CSA Presentation to Parliamentary Portfolio Committee | 30 October 2018

CSA Presentation to Parliamentary Portfolio Committee | Cape Town | 30 October 2018

2. Financial Performance

3. Governance and related matters

4. T20 Tournament - Mzansi Super League

THE BRIEF

Beresford Williams - Non- Independent Director

Thabang Moroe - Chief Executive

Naasei Appiah - Acting Chief Operating Officer

Lindiwe Ndziba - Head of Compliance & Company Secretarial

CSA DELEGATION

 Our strategy is based on FIVE STRATEGIC PILLARS named below. CSA is driven by its aspirations to be the most successful and sustainable organisations in the cricket playing world. We continue to measure all our progress against these strategic goals:

1. Excellence 2. Development 3. Sustainability 4. Transformation 5. Brand promotion

INTRODUCTION

2. Both our Proteas men’s and women’s teams continue to perform at admirable levels and are amongst the best in the world.

a) Excellent home Test results beating India as the no 1 ranked team and Australia for the first time in history. b) Proteas Men’s players occupy 10 spots in the top 10 rankings across all formats and skill areas. c) Proteas Women’s players occupy 6 spots in the top 10 rankings across all formats and skill areas. d) Proteas Women’s team finishing top 4 in the ICC World Cup. e) Evenly balanced domestic cricket leagues with regards to team strength. EXCELLENCE

1. Invested in cricket development across all level of the Cricket Pipeline.

2. Expanded Africa T20 to Limpopo and Mpumalanga in 2018/19 – Full 9 province participation in the Cup tournament.

3. Addressed the value of senior provincial contracts by making them fully professional.

DEVELOPMENT COSTS

Cricket development helps us realise our vision of making the game available to all South Africans who want to play it.

1. Hubs and RPCs (Regional Performance Centre) increased from 51 to 55 and 11 to 12 respectively in 28 out of 52 municipal districts. This will enhance growth in grassroots cricket as a result of increased access to previously disadvantaged communities.

2. An additional 110 players from the Hubs and RPC programmes were exposed to various National weeks to bring to a total of 243.

3. Great player development pipeline evidenced by number of new players from the domestic system excelling at international level and gaining global recognition.

4. Through additional development sponsorship secured in the current year, CSA introduced its first ever RPC U/17 National Week.

DEVELOPMENT

© COPYRIGHT CRICKET SOUTH AFRICA 2017 5. The CSA Player Performance Plan (PPP) is aimed at addressing the “performance gaps” of players and is specifically developed and aimed to address the performance related gaps of players from disadvantaged areas.

6. Identified players from Hubs and RPCs as well as other disadvantaged areas are assessed based on a needs analysis and then assisted in areas of development needs and these range from additional one on one coaching, socio-economic challenges and equipment needs. CSA has made R5 million over the next 4 years available for the PPP.

2016/17 – R3 409 001.00 2017/18 – R4 883 440.00 Total Identified Players 1662 Total Identified Players 1845 Players Requiring Interventions 1075 Players Requiring Interventions 1271 No. Cost No. Cost Socio-economic 335 357,817 Socio-economic 588 1,679,440 Mental 225 50,370 Mental 701 139,300 Physical 489 148,534 Physical 580 206,300 Technical 656 305,650 Technical 735 482,700 Equipment 547 2,274,001 Equipment 477 1,533,400 Education 185 205,550 Education 200 573,000 DEVELOPMENT

5. Each Hub and RPC has a coaching (CSA Level 3 Head coach) and administrative infrastructure funded by CSA at a cost of R400 000 per Hub and R500 000 per RPC. Total cost of R26 million per annum – maintenance and upkeep of the Hubs and RPCs.

6. Academic support - CSA piloted the “School in the Box” initiative at Hammanskraal in 2018 as part of the holistic development of a player and creating a community center at each Hub. The plan is to role this out to all Hubs and RPCs over the next 4 years.

7. The Hubs and RPC teams are integrated into the main schools leagues as part of the “more cricket and better cricket” strategy. The result is that in some cases the Hubs and RPCs are now playing equal to or more matches than the traditional cricket playing schools.

DEVELOPMENT

8. CSA has introduced profiled “Friendship matches” between Hubs/RPC, schools and established cricket schools supported by Momentum, with the aim of providing best possible opposition for RPC teams. Parents from disadvantaged communities are also invited and supported to attend their children's matches.

9. Through additional development sponsorship secured in the current year, CSA introduced its first ever RPC U/17 National Week. This week has now become of the Talent Acceleration Programme of CSA whereby players are identified for the next U/19 ICC World Cup. (2-year preparation process)

DEVELOPMENT

© COPYRIGHT CRICKET SOUTH AFRICA 2017 1. Continued implementation of the CSA Operational Model (aims to achieve financial Sustainability for our Members) and Stadium Operating Model (seeks to optimize the stadia’s commercial and revenue generating potential).

