Cricket South Africa 2017/18 Annual Report & T20 Tournament

Sport and Recreation

30 October 2018
Chairperson: Ms B Dlulane (ANC)
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Meeting Summary

Cricket South Africa (CSA) presented its annual report for 2017/18, and provided the Committee with details of the new Mzansi Super League (MSL) T20 competition to be launched around the country in November.

CSA said its efforts were focused on two aspects – awareness of cricket, and making the game accessible to all who wanted to play. They had a strategy around excellence in the development of cricket all the way up to the professional ranks. They were proud to say that South African cricket was viewed around the world as a very competitive, and SA had been ranked number one in all three formats of the game. As part of their objectives, they wanted their players to be ranked in the top 10 of the world in terms of bowling and batting. The national women’s team had also done very well, and had been ranked in the top four in the world. They had participated in the World Cup in England last year and reached the final.

CSA said the Mzansi Super League was a response to the need to develop new products, given the changing environment. The new MSL T20 cricket league would appeal to the younger generation, and was truly South African. One of the bold decisions had been to partner with the SABC, with matches to be broadcast live on TV and radio platforms. The competition had six teams that were tagged with the city’s names -- Cape Town Blitz, Durban Heat, Jozi Stars, Nelson Mandela Bay Giants, Paarl Rocks and Tswane Spartans. They hoped to make them global brands. The tournament was also important to retain the talent within South Africa, instead of players moving to other countries.

Members asked for an explanation of the major losses incurred through the aborted Global T20 tournament a year ago. What was the nature of CSA’s current commercial broadcasting rights, and what was its relationship with the South African Broadcasting Corporation (SABC) and SuperSport? What was it doing to promote the game at schools and among the disadvantaged in rural communities? The Committee stressed the need for CSA to improve on its gender representation in the management of cricket entities.

Meeting report

The Chairperson spoke about the inclusivity of transformation, and encouraged the President of Cricket South Africa (CSA) to take seriously the gender issues, and to at least try to have the 50-50 balance which was in now in the constitution of South Africa. She introduced Ms Busisiwe Ndlovu (ANC) from Mpumalanga as the new Committee Member, and also introduced Mr Samkelo Mahlobo as the new Content Advisor.

Mr Chris Nenzani, President: Cricket South Africa introduced members of his delegation. They were Ms Lindiwe Ndziba: Head of Compliance and Company Secretarial; Mr Naasei Appiah: Acting Chief Operating Officer; Mr Beresford Williams: Non-Independent Director; and Mr Thabang Moroe: Chief Executive Officer.

Cricket South Africa: Annual Report

Mr Nenzani said the gender issue did not make CSA comfortable, and was one of the structural issues which the organisation had inherited. One of the transformation issues from the indaba was to broaden the base from which directors were chosen to the board so that it was possible to have equal opportunities for gender representation. In the executive management, there was a need to address these issues, but in the elected positions it became impossible or very difficult, in the sense that they were limited to the position where one could only elect the board. On Saturday they had had a sitting of all the presidents, and one of the issues that had been raised was that they needed to make special efforts to ensure that they reflected the country and its demographics. Gender representation was a human rights issue in society, and he hoped that going forward they would be able to address this matter seriously.

Mr Naasei said CSA focused on two aspects – awareness, and making the game accessible to all who wanted to play. They had a strategy around excellence in the development of cricket all the way up to the professional ranks. They were proud to say that South African cricket was viewed around the world as a very competitive, and SA had been ranked number one in all three formats of the game. During the 2017/18 season, they had hosted India and Australia and played quite well competitively, becoming number one in the world. As part of their objectives, they wanted their players to be ranked in the top 10 of the world in terms of bowling and batting.

The national women’s team had also done very well, and had been ranked in the top four in the world. They had participated in the World Cup in England last year and reached the final. In domestic leagues, they had six franchise teams and they tested their strength and their competitiveness in the manner in which various league players moved up to the Proteas. Last year saw four players rising up the ranks and playing competitively at the international level. At this stage, they were proud and competitive in what they were doing.

Mr Moroe said in 2016/17, CSA they had spent, or invested, R300m in cricket, and this had increased to R340m in 2017/18, because they remained committed to support grassroots cricket.

They had expanded the Africa T20 Cup to include Limpopo and Mpumalanga, which had now been fully recognised as members of CSA. This was in line with CSA’s aim to make them ready for world class cricket, and as well so that they could select provincial cricketers from those two provinces.

Cricket development continued to be a focus for CSA, and in this season they had increased the number of hubs from 51 to 55. An additional 110 players from the hubs and the Regional Performance Centre (RPC) had been exposed to various national weeks, to bring the total to 243.

It was voted as one of the best development programme by the office of the Minister of Sport in the previous year.

He said they had introduced the Regional Performance Centre for the first time, so it was all boys and girls from the hub, and they had selected them to represent a regional centre themselves. For example, in Soweto the hub acts as a regional centre so the boys and girls that were playing in and around the school would get selected to represent the regional centre, and then go on the best of other regional centres, and then be selected to represent the province and finally compete as provinces among themselves in a national week.

SCA had done this specifically to make sure that they had a development pipeline, and that they did not necessarily play the game at the traditional cricket-playing schools. This programme ran concurrently with that of the traditional cricket-playing schools, but they identified this as a programme specifically for them to develop from within their own townships and villages.

CSA continued to invest in the player performance plan, which gave it a close look as well as at the performance players around. They did not just look at a player, but invested in them as far as cricket skills were concerned by just buying them kit and paying for their education. They looked after their well-being. In some instances, they had gone to players’ homes and bought them groceries, or to buy clothing, or to seek psychological help for players if needed. When players have some form of abuse happening at home, the CSA has intervened.

They had paid for educational costs as well, so they tried to cover the whole 360 degrees and had increased their spending by R5m over the next four years. As far as their performance plan was concerned, they continued to improve and tried to put as much money as they could into this plan, because they felt it was going to help them find the boys and girls from townships and rural areas so that they could play for the national team, since cricket was very expensive and difficult to play.

As an organisation, they feel for the young boys and girls who come from the disadvantaged areas and who need this kind of intervention for them to be able to compete at international level, as well as make representative teams. This indicates the kind of expenditure that CSA makes as far as each hub and RPC is concerned, which amounts to as much as R26m per annum. This year they had an expenditure of R28 million, with the extra R2m that they received from the Department of Sport and Recreation (SRSA). However, the figure put to the Committee indicates the amount of money that CSA continues to spend as far as grassroots is concerned. They used a map to indicate the areas CSA covers, indicating that they were not covering much since the establishment of fields or grounds for cricket was pretty expensive, and the upkeep of these premises was a cost that they had to cover on their own.

Mr Moroe added say they were trying to work on their own as Cricket South Africa since they were the number one growing sport in the country the second fastest growing in the world, but unfortunately had not received any help. He hoped to address the governments plan so that they could be supported and could continue to spread their footprint.

There was continued implementation of the CSA operational model to achieve financial sustainability not only for them, but also their members. They also had a stadium operating model to optimise the stadia’s commercial and revenue generating potential. The national team did not play at all the stadiums in the country, and the model was specifically designed to gather as much revenue as they could for international matches for the benefit of their members

The President said there may be a situation where a stadium may not host a match, but financially it would derive a benefit from the neutral venue. In a situation where a stadium would be hosting a match but making a loss in all the matches that have been played, that stadium would continue to run at a loss. However, with this model, CSA could maximise the way they got more money so that even if a stadium did not host a match, at least they could be financially better off than hosting a match and sitting with losses.

CSA had adopted a geo-political alignment as far as their grassroots was concerned, and had the elected chairpersons who would be leading the provinces. In an effort to drive inclusivity at the previous annual general meeting (AGM), they had accepted the Disability Cricket Associations (deaf, blind and intellectually impaired) as ancillary members.  They have been funding both the blind and the intellectually impaired cricket, even though they were not recognised as CSA members. They had now formalised the relationship as much as they could in trying to represent South Africa. The 2017 review report had indicated that SA had improved its rating from 42% in 2016, to 67% in 2017, against the National Transformation Charter, which has a 50% qualification on all dimensions.

He assured the Committee CSA would continue to work hard as far as the Eminent Persons’ Group (EPG) on transformation was concerned. They wanted the schools to paint a better picture, so they continued to engage with the Minister of Basic education. They had taken control of representative teams, but they were not in charge of who the schools picked to play, since this was the area controlled by the Department of Basic Education.

Under transformation, CSA continued to try and improve its brand as far as representative teams were concerned. The new campaign programme continued to work nicely in terms of visibility of the brand. Cricket remained the only sport in the country where there was a diversified following as far as viewership was concerned. CSA had had only one incident of racism reported, and the gentlemen seen fighting had been found to be under the influence of alcohol, and it had not been racism, so CSA was cleared by the SA Police Service (SAPS).

CSA had seen an increase in the profile of women’s cricket which was taking them to the very top. The ladies now get the same treatment given to the men’s national teamThey had engaged in a campaign “#wearemore” for International Cricket Council (ICC) T20 Women’s cricket, just to show that the ladies were far more than just professional cricketers, and South Africans need to do more to support them. However, women’s cricket continues to be uncommercialised globally. Women cricketers in SA were arguably the highest paid in the country, fully professionalised, and all were on permanent contracts. They also want to develop more female administrators and management. CSA hoped to scoop awards at the upcoming awards ceremony hosted by the Ministry of Sports.

They had also introduced a new brand in their stable called the Mzansi Super League (MSL). This T20 league will be the first to be named after six cities, and the entire series will be broadcast live by the South African Broadcasting Corporation (SABC).

As far as brand promotion was concerned, CSA had held its fourth National Transformation Indaba in April 2018, attended by 196 delegates, to reflect on resolutions they had committed to. Not all of the 2013 resolutions had been achieved, but good progress had been made. CSA had adopted new resolutions clustered around three specific categories: governance, professional cricket and amateur cricket. The operations area needed to improve its alignment, and the organisation had to conduct an assessment to address the skills gap and determine the feasibility of centralising.

Professional cricket had to implement a high performance feeder programme to sustain performance in women’s cricket at the national level. Black African players, particularly batsmen, needed development. CSA had a history of developing Black bowlers only. Benchmarks had to be created to increase participation in amateur cricket.  There was a need to develop an integrated schools cricket strategy and to engage with the relevant government authorities.

CSA had resolved to focus on broadcasting income, sponsorship and ICC funding. Global Sports Commerce (GSC) would be its official international commercial and broadcast partner for the next five years. The future tours programme had to be improved, since the money derived from tours was based on which teams were brought to the country.

From 1 May 2018 to 30 April 2022, CSA was forecasting a loss of R654m, so it had to find a breakeven point in the next four years. It needed to ensure additional revenue, and not just cut back its budget, which was why it was developing its own T20 league. The primary focus was to generate new revenue, as well gain government support to help the Association to reach players at the grassroots level.

CSA’s key challenges included securing the future tours programme, with adequate revenue generating potential, as 80% of their revenue came from this. It needed to improve on this to remain sustainable. It had to improve opportunities at all cricket levels, and create adequate facilities and access to cricket in disadvantaged areas, and help its member associations to remain financially viable.

The development of black batsmen remained a priority. In cricket, it was easier to develop a bowler than a batsman. There were rural to urban differences. A batsman in rural areas plays on concrete pitches, but if taken to a grassed pitch the same batsman may be found wanting, but not a bowler.

Mr Appiah presented on the Mzansi Super League (MSL), and emphasised the need to develop new products, given the changing environment. The new MSL T20 cricket league would appeal to the younger generation, and was truly South African. One of the bold decisions had been to partner with the SABC, with matches to be broadcast live on TV and radio platforms. The competition had six teams that were tagged with the city’s names -- Cape Town Blitz, Durban Heat, Jozi Stars, Nelson Mandela Bay Giants, Paarl Rocks and Tswane Spartans. They hoped to make them global brands. The tournament was also important to retain the talent within South Africa, instead of them moving to other countries. It would also provide content to local stadiums with their world class facilities. He expected the MSL to start contributing to revenues in five to ten years.

Mr Moroe said franchise cricket had never made profits for Cricket South Africa. That was why they were developing this league on their own, to generate the profits that they were supposed to get initially when they developed franchise cricket. In the first four years, they expect to see returns. Australia had just reached the breakeven point for the first time last year.

Mr Appiah said there were 120 million TV viewers around the world when India visited South Africa. He said that cities should assist CSA to build the profile of MSL team brands and local heroes through marketing and promotion of the matches.

Discussion

Mr D Bergman (DA) regretted the Minister was not present at the meeting. He raised concerns about the need for transformation in the context of international matches. He sought clarity on what CSA was trying to achieve locally. He asked why CSA was finding it difficult to penetrate the schools system. What was the nature of the commercial broadcasting rights between CSA and GSC? Was there any truth in reports that the Minister had tried to initiate a deal with SuperSport?. He wanted to know if there was a relationship between GSC and Techfront. He also felt that there was no openness and transparency in CSA’s presentations. How much had CSA had spent on the T20 tournament in 2017 and 2018?

Mr T Mhlongo (DA) asked when CSA was planning to have a permanent Chief Operating Officer (COO), and whether the position had been advertised. He wanted to know what the reason for six teams in the MSL was, and whether they had considered any transformation issues. What were the actual reasons for the postponement of the last tournament? Had they held exit interviews for the departed COO?  There was an issue of an interdict on CSA, and he wanted to know more about it. He also questioned the source of funding for players’ performance over the next four years.

Mr S Mmusi (ANC) wanted to check on the amounts spent on investment in the past three years, amounting to about R3m. What was CSA going to do to promote interest in cricket among other groups in the country, taking into account there were issues involving colour, culture and geographical location. Kimberly and Bloemfontein had been excluded from the MSL, and he wondered whether it was going to work. He pointed out that the MSL match on 20 November was the same day the Proteas would be playing in Australia, and said this clash of dates might have a negative effect. He wanted to know about the debacle which had led CSA to spend about R184m.

