Tuesday 21 January 2014

But the market can't count

On Monday, Misbah-ul-Haq angled a single to point to seal Pakistan's remarkable day-five heist against Sri Lanka and one of history's great Test runchases.

A match that had meandered for four days exploded into a classic finish. Great cricket, but was it financially viable? According to the ICC commercial rights working group, probably not.

Their leaked position paper revealed much about the dysfunctional governance of world cricket but it also showed just how impoverished an arbiter of sporting worth “the market” really is.

The paper speaks hopefully of things like “self sufficiency” and “independence” for national cricket boards, but proposes a system where the richest boards take an even bigger slice of world cricket's revenue.

It reasons that the countries with the biggest broadcasting markets – India, Australia and England – are cricket's biggest wealth-creators and deserve the greatest rewards. That's supposedly the law of the market.

A law that decrees Azhar Ali's matchwinning century almost worthless because, in commercial terms, Pakistan playing Sri Lanka in UAE is trivial.

But has the market miscounted? What if Azhar takes this experience to help Pakistan thrive in Australia? What if Junaid Khan uses skills honed against, say, New Zealand to deliver an eyecatching series in India? The kind of series that draws viewers and sponsors in even greater numbers. Where, then, was the value created?

The sporting drama, romance and historical significance of matches like Shajah are easily overlooked by the market. But even in the hard-nosed terms the working group thinks it deals in, the market is a faulty calculator.

Cricket's value is captured when broadcast rights are sold, but it is created well before then. The Big Three feel themselves worthy rulers of the sport because they have a cricket-watching population which advertisers are prepared to pay broadcasters vast sums to reach.

Yet people choose to watch cricket (or follow it online) for its history, its culture, its personalities, its skills and the closeness of its competition. This is where “revenue generation” actually happens and why talk of “independence” is so dishonest.

For all lipservice paid to meritocracy, the proposals also reveal how markets work by limiting, rather than embracing, competition. In the two-division future it suggests, The Big Three can't be relegated. And, despite cricket's desperate needs for global growth, it suggests money be taken from development and funnelled back to the centre.

Given the opportunity, there could be millions of new fans in China for example. But the country has one turf pitch and barely any international fixtures. The ICC reported $1,564 million revenue in its last cycle three-quarters of which is handed back to 10 Test-playing countries. Some of this is money that could be used to foster the sport in countries like China.

Though in the short run a cost, in the future it would provide a bigger cricket-loving population and a sport with a global outlook. The kind of thing advertisers might one day like.

Yet, as Russell Dengan points out, the proposals suggest the opposite. In the 'cost-savings' proposed, if ICC revenue reached $2 billion, the Big Three would pocket 108% of the increase. As usual an appeal for 'market rule' is in fact a call for cartels and cabals.

Apologists for the paper tell the world to take commerce seriously. But it's less about money than it is about power.

No comments: