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Cricket pay saga a case study in how not to resolve industrial disputes in sport

Both James Sutherland and Alistair Nicholson faced criticism for their handling of cricket’s pay dispute. AAP/Tracey Nearmy

Cricket pay saga a case study in how not to resolve industrial disputes in sport

Both James Sutherland and Alistair Nicholson faced criticism for their handling of cricket’s pay dispute. AAP/Tracey Nearmy

The protracted pay dispute between Cricket Australia and its players is over. Harmony is restored in the sport’s employment relations. Playing tours to Bangladesh and India, and the related commercial agreements, can resume.

Most importantly, the Ashes are saved – at least until England arrive later in the year.

Extended collective bargaining disputes between players’ unions and their employers are not unusual in modern professional sport, especially in the US. Baseball, for example, had eight work stoppages, including one season-long dispute, between 1972 and 1995.

Nevertheless, an unusual characteristic of this dispute is that it appeared for long periods to be a process of negotiation through media spin and not traditional face-to-face talks. The resulting lack of trust between the players and their employers delayed the negotiations. This relationship will need rebuilding in the months ahead.

Spinning in the media

The lack of trust was exacerbated by the inevitable media focus on key individuals in the dispute.

For one, Cricket Australia CEO James Sutherland was heavily criticised for his apparent brinkmanship in not getting involved until a very late stage of the dispute.

However, his approach – leaving the initial contacts to the governing body’s lead negotiator, Kevin Roberts, and suggesting that, in the absence of agreement, mandatory arbitration might be necessary – was a wholly unremarkable negotiation ploy in the “structured antagonism” of industrial relations.

On the other side, speculation surrounded the capacity of the Australian Cricketers’ Association’s Alistair Nicholson to complete a deal. The speculation, noting Nicholson’s AFL background, highlighted his apparent inexperience – even naivety – in such deal-making. Again, this spin was as unhelpful as it was unsubstantiated.

Both sides also used the media to flag that a failure to negotiate a deal would have potential legal ramifications. The 230 or so players argued that the termination of the previous agreement meant they were, in effect, unemployed. Thus, as free agents, they claimed they could negotiate their own sponsorship and endorsement deals.

These deals, they argued, would inevitably rival existing, and protected, Cricket Australia sponsorship deals. The impact this may have had, in terms of the pressure that official sponsors brought to bear on Cricket Australia to complete a deal, should not be underestimated.

In echoes of the World Series of Cricket split of the 1970s, the players also argued that any interference by Cricket Australia in such deals – including the possibility of them playing in events not sanctioned by Cricket Australia – would equate to an illegal restraint of their trade or livelihood.

A less effective ploy by the Australian Cricketers’ Association was its idea that it would seek to exploit its players’ collective image rights in India.

The exact nature of the companies that might invest in such rights always remained unclear. In any event, players’ exploitation of image rights is seen more as a legally recognised way to reduce their personal tax burden, rather than having any meaningful, external economic value.

Both sides also engaged in quite an amount of what can only be called “virtue-signalling” regarding their commitment to grassroots and women’s cricket.

Cricket Australia made much of its “duty of care” to the sport as a whole. It argued the existing revenue-sharing model – 70% on elite cricket, 18% on administration costs and 12% to grassroots cricket – needed to be amended.

The players continuously highlighted their commitment to a “gender-neutral” final pay agreement, which would recognise the growth of the women’s game and that the average wage for a female international player should double to A$180,000.

In both instances, the union’s negotiators seemed to have got the better of Cricket Australia. It secured the biggest pay rise in the history of women’s sport in Australia. In addition, the Australian Cricketers’ Association will largely claim the credit for an innovative grassroots investment fund.

What about the revenue-sharing model?

At its core, however, this was a straightforward workplace pay dispute. The players demanded an increased share of rising revenue streams, while the employers sought to balance these demands against the longer-term good of the game.

Again, it appears the Australian Cricketers’ Association prevailed.

Unlike the announcement of recent sports pay deals, little effort was made at Thursday’s press conference to present the deal as a win-win for both parties.

The reason is clear. Cricket Australia made much of the need for the sport to move away from a gross revenue model to one based on a set pool/shared revenue approach.

In May, and somewhat strangely by video, Cricket Australia’s chief negotiator outlined its offer to the players predicated on an amended revenue-sharing model. Comparing that offer to what has been agreed – the players obtained up to 30% of agreed revenue – it’s clear the union’s definition of revenue-sharing prevailed.

Finally, an interesting feature of this agreement is what remains unsaid. The players have secured not only an upfront or guaranteed share of Cricket Australia’s revenue stream, but also a share in its forecast growth.

This is of interest because, in 1997 – when the first agreement was reached – Cricket Australia’s revenue was $40 million per year, split evenly between gate money, sponsorship and broadcast rights.

Cricket Australia’s current revenues are around $400 million per year; 80% of it from broadcast rights. This 80% is subject to what’s called the “digital disruption” of sport, a phenomenon that encapsulates our social-media-driven age and its impact on the ways in which we play, watch, sponsor and consume sport.

Longer forms of cricket (and other sports) are becoming less attractive. In addition, large-scale broadcasting deals with a handful of TV companies are becoming a thing of the past, as the broadcasting market for sport fragments onto a bewildering array of multimedia and digital platforms.

A characteristic of this dispute, and why its details will be closely followed elsewhere, is how it will in the future capture greater revenue from shorter forms of the game, as broadcast on platforms such as Cricket Australia’s website and related social media outlets.

What now?

In the end, Cricket Australia and the Australian Cricketers’ Association struck a deal in a rather old-fashioned, “Test match” way.

Both sides faced off for four to five days. Some spin was used. But, eventually, the game was declared a draw – and one side (Cricket Australia) was left with many regrets.

Whether Test cricket remains the game’s future is a matter of debate. What’s rather more certain is the way the game is financially exploited, and its players remunerated, is changing rapidly.