Random Analytica: Sandpapergate – The Fallout
by Shane Granger
The fallout from #SandpaperGate continues for Cricket Australia, Steve Smith, David Warner and Cameron Bancroft. Just days after Bancroft used sandpaper to scuff the ball at Cape Town the three cricketers who have been identified as the main contributors in the controversy have been given long playing bans, while Smith and Warner have both been cut from their respective IPL teams. The employment income alone can now be calculated in the millions.
Cricket Australia and the individual players are also becoming sponsorship persona non grata.
The Australian Broadcasting Corporation has written a piece outlining the main details of the ongoing sponsorship fallout. Magellan tears up sponsorship deal with Cricket Australia over ball-tampering scandal. Excerpt:
Wealth-management company Magellan has terminated its three-year sponsorship agreement with Cricket Australia in response to the ball-tampering scandal.
The naming rights sponsorship of the men’s national cricket team’s domestic series, estimated by the Australian Financial Review to be worth $20 million, only started ahead of last summer’s Ashes Test series and was supposed to run for two more seasons.
Magellan’s co-founder and chief executive Hamish Douglass said the ball-tampering in South Africa was “so inconsistent with our values that we are left with no option but to terminate our ongoing partnership with Cricket Australia”.
In my finance life I have had the opportunity to meet Hamish and although I don’t know him well he is a much respected figure in the Wealth Management community and he would be horrified by the behaviour of the Australia Cricketers. I suspect when he returns to our shores to discuss his companies investments he will be answering more cricket questions than anything else.
Then there are the TV rights. ESPN have detailed the ongoing fallout for James Sutherland including the next five-year media rights deal with Channel 9 which was worth $500 million AUD in 2013 but might be worth a lot less than expected after this week. Sutherland flies home into mounting chaos. Excerpt:
Still more damaging was the revelation that Channel Nine, the prime broadcaster of cricket in Australia for more than 40 years, had signed a new deal to cover the summer of tennis up to and including the high-rating Australian Open. In the wake of the announcement, Sutherland received assurances from the Nine chief executive Hugh Marks that the network was still very much interested in the rights to cricket, but there were several factors to be digested.
Marks has previously made no secret of the fact that he does not see the need for Nine to maintain the umbilical connection to cricket that his predecessors David Gyngell and David Leckie, in particular, maintained either side of the death of Kerry Packer in 2005. There have also been strong indications that Nine does not wish to again pay the AUD 500 million price tag CA slapped on its international summer of cricket in 2013.
Here is an infographic to highlight the sponsorship fallout (updated to Thursday 29th March) with thanks to Michael Janda for the idea.