Australian sport has an unparalleled ability to inspire, amaze, and bring sheer delight. Yet, it also possesses a remarkable knack for administrative decisions that leave one scratching their head, questioning the ‘what’ and the ‘why’.
This sentiment is particularly resonant within Australian cricket circles, especially concerning the proposed privatisation of the Big Bash League (BBL) and the recent, rather astonishing decision by Cricket Victoria (CV) to merge the Melbourne Stars and Melbourne Renegades franchises before even initiating a sale process.
The BBL: A Success Story Facing New Challenges
Launched 15 years ago, the BBL, despite its imperfections, has undeniably been an outstanding success. It was a visionary move by James Sutherland and the Cricket Australia (CA) administration of the time, proving to be the single most significant commercial value-add to Australian cricket this century. Beyond securing lucrative broadcast rights, the BBL has opened cricket’s doors to a crucial new audience and introduced a host of talented players to the Australian public who might otherwise have remained in the relative obscurity of Sheffield Shield or local club cricket.
However, the landscape of T20 cricket has undergone a seismic shift since the BBL’s inception. Fueled by the immense financial power of the Indian Premier League (IPL), ultra-short-form cricket has exploded onto the global stage. The BBL no longer enjoys the Australian summer window as its exclusive domain; it now faces a growing cohort of competitors vying for attention and, crucially, offering more attractive deals to marquee players than the BBL can currently match.
In this dynamic environment, the infusion of private capital and entrepreneurial spirit into the BBL should, in principle, be a positive development. Credit is due to Mike Baird and the CA board for pursuing this avenue. It’s worth recalling that one of the most transformative events in cricket over the past half-century was the arrival of Kerry Packer and his considerable financial backing. In today’s climate, private investment is arguably a more sensible and sustainable option than relying on gambling revenue.
Cricket Victoria’s Bold (and Perplexing) Move
Australian sport has an unequalled power to inspire, amaze and bring joy.
CV’s decision to dismantle 15 years of brand investment and fan base development in the Stars and Renegades franchises, without first exploring the market for a sale, appears, frankly, impulsive and commercially unsophisticated.
Deconstructing Cricket Victoria’s Rationale
What could possibly be the underlying logic behind CV’s audacious move?
- Inside Knowledge or Wishful Thinking? One possibility is that CV possesses insider information that the rest of us are privy to. Perhaps they’ve been conducting discreet market soundings for months, and potential buyers of the Renegades’ licence – possibly Indian IPL franchise owners – have indicated a desire for a clean slate.
- Targeting Melbourne’s Growing Indian Population? CV might also be banking on the idea that a new team, branded with a fresh identity and specifically targeting Melbourne’s rapidly expanding Indian population, playing at the iconic Melbourne Cricket Ground (MCG), would be a guaranteed hit. The recent $2.34 billion ($US1.65 billion) sale of the Rajasthan Royals undoubtedly makes for envious reading. However, if the BCCI (Board of Control for Cricket in India) continues to prohibit Indian players from participating in the BBL, will local Indian fans truly embrace a new team solely based on an Indian owner? The odds of this happening are far from guaranteed.
- The “One Team Town” Fallacy? A second potential rationale could be the hope that merging the Stars and Renegades will foster a “one team town” franchise, mirroring the perceived success of the Perth Scorchers. This perspective, however, appears to misunderstand or disregard the historical context of the Stars’ struggles for silverware. A significant factor was the frequent unavailability of their top talent due to national ODI call-ups precisely when BBL finals commenced. Furthermore, being a “two-team town” hasn’t demonstrably hindered the success of the Sydney Sixers. The critical question remains: would a new investor commit substantial funds to a fresh Melbourne franchise that lacks local talent, having been siphoned off to a new powerhouse team replacing the Stars?
A Flawed Auction Strategy
Even if CV’s commercial objectives are acknowledged, their chosen method for conducting an auction process is questionable. The time-honoured approach to maximising returns and facilitating informed decision-making involves keeping all options open for as long as feasible. Restructuring the commercial offering at the conclusion of a process, if necessary, to achieve a superior outcome is sound strategy, not initiating such significant changes at the outset when no market intelligence has been gathered. A more prudent approach would be to inform potential investors that the dismantling of the Stars and Renegades brands, after 15 years of investment, would be considered, but only at a price that adequately compensates CV for such a drastic measure.
So it is with Australian cricket, its plans for privatisation of the BBL and the remarkable decision by Cricket Victoria to
merge the Melbourne Stars and Renegades
before starting a sale process.
There’s a strong likelihood that CV, as the inaugural seller of a BBL licence, will secure a less favourable deal. Without established pricing benchmarks, they are inadvertently setting a precedent that other states will aim to surpass when they eventually bring their licences to market. Historical precedent in new and opaque markets demonstrates that sellers who are one-third or halfway through a process often achieve the most advantageous outcomes.
Moreover, the primary certainty for any first-time buyer will be owning a franchise that competes against seven others, all operating under the rules set by the party conducting the competition. Faced with such a risk profile, a shrewd investor would likely discount their offer. While it’s possible they won’t, and CV might emerge as remarkably brave if a deal is struck, the odds are stacked against them. The eventual outcome holds significant weight, not just for Victorian cricket but for Australian cricket as a whole. A Melbourne-based team represents one of the most valuable assets CA has to offer.
Who’s Driving the Process, and for Whose Benefit?
This raises a fundamental question: who is orchestrating these auctions, and whose interests are being served? BBL teams are currently owned by state associations. The crucial query is: who will ultimately benefit from the proceeds of these sales? If the state associations are the recipients, is this truly in the best long-term interests of cricket? Such a scenario could exacerbate existing inequalities, making wealthier states even richer. Furthermore, do these associations possess the requisite skills and temperament to manage these funds for the enduring benefit of the sport? If Cricket Australia is set to receive the proceeds, is it plausible that they would passively allow state associations to conduct sales processes on their behalf for what will be the game’s most consequential commercial asset for the next fifty years?
It is imperative that CA reasserts control over this process, managing it directly for the overarching good of the game, free from pre-emptive decisions made by others on its behalf.
Reinvesting for the Future of Cricket
When the money does come in – and all the states will, in my view, eventually cede to the compelling commercial logic for private investment – there’ll be no shortage of hands out for a slice.
When the inevitable influx of capital materialises – and it is my firm conviction that all states will eventually succumb to the compelling commercial logic of private investment – there will undoubtedly be many eager hands reaching out for a share. Given the long-term challenges cricket faces in maintaining its relevance, it is imperative that these funds are reinvested at the grassroots level.
This represents a unique, strategic capital asset for the sport. It should not be dissipated through short-term windfalls, such as distributing a portion of the proceeds to elite players, many of whom participate minimally in the BBL or are nearing the twilight of their careers.
These proceeds must be invested and grown for the future of the game, not for its present or its past. Leading players, with a genuine foresight for the game’s trajectory, should undoubtedly concur with this principle.
John Wylie AC is a former chair of the MCG Trust and the Australian Sports Commission, and the founding deputy chair of the Melbourne Stars.
