Former ICC president Elisan Mani has ripped to shreds the notion of the venal ICC Poition Paper, as proposed by the cricketing boards of India, Australia and England.
This has then resulted in a formal letter of complaint to the ICC; undersigned by Australian Malcolms Speed and Gray, as well as Clive Lloyd amongst others. Like a few things to do with this drama it has been leaked, so here it is. It is a long read, but well worth it.
The paper from the ICC Finance and Commercial Affairs Working Group has been prepared by three members of the ICC, namely, Board of Control for Cricket in India (BCCI), The England and Wales Cricket Board (ECB) and Cricket Australia (CA).
The Paper raises serious governance issues including lack of transparency and conflict of interest.
The authors of the Paper (BCCI, ECB and CA – collectively referred to as the Three Boards) benefit significantly in financial terms from their proposals and promote their own self-interests.
The Directors, President, Chief Executive and management of the ICC have had no role and input in, or knowledge of the preparation of the Paper even though it comes from a working group of the ICC Finance & Commercial Affairs Committee. It also appears that some members of the F&CA Committee were not invited to join in the discussions leading to the Paper and were not even aware of the discussions taking place.
Full Members were summoned to a meeting in Dubai on 9 January 2014 and presented with this Paper. From all accounts it appears that the President and the Full Member directors of the ICC had no prior knowledge of the contents of the Paper and the President had no role in convening the meeting; he was ‘invited’ to the meeting by the BCCI, ECB and CA although it was a meeting of the F&CA working party of his Board. No Associate or Affiliate member director was invited to the meeting.
The directors of the ICC have a fiduciary duty first and foremost to the ICC; they must put the interests of the ICC before the interests of their respective Boards, they must act in good faith to protect and promote the interests of the ICC and avoid conflict of interest.
The Independent Governance Review of the ICC by Lord Woolf and PricewaterhouseCoopers in 2012 (the Woolf Report) observed:
“Members, other stakeholders and the cricketing public in general are entitled to expect the ICC set an example by adopting standards of excellence in its governance. Such standards are essential for any organisation with the scale of responsibilities of the ICC, if it is to avoid inappropriate risks that could damage its good reputation.
It goes on to say:
“Additionally, preserving organisational integrity, fairness and transparency are as important to reputation as harder-edged, commercial results. The reputation of the ICC and international cricket as a whole is at risk if the right standard of Boardroom behaviour is not seen to be in place, both at the ICC and at each and every Member Board. The challenge of embedding these values in an organisation grows as stakeholders’ demands increase. In short, protecting and maintaining the reputation of cricket is fundamental to the long term sustainability of the game. It may be everyone’s responsibility, but the ICC has, and should have, a lead role to play. Repositioning the ICC to proactively shape the overall governance of the game rather than its current reactive role on behalf of the Full Members is critical”.
“There are differences between the financial strength of Member Boards brought about by the respective value of commercial rights in countries such as India, England and, to a lesser extent, Australia and South Africa. The increased commercial strength of cricket generally is of significant benefit to the international game as a whole and needs to be embraced. An unintended consequence of this however, is that there is a perception that those in a strong financial position are using that strength to provide leverage to reach decisions that may be in individual Members’ interests rather than the interests of the majority of Full Members, or indeed international cricket as a whole.” (Emphasis added)
The Three Boards have completely undermined the integrity and standing of the ICC, its President and the Board of Directors in promoting their own agenda without due and proper discussion by the Board. Clearly, the right standard of Boardroom behaviour is not seen to be in place.
2. The Principal Issues in the Paper
1. The Members hand over control of the affairs of the ICC to BCCI, ECB and CA
BCCI, ECB and CA say in the Paper that they will provide greater leadership and stability to the ICC and its Members. In return they ask the Members to hand over powers of the ICC Board to them. They do not demonstrate how they will do this in any meaningful way. They do, however, plan to make significant financial gains for themselves and completely control the workings of the ICC to the exclusion of the other members.
It is proposed that the Three Boards will have permanent representation on a new ICC Committee (the Executive Committee) plus one nominee from all the other ICC Members. This Committee under the rotating Chairmanship of BCCI, ECB and CA will act as the sole recommendation committee on all constitutional, personnel, integrity, ethics, development and nomination matters as well as ICC financial distributions. They will also take charge of the ICC Finance & Commercial Affairs Committee on similar lines. In other words, the ICC Board will have little or no effective powers, all of which will have been vested in the Three Boards via these two Committees.
Key objectives and challenges that the Three Boards have identified are not new (see Appendix 1). These can be dealt with by the existing ICC Board, of which the Three Boards are an integral part. There is nothing in the issues that the ICC faces which can justify the members of ICC handing over control of its affairs to the Three Boards.
The Three Boards do not address governance issues in terms of their own accountability, check and balances on them to safeguard the interests of the other Full, Associate and Affiliate members, avoidance of conflict of interests, discharging their fiduciary responsibility to the ICC etc. In addition, there are concerns about the quality of governance of one of the Three Boards.
