Cricket: 'Risk and reward' model unveiled

Justin Vaughan. Photo / Paul Estcourt

An eight-year collective contract between New Zealand Cricket and the Players' Association offers financial incentives to the top players, while protecting the game at grassroots level.

The details of the contract were revealed yesterday after months of negotiations.

It is a "risk-and-reward" model, with top players benefiting if NZC's revenue exceeds expectations; if there is a shortfall it is they who would have their wallets lightened first.

Revenue generated above the forecast figure is to be split 65:35 in favour of the player pool for the first $60 million and 50:50 beyond that. Effectively, it ties NZC and its Players' Association more closely.

NZC chief executive Justin Vaughan said the old system was built around revenue from the World Cup arriving in year one, then being spent in the following three years.

"A tour by India is far more lucrative financially than participating in a World Cup. So we looked at the volatility of finances along that period and eight years seemed a good period of time where we could even this out and create a sustainable model."

The idea is that the strong financial elements - India touring New Zealand, a World Cup and a tour by England - are spread over the eight years.

"What we are doing is flipping the financial model upside down and it took quite a lot of thinking to get to the position where we are all comfortable."

Players' Association boss Heath Mills admitted the new philosophy "took a bit of explaining" to the country's leading players.

"The guys understood the model. International cricket is still the pinnacle. They want to have an environment which is aspirational, keeps the best players in the country, and we had to come up with a way to do it."

NZC is forecasting about $360 million in revenue over the next eight years. Co-hosting the World Cup with Australia in 2015 is expected to put $25 million into NZC reserves.

A window was also created for players contracted to the Indian Premier League.

Key Points:

* Calculations are based on an average annual commercial revenue for NZC of $45 million.

* $152 million is guaranteed from professional cricket to underpin the game at all levels, including $65 million for grassroots cricket, and ring-fencing $25 million for NZC reserves from co-hosting the 2015 World Cup.

* The financial model is "risk and reward", meaning certainty to amateur funding, while giving the top players a greater share of any revenues achieved above the forecasted figure.

* Establishment of a players' retirement fund.