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Volume: 15 Issue: 6
(June 2017)

Keywords:
stand-off australian cricket pay dispute pay dispute between cricket australia (‘c australian cricketers association (‘aca) relating forthcoming expiry memorandum

Jurisdictions:
Australia

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Stand-off in Australian cricket pay dispute

The pay dispute between Cricket Australia (‘CA’) and the Australian Cricketers’ Association (‘ACA’), relating to the forthcoming expiry of the memorandum of understanding (‘MOU’) on 30 June 2017 that established the revenue sharing system within Australian elite cricket player contracts since 1997, centres on the CA’s desire to scrap the revenue sharing model completely and the players’ desire to renegotiate the MOU share of revenue which would include increases in revenue for elite women cricketers. The cricketers have offered mediation, which was rejected by the CA, and rumours have escalated in the media about a possible Ashes boycott by players if the pay dispute is not resolved. If no agreement is reached by 30 June 2017, all of Australia’s elite cricketers - men and women - will be unemployed. ACA Chief Executive Alistair Nicholson published an editorial on 5 June 2017 sharing his thoughts on the dispute. Nicholson explained that despite a successful 20 year partnership with the CA, new edicts have been issued that have shocked players. “It seems like CA is acting as a heavy monopoly taking the players for granted. And placing its own organisational appetites ahead of the best interests of the national pastime.” Nicholson states that the players are offering flexibility on the negotiations on among other things the type of revenue sharing model; the allocation of risk; and how revenues beyond those forecast are allocated. The ACA would also like the current level of grassroots investment to be increased.

“It is clear that the players were not aware of what the likely revenue for the TV rights was going to generate and comparing the income that was to be received by the CA and then the pay increases,” said David Galbally AM QC, Partner at Madgwicks. “The cricketers have obviously taken the view that with such a large increase in revenue, their pay should increase accordingly and they should get a greater ‘slice of the pie.’ This is understandable bearing in mind that without the players there would be no competition but then again, on the other hand, without the TV rights and the broadcasting of the game throughout the world, the players would not have the revenue either.”

The ACA published a statement on its website on 31 March 2017 calling for an independent investigation into the CA’s claims of financial loss in the Big Bash League. Former cricketer Simon Katich, who was quoted in the ACA’s statement, described the financial losses as “either an MOU negotiating tactic or a serious case of mismanagement.” A CA spokesperson issued a response, stating “It is extraordinary for the ACA to suggest that the game has been mismanaged by Cricket Australia, considering players have benefited from the success and growth of the game for the past two decades. CA’s success in running the game has resulted in 63 per cent pay rises for international men and 53 per cent for domestic men over just the past five years. Their criticism suggests they still do not understand that it takes 71% of cricket’s total investment to run elite cricket. It also demonstrates why the current fixed-percentage model is hurting cricket, when the players are guaranteed a quarter of revenue regardless of the costs associated with putting on the game.’’ Under the current MOU Australian cricketers receive a share of the revenue of between 24.5% and 27% depending on a number of factors. 

The ACA has announced that it will launch a Cricketer’s Brand on 1 July 2017, which aims to bring all media, advertising and promotional deals of players within the control of the ACA. Under the new model, the CA would need to go through the ACA to get approval for the use of an image of a player. “When players are threatened with unemployment and when they learn they receive zero per cent of the digital revenue they generate they are naturally concerned,” Nicholson stated at a press gathering to announce the move. “The Cricketers’ Brand has been established to better manage these concerns and those of all affected parties.”

When asked about his thoughts on how the negotiations might play out, Allistar Twigg, Lawyer at Snedden Hall & Gallop, stresses the importance of context. “This is a time of very significant upheaval in sports funding, sports rights and sports coverage. It wasn’t that long ago when the fees from TV rights formed the basis for player demands at the very elite level of most popular sports. But that’s some 10 years ago. It’s becoming obvious that there is a paradigm shift at play in sports revenues. The world is rapidly moving from the free to air and subscription fee revenue model to the ‘pay only for what you watch’ model. This is likely to have a significant effect on sport revenues, which will flow through to clubs and athletes.”

“I consider it most unlikely that no agreement will be reached: the Australian cricketing public would react unkindly to both sides. However, there is not a lot of cricket fixtures planned between now and October, so it would not surprise if the parties did not meet the 30 June deadline. CA could potentially save a significant amount of money, and the ACA seems to view retention of the revenue sharing model as a matter of high principle. At this stage, neither party appears to be prepared to back down first,” concludes Twigg.

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