2. To change the existing revenue sharing arrangements.
This is a constitutional change which will require the approval of 8 Full Members.
The proposal in the paper completely ignores the recommendations in the Woolf Report:
‘The surplus revenues from the ICC’s activities should be available to the ICC to be distributed for the good of the international game. The present arrangements involving a revenue sharing mechanism predominantly for the benefit of existing Full Members should cease. It should be replaced with one whereby Full Members receive a fair share of revenues based on need. This will enable the ICC to distribute funding in accordance with its overarching role to promote and develop international cricket, including Test Cricket, across all Members.’
Under this recommendation BCCI, ECB and CA would receive a relatively small share of the ICC revenues.
The proposal put forward in the Paper is fundamentally flawed.
It assumes that the members have proprietary interest in the money their countries’ economies generate for ICC events. The fact is that broadcasters buy cricket rights because it appeals to their customers, drives subscriptions and advertising revenues. Similarly, sponsors use cricket to promote their goods and services. While the values are generally greater when the broadcaster’s country is playing, not all of this can be attributed to the individual country’s Board.
The quality of the opposition has a great bearing on the value Boards receive for their media rights. A strong case could be made that the broadcast revenues for bilateral home and away series between two members should be pooled and shared equally.
While there would be a significant reduction in the value of the ICC Commercial Rights if India did not participate in an event; it would not be a reduction of 80% of ICC revenues. The Indian broadcasters would still wish to broadcast ICC Events.
There would be a relatively greater impact, than the values attributed to Pakistan, South Africa and West Indies in the Paper if these three countries did not participate in an ICC event. From discussions with broadcasters, if a World Cup was held without Pakistan, South Africa and West Indies ICC revenues for the event could be reduced by 30%-40%.
The proposed Distribution model for 2015-2023 significantly reduces the amount the Full and Associate & Affiliate Members will receive apart from BCCI, ECB and CA.
Based on revenues of $2.5Bn members would receive:
|Gross revenues $2.5Bn||Under Existing arrangement||Proposed by the Three Boards|
|Associate Members; includes 6% of gross revenues under existing||
The biggest gainers are BCCI, ECB and CA. In addition, ICC events for the period 2015-2023 will be held only in India, England and Australia. These Boards will receive hosting fees for the events in addition to the ICC Distributions they propose.
A point that also needs to be addressed is; why does BCCI need more money at the expense of other countries? The domestic and international media fees that BCCI receives from playing with other members are massive and underpin BCCI’s financial position. It is the richest cricket board in the world.
The largest losers are the Associate & Affiliate members who will be $312.5m worse off under the distribution proposed in the Paper. The Paper is silent on this point.
3. Associate Members
The Paper asserts that of the $315m attributable to Associate & Affiliate members for 2007-15 only $179m will be distributed to the members the rest is spent under the heads of event and other costs. The Paper ignores the fact that the Associate & Affiliate members have voluntarily agreed to the way in which their money is spent.
The Paper is not clear whether the Distributions to the 4 ICC Regions and the ACC will continue; this amounted to $54m for the 2007-15.
The Paper further proposes that of the proposed Distribution of $210m for 2015-2023 $105m will go to the top 6 Associate Member (compared to $48.4m for 2007-2015) leaving $105m to be shared among 100 Associate & Affiliate members or an average of $1.05m each over the next 8 years.
If cricket is to grow and develop around the world more investment is required in the Associate & Affiliate countries, not less. The Associate & Affiliate countries represent some of the biggest economies in the world. If cricket could be established properly in the United States of America and China and become an Olympic sport, the ICC could double its revenues in real terms over the next 10-15 years. This requires vision and a less parochial approach.
The Associate & Affiliate members and the Associate & Affiliate directors have not been included in any discussions on how the Paper will impact on them.
The Position Paper of the Working Group should be withdrawn and referred to an external independent panel to review and comment on. BCCI, CA and ECB should have no part in this process or subsequent discussion on this matter as they are clearly conflicted.
The manner in which this Paper has come about indicates serious weaknesses in ICC’s governance. The Woolf Report was submitted to the ICC in 2012; there has been no serious discussion on the Report or its recommendations which among others included:
- Two additional Independent directors with voting rights should be appointed to the ICC Board;
- On becoming an ICC director the person should relinquish any executive or leadership role within their Member Board;
- The primacy of the ICC directors’ fiduciary duties to the ICC should be re-established;
- The ICC directors should neither seek to place undue influence on other members nor allow themselves to be influenced inappropriately;
- Any side agreements between members that may adversely affect the interests of the ICC should be disclosed;
- An Executive Committee comprising the ICC Chairman and Independent directors should be set up to act as link between the ICC management and the Board.
The ICC Board and members should, as a matter of urgency, discuss the Woolf Report with a view to implementing its recommendations as soon as possible.
Past President, ICC 2003-2006