At a time when international cricket is preparing for another showpiece of its game with the Champions Trophy in England, an interesting battle of some significance is being fought out in Australia.
Debate over a new Memorandum of Understanding between Cricket Australia and its players, represented by the Australian Cricketers’ Association (ACA), has seen industrial relations, because that is what they are, reaching a stretching point with some players suggesting Australia might not have a team to play in the Ashes in a couple of months.
Cricket Australia wants to end the revenue-sharing model that has been around for nearly 20 years. But it hasn’t made its point in the most conciliatory of circumstances.
Not surprisingly, the players have dug their heels in.
Cricket Australia has revealed itself to be little changed from the intractable organisation that got itself into so much trouble during the Packer Affair. But those days are gone as the introduction of the ACA has changed the environment forever.
At a time when sports rights, sports funding and sports coverage is undergoing some of the greatest upheaval in its history, surfing the wave of digital change, it is only going to take the advance of Amazon, yes the bookselling website, Netflix or some other streaming mechanism on the internet, to hurl a big fat tomcat into proceedings by bidding for rights to change the financial model even more.
In the Australian situation the players have to be careful when using television rights as the basis for their demands.
It’s worth remembering that in the transformation that is occurring in coverage of sports, ESPN in the United States in 2017 was in 12 million fewer homes than in 2011. They demonstrated the impact on their operation by making more that 100 workers redundant last month.
People are demanding a ‘pay only for what you want to watch’ model rather than the subscription fee revenue model.
What is even more significant in Australia is that the main rights are still held by free-to-air networks, most notably Channel 9 for internationals and Channel 7 for the Big Bash.
But if the coverage battle pans out as it is heading in the USA, and why should that not be used as the base because it has set the trends for many years, is that sports are taking ownership of their own coverage.
That is clearly something Cricket Australia would like to have within its grasp in the future.
However, under the digital approach it is expected rights fees will drop and as an example one lawyer in the US familiar with the negotiations process said from when ESPN last negotiated the NBA contract the deal done now would be worth 30 percent less!
And just in case you think it won’t happen too quickly, that deal was made only 16 months ago. That’s a 30 percent drop in just over a year!
If revenues fall, the sports bodies will look to reduce their labour costs.
It could be that by bringing streaming rights under their own banner, and that is probably where it is going to end up, Cricket Australia would stand to make considerably more than it does from the rights. But it will have to have the technical support to accomplish that.
That would possibly see it employing off-contract television crews from the major networks to produce their coverage. Such a scheme brings increased costs and depending on whether the advertising agencies buy into the concept, it might have to be all paid for from streaming fees.
While it is hard to imagine loyal Australian cricket fans not buying into streaming coverage, it can only be wondered what happens when interest wanes, especially if the national team is not performing well. In other words the payment system, to work at its maximum, demands success.
It may be that due to its existing contracts Cricket Australia is not prepared to discuss these options for fear of the implications with its broadcast partners. But it would appear sensible for some form of common ground to be established before the June 30 deadline that Cricket Australia has put in place.