Mr S Ralegoma (ANC) suggested that CSA should revisit the Memorandum of Understanding (MOU) between the Ministers of Sport and Basic Education. There were structures to look at transformation and the development of sport in that MOU.

Ms B Ndlovu (ANC) asked whether donations were used specifically for grassroots cricket activities, such as the provision of cricket kit.

The Chairperson referred to disadvantaged children, saying cricket kit was expensive, and asked if CSA could assist rural clubs and the disabled. The communities needed to be aware of the facilities that CSA offered.

CSA’s response

Mr Moroe said the “Ram Slam” T20 competition had not realised revenue for CSA, and had cost between R20m and R25m per year to run for the past few years. The current league had not started yet, but R180m in deals had already been signed.

Transformation remained key, and spending had increased from R300m upwards from year to year, but it was difficult to commercialize grassroots cricket. CSA had to continue pressing its sponsors, such as Standard Bank. Momentum was still involved, despite its difficulties. The education fund continued to provide grassroots support.

Although CSA was not disregarding the “male-pale-stale” category of cricket follower, the focus now was on those who were unaware of the game. They engaged with the legends in cricket. They owned the production of matches, not SuperSport or SABC, so those who worked were paid by CSA. The deal between CSA and GSC had been completed. He confirmed that there was a relationship between Global Sports Commerce and Techfront, and others in a conglomerate. He denied that the Minister of Sport had ever tried to make a deal with SuperSport.

Regarding possible litigation, he said lawsuits had been threatened over last year’s postponed T20 league last year. However CSA, had not received one because they realised they had no case.

Cricket in SA was run and controlled by CSA, and it would not relinquish ownership to anyone in the world.  The Future Tours Programme (FTP) made up 80% of the revenue driver, so it needed to be protected. CSA spends an average of R750m per year, and receives R2m from SRSA.

Regarding CSA meetings, he said he could not give a specific figure on how many meetings were attended, but he had attended all of them and chaired them. He had also invited the President of CSA. The COO advertisement would start being published by Tuesday next week.

The reason for the postponement of the launch of the Global T20 (GT20) was that there was no broadcasting, and without a broadcaster, no sponsors would come on board. The GT20 and MSL now own the teams as CSA, and the revenues generated. When profits come, they would be shared by their members. Limpopo, Mpumalanga, North West and Free State could be funded by CSA.

Mr Moroe said cricket was the most diversified sport in the country. Kimberley and Bloemfontein had been excluded from the MSL because they were ranked so low on the scorecard rating which was run by a company contracted by CSA to see which places were the best.

Mr Naasei referred to the loss in 2017/18 of R196m for a full T20 league launch, and said 50% of this had gone to the players from a contractual perspective, as they had been given rights to play and had to be paid. The production of trophies, equipment from overseas and cargo costs had been unavoidable. There had been marketing costs involving the creation of brands. Suppliers and agencies had had to be paid for the work done.

Mr Nenzani responded on the former COO, saying that he was no longer being paid, contrary to most media reports. The COO’s relationship with the CSA board was no longer helping the organisation. The board no longer had confidence in him, and he had agreed. The relationship could not be repaired, and they had relieved him of his position. 

He said the apparent lack of transparency referred to by Mr Bergman was not intentional on the part of CSA, but some ongoing discussions were confidential.

Further discussion

Mr Mhlongo asked about the gender distribution in CSA’s structures. Regarding finances, he was not happy that they responded in percentages, rather than figures. Did CSA have any relationship with South African Airways? Regarding the R194m loss, he asked how the Acting COO could refer to any loss as an asset.

Mr Bergman asked about CSA’s income from commercial broadcasting rights, as well as what came from the investors. He also asked if they were aware of the company which they said was part of the conglomerate that it had lost their appeal.

Mr Mmusi asked if the contract to be signed between the SABC and CSA on the T20 league was going to generate an income or a loss. He thanked CSA for involving the disabled in its programmes.

Mr Moroe said he could not divulge the amount involved in the SABC contract, as per the terms of the agreement. He felt it would be unfair for the SABC, and asked the Chairperson to protect CSA on this. He said currently there was no relationship between SAA and CSA, but they were still trying to develop one.

He said the money spent on the T20 trophy was not a loss but an investment -- losses were like having to pay lawyers etc.

Mr Bergman suggested that a full stadium was better that an empty one, and that CSA should make R1 tickets available for children to fill in.

Chairperson thanked the CSA President for clarifying issues, and said she could not force anyone to declare what was not in accordance with their rules. There was a need for CSA to address the question of fifty-fifty gender representation, since this requirement was part of the country’s sustainable development goals (SDGs), and there was ground to be made up.  

The meeting was adjourned.

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