ICC members to own majority of the US Twenty20 league? (and other interesting developments)

Bariaga · Oct 6, 2012

From the image of a newspaper article Cricket Holdings America posted on their Facebook page couple hours ago..

[img=http://img40.imagevenue.com/loc237/th_500298123_404162_285406154892840_1357018353_n_122_237lo.jpg]

ICC members and affiliates hold 54% in US T20 league and they will remain majority owners, said Maxwell, a former right-handed Australian batsman who was also the CEO of the Kings XI franchise of the IPL.
"The ICC is supporting this because they realize that if cricket has to grow it has to tap into new markets as the old ones are saturated and the best format to do this is the T20." Maxwell said.
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Other interesting tidbits:
- They have talked to "over 200 top international players and all of whom are very keen on playing in a new market like the US." (might be some exaggeration there)
- The superstars will be paid $1 million for three weeks of work! (in USD? wow! I hope this doesn't become the NASL of cricket.)
- Teams have to include at least 1 local player (the limit seems low but with the current talent level of the US cricketers I didn't expect more than 2 per team anyway.)
- An estimate average price per franchise would be $40 million for 10 years, to be paid 10% a year.

And, from an article on ESPNcricinfo, they are planning to go with artificial pitches.

With the lack of cricketing infrastructure in the United States, spending money to construct new turf wicket stadiums would require significant investment in an unproven market. The league's first season is tentatively set to take place over three to four weeks in June and July of 2013 and the cost to maintain a turf facility if left unused for 11 months could also prove to be expensive and inefficient. Maxwell says artificial pitches are a better option to get the league underway.

"The biggest hurdle to try and stage major cricket matches is the cost and ongoing maintenance of turf pitches," Maxwell said. "For the Twenty20 product where really you're coming to see the ball struck to the boundary as often as possible, the bowlers are given some encouragement, but the main thing is going to be regular bounce and give them player safety and we think that's going to be the best solution for it. The advancement in technology of these things is phenomenal, even in the last five years."
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http://www.espncricinfo.com/usa/content/current/story/585694.html

Bariaga · Oct 11, 2012

I've read a lot of articles over the last 12 months about this upcoming US T20 league but some were confusing with different writers interpreting the words of the top officials differently. A quote on a topic sounded one way one day and different the next in a different article. So it was refreshing to finally see a live interview of the CEO of CHA done by a notable business media company like the Bloomberg.

Here are the plans and expectations (and possibly some hot air), straight from the horses mouth:

http://www.bloomberg.com/video/holl...ll-cricket-in-u-s-62ovEscQTCay4aBROwdKtA.html (video duration: 13:41)

And the full article: http://www.bloomberg.com/news/2012-...-help-to-sell-cricket-franchises-in-u-s-.html

Key points from the interview (for those not being able to watch the video or in case the article disappears):

- Six-team tournament based competition will be held in just one city, New York, in the first year. Lack of proper facilities was a big problem I'm guessing. In year two, 6-8 teams will play in their own markets in a proper league set-up. Unless I misunderstood they plan to move into 8-20,000 seat temporary stadiums in those cities. One such stadium is at the planning stage somewhere in New York. They are studying 3 sites.

- Teams will consist of mostly international players but the main, long-term goal is to raise the skill level of the Americans playing cricket. I guess they do want the US national team to become competitive in world cricket. So over time they plan to include more and more American cricketers to the teams.

- They expect the franchises to sell for $40 million each (yeah .. good luck with that) to be paid over 10 years. Why the steep price? MLS sold its 19th franchise for $40 mil after being in existence for 15 years, and this cricket league wants that kind of money by the 10th year for a league that will have less than 80 games?

- Salary budget will be about $1 mil per team. Each team can have 1-2 stars whose salary would have no ceiling (like the Designated Players in MLS).

- The business model is to be based mostly on TV revenues (national and especially international). I expected this to be the case, as cricket won't likely have much success at the gate (because the action takes place far away from the stand which would be a big hurdle to overcome in a developing market like the US). It's very risky though. I'd prefer they scaled back the operation enough to be able to survive in case the TV revenue goal isn't met. I'm not asking for a semi-pro level league like the rogue American Premier League of 2004 was but $1-2 mil starting payroll seems like asking for trouble.

I did like Neil Maxwell's ending quote about soccer going from a broadcast revenue of $20 mil in the US to $1.5 billion in under two decades. (If cricket can get 1/4th of that someday it will be golden.) "A Journey starts with its first step and we're about to take it".

Bariaga · Oct 12, 2012

Couple more articles ..

According to unconfirmed reports, each team will have 2 marquee players, 4 top tier players, 6 to 7 tier two players and two US developmental players. The $1 million salary cap might work fine. In Australia's Big Bash League, teams had a salary cap of $1 million during the first season and the minimum contract was set at $20,000.
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...
At inception, IPL's ten year central revenue pool was estimated to be $1.1 billion (it was later revised to $1.6 billion). The Sony broadcasting contract with IPL translates to roughly $1 million per match. Broadcast revenue forms the bulk of the IPL central pool.
Assuming US T20 franchises are sold for $30 million to $40 million, math suggests that CHA central pool should be in the range of $500 million to $800 million over a 10-year period if investors target the same ROI. From a broadcast revenue standpoint, the biggest challenge for the US T20 is the short 2-3 week long season compared to the 5-6 week 76 match season at IPL.

The US T20 target revenue from broadcast deals would need to be between $500K and $1 million per match. Viewership numbers for ESPN3's recent ICC T20 World Cup broadcasts may help CHA in their negotiations but a $1 million per match fee puts the US T20 in the same league (pun unintended) as the IPL.
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http://www.dreamcricket.com/dreamcricket/news.hspl?nid=16751&ntid=4

American companies including PepsiCo and Walt Disney's ESPN unit are some of the sport's biggest partners, and the US accounts for 15 per cent of cricket's income, according to the International Cricket Council's global development manager, Tim Anderson. That compares with India's 70 per cent.
The US also draws the second-highest number of visitors to the organisation's website behind India. The sport is followed by 15 million people in the US, according to the ICC.
An earlier attempt to start a competition in the US stalled when the ICC warned countries not to release players for the event because it hadn't been sanctioned by the US board.
The month-long league will have a salary budget of $1 million for 15-member squads, of mainly foreign players. They'll each be able to secure two additional "superstar" players, Maxwell said.
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Read more: http://www.smh.com.au/business/world-business/whole-new-ball-game-as-t20-aims-to-bowl-over-america-20121010-27cvy.html#ixzz294xfOXD0

Bariaga · Nov 4, 2012

CHA hires PR firms in three countries to help sell their plan and the franchises.

The league aims to sell six franchises in major cities across the US for an estimated US$40m each over 10 years. The competition aims to take place in summer 2013 and promises to feature a raft of top international cricketers and significant celebrity involvement.
Cricket Holdings America has hired agencies in the US, UK and India to promote the plans.
Square1 Consulting is handling media in the UK, with agency founder David Bick and former BBC journalist Brian Alexander leading the account. Next Level Media Communications and BrandLink Communications have been brought on board in India and the US respectively.
The new UST20 League aims to tap into the passion for cricket among the US’ large ex-pat communities from countries such as India, Pakistan, England and the Caribbean.
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http://www.prweek.com/uk/news/1154907/cricket-holdings-america-brings-pr-help-launch-t20-us/

My suggestion is to lower the franchise fee first. Cricket has enough fans in this country to have a successful niche league but it's not popular enough (or will be anytime soon) and doesn't have enough games per season to command that kind of money.