Cricket South Africa (CSA) has maintained it remains in a healthy financial position, despite having to accommodate reported losses of approximately R180m (€11.2m/$13.3m) from the failed launch of a new Twenty20 competition.
In October, the inaugural season of CSA’s T20 Global League was postponed for one year until November 2018 just days after the national governing body revealed that it was set to post a significant loss on the launch edition of the tournament.
In September, Haroon Lorgat, who spearheaded the concept of the tournament, left his role as CSA chief executive. It was left to Lorgat’s acting successor, Thabang Moroe, to explain that CSA could register a loss of up to $25m on the inaugural tournament – eating into more than half of the governing body’s cash reserves.
CSA president, Chris Nenzani, has now expressed confidence in the organisation’s financial health following a Special Board of Directors meeting held in Johannesburg. “A complete reconciliation of the total expenditure incurred on the T20GL has been concluded and we can now confirm that all monies have been adequately accounted for and that we have found no irregularities or financial mismanagement,” Nenzani (pictured) said.
“These reconciliations will now be examined by our external auditors, Nkonki, as part of their normal audit procedures.”
The ESPNCricinfo website said the debacle surrounding the T20GL has led to losses of around R180m, approximately R80m of which will be spent in player reimbursements for 60 per cent of contract fees signed for the tournament, which was intended to challenge the world’s major domestic T20 leagues.
CSA is said to be confident in its position due to cash reserves of R500m and Nenzani maintained it made the right decision in postponing the T20GL. He said: “Having gone through all the reports, we are convinced that we made the right decision to postpone the T20GL as we were unable to secure the required revenue streams on time and felt that given the uncertainty, continuing with the league in 2017 would pose significant financial risks to CSA.
“As a 100-per-cent subsidiary of CSA, the Board of Cricket South Africa accepts responsibility for losses incurred and the general disappointment of the tournament being postponed.”
The Board also noted that the investigations into the league’s demise highlighted “pervasive governance lapses” around the T20GL. “Many learnings have emanated from the findings of the internal investigation,” Nenzani said.
“The CSA control environment is what stood us in good stead to date and the same standards should be applied even when we decide to embark on a ringfenced initiative as the T20GL. We will fix these aspects with a great sense of urgency.”
CSA added that its board has also tasked management to look at the various financial models of T20 leagues around the world and to present a viable financial model for the T20GL before a final decision is made on its future.
ESPNCricinfo reported that none of the eight franchise owners signed official contracts for the inaugural competition and while CSA believes some of them are keen to continue, there is no confirmation any of them will.