“We are quite concerned at the current state of the finances at USA Cricket,” Srinivasan told ESPNcricinfo. “The fact that the ICC has had to withhold funding, that gives us a lot of concern. We are here to help them out. As long as it’s constructive, positive engagement, we want to work with USA Cricket to find a way to help them work through this current financial crisis.”
Of particular concern to Srinivasan is the fact that Rai’s letter highlighted that board employees – including national team players – have gone unpaid. This in spite of the fact that much of ACE’s payments to USA Cricket have been precisely earmarked for this purpose.
“Contractually we have an agreement that guarantees them a minimum of $8 million over the first 10 years of the agreement,” Srinivasan said. “Now where we are today is that we’ve already spent close to $5 million in the first three years directly to USA Cricket, which is close to $1.4 million dollars above what we are contractually obligated to spend.
“Since 2019, we’ve spent $1.7 million dollars on player payments directly to players. So, when we read things in Atul’s mail that they are not able to pay player salaries, it’s a little bit concerning given that we currently pay seven of the players on the USA men’s team.”
“We pay them 5% off the top. We take 100% of all the costs, we take 100% of all the losses. All the exposure is ours. So I think it’s an immensely fair deal.”
Srinivasan on ACE’s deal with USA Cricket
According to Srinivasan, ACE has also given USA Cricket an additional $800,000 as “discretionary funding” that is outside the scope of the contracted $8 million. Yet even with this additional money, Srinivasan says that the details of the issues outlined in Rai’s letter caught his attention.
Though USA Cricket was not in debt at the time, it also did not have the requisite cash on hand to host the Ireland tour and needed ACE’s intervention. As part of ACE’s commercial agreement with USA Cricket, there is contractual wording that states that ACE will manage all commercial activities for ODIs and T20Is that USA hosts. However, when the opportunity with Ireland was presented to ACE, there was some pushback over the costs of staging the series with several board sources stating that ACE did not give their full backing to go forward with the event.
Srinivasan confirmed ACE’s hesitancy, but says it was based on projected budgets to stage it during the Christmas holiday period in Florida, a peak cost destination during that time of year. Bio-bubble guidelines in place at the time also escalated costs.
“Let me be completely clear on one point. The opportunity to play and host a Full Member was super exciting for us,” Srinivasan said. “As we got more details… we felt that the projections were too rosy and that it would fall well short of being a break-even event. We felt that the revenue projections were not realistic, so the shortfall would be much larger than they expected us to cover. And the timing of it and the location of it, we felt the costs were going to be too large to fund.”
“So what we did say was that we would forego any of our revenue shares. We said USA Cricket could keep 100% of the revenues and we would provide an advance – since their feeling was that they could break even on this – and when you get revenue back, just pay us back.”
In the end, Srinivasan says ACE provided a $150,000 advance on future disbursements. ACE also covered the costs of sending two staff members to help run on-site operations and logistics for the series. But only the two T20Is were played, triggering heavy losses.
“Ultimately they came in far, far below even what we thought they would come short of,” Srinivasan said. “The way this arrangement is meant to work is they find a Full Member or multiple Full Members to come and we would fund all of that. The exposure is meant to be ours and then we would monetise it, commercialise it and if there is a loss, that’s our loss to bear. This was unique in the sense that we were not willing to do it given all the constraints. So we said if this is something you still want to go ahead, you do all of it. We’ll front you the cash to pull it off, but you keep all the revenue. But the exposure is also yours.
“We haven’t been paid back that [$150,000]. Technically it would offset against future payment in our agreement. This is part of this holistic discussion that needs to happen. Our goal is not for USA Cricket to be in financial distress.”
As for board chairman Rai’s assertion that the original deal negotiated between USA Cricket and ACE needs to be fixed so that it “works for all parties” – Rai voted in favour of the deal during his first stint as a board director when it was signed in May 2019 – Srinivasan characterised it as a negotiating posture from Rai.
“We are going to pay them 5% gross of all our cricket commercial activities, whether it be Major League Cricket or anything we do,” Srinivasan said. “We pay them 5% off the top. We take 100% of all the costs, we take 100% of all the losses. All the exposure is ours. So I think it’s an immensely fair deal where you have no exposure, you have no risk and you get a significant chunk of top-line revenues across all commercial activities that MLC will be doing.
“So I think all that collectively, with the ICC’s funding and with what we’re doing, my view is that USA Cricket is by far the best resourced member in the Associate world at least. Given that, I think it is of a little bit of concern that they find themselves in this situation. But having said that, we are here and we would love to engage with them and see if we can help them out of this situation.”