The T20 Revolution - Money Trail

During the IPL's 12th edition, Cricbuzz is publishing a five-part series looking at the broader picture of how Twenty20 is shaping cricket's future. The first installment follows the money to show how the increasing demand for domestic leagues is set to impact international cricket.

In the years to come, when the story of cricket's revolution from a sport centred around the international game to one dominated by domestic limited overs leagues is being told, scenes from Melbourne on 2 January 2016 will be regaled as one of the landmark moments. That was the day when 80,883 fans packed in for a Big Bash League derby at the MCG, just a week after the Boxing Day Test - supposedly the iconic fixture of the summer - had attracted less than 10,000.

The upsurge in scoring rates and fielding standards in international cricket had already confirmed Twenty20's ability to drive innovation on the field during its first decade of existence. But when that Melbourne crowd smashed the world record for attendance figures at a domestic cricket match - in a country where Test cricket remains stronger than most - it was an indicator that T20's second decade would be spent disrupting the sport's broader landscape. Events since that day have consolidated a new pattern, giving a clearer vision of the future that is coming: one in which the rich countries will get richer, the poor will get poorer, and international cricket will lose its relevance as the game is - as one observer puts it - "cannibalised" by its own member boards.

If the Melbourne crowd was a visual representation of a shift towards domestic leagues, the trend has been confirmed by developments at the less visible epicentre of the cricket world - the broadcast rights market. In 2017, Star agreed to pay $2.55b for the Indian Premier League's television and digital rights over a five-year period - an outrageous leap from the $900m that was paid for a 10-year period in the previous rights cycle. Six months later, the rise in T20's value against that of international cricket was highlighted when Star paid $944m for India's home bilateral rights for the same five-year period. While the IPL rights had risen more than ten-fold from one (admittedly longer) cycle to the next, international rights had increased by just 59%. Although the cost per match for Team India rights was marginally higher than that of the IPL, many of those international matches will fill five days of television time rather than just four hours.

In Australia, the rising value of T20 was also clear. Although Cricket Australia bundled all of its rights into one package that was bought by Foxtel and Channel Seven last year for around A$180m per season, making it difficult to say exactly what was paid for the Big Bash, analysts like sports media lecturer Doctor Sam Duncan were in no doubt about the tournament's importance to the deal. "It used to be that the Big Bash was worth A$20m to Cricket Australia and the rest of the Aussie summer was worth A$80m. Well, now they are almost on par (in terms of value)," he says. "The Big Bash was probably the big fish. Because of its popularity across a wide demographic, the rights were highly sought after and really did add the most value of all the forms of cricket to the broadcast rights."

The leap in revenue was even more pronounced in England - in 2017 the ECB announced a GBP 220m-a-year deal for the period between 2020 and 2024 that will be worth nearly three times the GBP 75m it currently receives. This time there was no existing league driving the price up; the mere presence of a brand new competition - subsequently revealed as The Hundred - was enough.

Taking these three countries in microcosm, one might simply conclude that the amount of broadcast money flowing into cricket has exploded - rising by more than 50 per cent from one rights cycle to the next - driven by the appetite for domestic leagues as rights for international cricket lose value.

But here's the rub.

"The broadcast pie around the world is only a certain size," points out Tony Irish, the head of the Federation of International Cricketers Associations. "The huge uptick in the IPL and BBL does not mean that the broadcast pie has grown exponentially - it may be a bit bigger but not hugely so. A larger portion of it is being channelled in the direction of the leagues. If the leagues get a bigger and bigger slice then it means a smaller slice for international cricket. The subcontinental rights for Cricket South Africa, the ECB, CA and everyone else from a home India match is less than it was four or five years ago."

This depreciation is linked to Star's decision to spend big on IPL rights and forego cricket in England and Australia - even in a year when India was due to tour both countries. While the ECB and CA can ride out the drop in rights revenue for home matches against India, the effects will be keenly felt by the likes of Cricket South Africa, who go to market with their broadcast rights next year. It is likely that their revenue from both local and overseas broadcasters will fall. With the Mzansi Super League yielding a relative pittance - CSA reportedly sold the international broadcast and commercial rights to Global Sports Commerce for just $2.4m per year, and the SABC paid nothing for the domestic rights - this will be a heavy hit. Further vulnerabilities await.

"There's no doubt that you need a vibrant league in your own country, because if you don't then you are going to become a net exporter of players," says Irish. "You also won't have any revenue which is independent of the international cricket system, in which one is open to the vagaries of - as CSA found out on at least one occasion - an Indian tour being cut in half and the next thing millions fly out the door. This is because the bi-lateral international system is not highly regulated; it's a bunch of deals being done between countries around the world. It's very unstable."

The creation of Test and ODI Championships presented an opportunity to change this with a structure in which teams all played each other the same number of times. This would have ensured equal access to the top teams - which is crucial for those who still generate the majority of their revenue from international cricket - but also would have set up a product with the sort of context that fans could buy into. Instead the model agreed on will simply maintain the status quo.

"The Test Championship may add some context but it doesn't go nearly far enough. The example I always give is: in the English Premier League, which is an incredibly successful football product, do Manchester United, Arsenal, Manchester City and Chelsea play each other four times and then just play against West Brom or Southampton once? No, they don't because it wouldn't make sense in a league. But cricket is going to do that in a Test Championship," says Irish.

"What they've done is wrapped some context around a pre-existing schedule, whereas they should have said, 'Okay, what's the best competition structure that we can put in place?' And then do all the scheduling around that structure. If cricket continues along this same path it will just keep cannibalising itself because at the end of the day the T20 leagues are all owned by the boards, except for the CPL. Boards will lose more and more on international deals, but if a Board runs a league well - and you've got to run it very well - then it might make some money back on its league."

With established T20 leagues that are growing in both stature and ability to generate television rights revenue, Pakistan and Bangladesh might prove the most resilient nations outside of the top three as the landscape changes. Others will struggle badly.

Little attention has been paid to the subject, but Irish says it has been FICA's biggest issue for years. This is not solely down to concerns around player welfare - after all, T20 is creating new opportunities for player autonomy in the form of free agency (as will be seen in Part Two of this series), while the leagues also offer equal opportunities to players regardless of where they originate from (Part Three). But to ensure that international cricket remains healthy and Test cricket survives, FICA maintain that "appropriate balance" between international cricket and the T20 leagues is critical, and requires that three key areas be addressed.

The first is the global schedule, where clearer windows need to be put in place to ease the tension and competition between the leagues and international cricket. The second is the game economics at international level, where the top three are playing more and more cricket against each other, and generate more and more money for themselves - on top of the advantage that India and England already have from receiving a superior share of distributions from ICC events. The upshot is that they can pay their international cricketers handsomely and retain them, at the same time that South Africa has now lost an entire Kolpak XI.

Thirdly, the ICC needs to create regulations around player movement and T20 leagues that are, Irish says, "fit for purpose and actually address the issues. Recently the ICC has worked on this and involved us in that work. It becomes important to convert that comprehensive piece of work. The knee-jerk reaction is to say that a player can only play in one or two leagues, but that won't work. It's illegal, firstly, as a restraint of trade especially in respect of uncontracted players. Secondly, players will just give up contracts and say, 'If you are going to restrict me under your contract then I don't want it. I want to be a free agent.' Some of the best white-ball players in the world have already headed down that path and others will follow. These three key areas are becoming more and more pressing for the game."

Further adjustments beyond these recommendations could also help to make Test cricket more appealing. Australia's first day-night Test against New Zealand in 2015 attracted over three million viewers in Australia - three times the average Big Bash match, which is itself a "ratings winner" according to Dr Duncan. Four-day Tests also make increasing sense from consumer, commercial and scheduling points of view.

Earlier this month, the MCC raised eyebrows when it claimed that 86% of the 13,000 fans it had surveyed across 100 countries prefer watching Test cricket to limited overs matches. The statement was completely at odds with where the broadcast rights trend says eyeballs are turning.

And yet the two are not completely incompatible with each other. Perhaps the truth is that cricket supporters genuinely do value Test cricket most, but with an increasingly uneven playing field and too many meaningless matches, its allure is weakening and attention is turning to the leagues. Few would argue with Irish's assertion that results in the recent West Indies v England and South Africa v Sri Lanka series were "outliers" that will become even less frequent in the future as the poorer nations lose more players to free agency. By contrast, T20 leagues generally have salary caps that create a fair and relatively unpredictable contest, which makes for better entertainment.

And that, after all is said and done, is what cricket has become. What started out as a form of civic engagement, and morphed into a source of international identity, is now just another form of entertainment in an age when entertainment options have never been so abundant or readily available. Football has long since morphed into a game built around domestic leagues. The Twenty20 revolution is shifting cricket in the same direction.

This is not necessarily a 'bad' thing - as we will see in the articles that follow in this series, there is plenty of good about it. But as administrators fail to respond to the changes, the concern is how much more meaningful international cricket will be lost along the way.

Part Two, in which Bharat Sundaresan looks at how Twenty20 is changing the landscape of player employment, will be published next Wednesday (April 3).