growing uncertainty about broadcast rights.

However, there is no consensus yet about how the league should be improved, and the cash balance bolstered, and even whether Australian cricket needs to follow the Hundred by selling stakes in the eight existing clubs. The ECB sold those stakes in part because the vast majority of the game’s counties are in debt, with an array of venues falling into disrepair.

There is concern, particularly, about any move to privatise that might endanger the established calendar presence of the Boxing Day and New Year’s Tests in Melbourne and Sydney – two of the most beloved but also commercially successful events on the Australian sporting calendar, and the envy of most other cricket nations.

Possible expansion clubs in Singapore and New Zealand have also been mooted, with some states interested in the concept of selling multi-million dollar licence fees for the inclusion of those teams.

Doing so would mimic how the VFL/AFL raised cash in the late 1980s and early 1990s by selling licences for the inclusion of teams from Brisbane, Perth and later Adelaide to expand the league and shore up the finances of struggling Melbourne teams.

Greenberg and his fellow CEOs were given a presentation by the Raine Group, the American sports investments firm that oversaw the auction of the eight Hundred clubs by the ECB that raised around $1 billion in capital for English cricket.

“[Cricket] is the second-largest sport in the world, and that alone is interesting,” Raine Group partner Jason Schretter told a sports industry podcast recently. “Despite it being that big in terms of engagement, it’s probably one of the lowest in terms of the commercialisation per fan sport. So the opportunity around cricket is that where there’s engagement there should be commercialisation and there isn’t.”

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