2. Strengthened strategic relations with key ICC Members (Australia, England & India) which led to sharing of best practice and learnings.

3. Increased portfolio of saleable properties (e.g. grassroots cricket, T20 league).

4. Significant investment carried out in the stadium upgrades to address aging stadium infrastructure and introduce latest technologies.

SUSTAINABILITY

2. Despite the change in the B-BBEE Codes, CSA remains at an externally verified Level 4 rating.

3. In effort of driving inclusivity, Disability Cricket Associations (Deaf, Blind and Intellectually Impaired) were accepted as Ancillary Members to CSA in September 2017 and are now recognised for their contribution to growing Cricket in South African;

4. EPG - The 2017 review indicated an improved position from 42% in 2016 to 67% in 2017 against National Transformation Charter, with a 50% qualification on all dimensions.

5. Gender equality – improved cricket support structures for the advancement of Women’s cricket.

TRANSFORAMTION

© COPYRIGHT CRICKET SOUTH AFRICA 2017 1. Improved brand (CSA & Proteas – #ThatsOurGame campaign) loyalty, experience, visibility and perception. 2. Tremendous increase in the profile of Women’s Cricket and launched the ICC T20 World Cup campaign #WeAreMore. 3. Improved exposure for grassroots cricket (i.e. RPCs and Hubs; cricket Weeks and other development tournaments like the Momentum Friendship Games).

4. 22.3 million TV unique viewers in the current season for International Cricket, which makes cricket second after soccer. 5. CSA remains an industry leader and has been validated externally by businesses, supporters, media and government that CSA is leading the process of a holistic transformation programme (18 nominations from the Sports Industry Awards). 6. Introduced a new brand to our stable – Mzansi Super League (MSL).

BRAND PROMOTION

2. The Indaba was led by Mr Chris Nenzani, CSA’s President and comprised of 196 delegates from its Members, Board of Directors and key stakeholders, including SASCOC and SRSA as well as diversity experts.

3. Upon reflection, not all the 2013 resolutions were achieved. However, good progress was made that has led to meaningful improvement in governance, administration, increased participation and improved playing standards

4. Following the Indaba, CSA adopted new resolutions clustered around three specific categories: Governance, Professional Cricket and Amateur Cricket.

2018 NATIONAL TRANSFORMATION INDABA

1. Improving the alignment and accountability and robust decision making.

2. Reconsider CSA’s director rotation policy.

3. Assessing the organization to address the skills gap and determine the feasibility of centralizing/ outsourcing certain activities. GOVERNANCE 4. Revising the appointment of non- independent directors to increase the Board’s wealth of knowledge, talent pool and gender representation.

5. Reassessing the current Operational Model to determine possible improvements. 6. Benchmarking CSA’s transformation progress across all B-BEEE pillars. 2018 INDABA RESOLUTIONS

1. Implementing a high- performance feeder programme to sustain performance in women’s cricket at a national level.

2. Developing black African players, batsmen in particular. PROFESSIONAL CRICKET 3. Creating a unique SA “A” Team culture based on CSA’s culture to enhance team cohesion and performance.

4. Enhancing Member Scorecard and introducing a Franchise Scorecard

1. Increasing participation, representation and quality of performance against benchmarks.

AMATEUR CRICKET 2. Developing an integrated Schools 'Cricket Strategy and engaging with relevant government authorities.

3. Emphasising women’s and disability. 2018 INDABA RESOLUTIONS

2. CSA Major sources of revenue, Broadcast Income, Sponsorship and ICC funding

3. Historically each four-year cycle consists of lean and good years from a financial performance perspective (i.e. loss and profit years).

4. CSA’s four-year financial objective is to achieve a better than break-even aggregate result to ensure the sustainability of cricket.

5. Cash reserves are maintained to fund lean financial years, product development and any other unexpected events.

BUSINESS & FINANCIAL MODEL

FY2018 FY2017 FY2016 FY2015 FY2014 Audited Audited Audited Audited Audited Rm Rm Rm Rm Rm Revenue 1526 674 822 765 811 Expenses (1219) (910) (777) (695) (634) Financial income 43 77 61 38 22 Net profit (loss) 350 (159) 107 108 199

FINANCIAL PERFORMANCE

1. CSA’s aggregate forecast result for the current cycle is a loss of circa R654m. 2. A number of programmes have been implemented in redressing historic shortcomings in CSA’s development programmes to achieve among other goals – access, excellence and meeting the EPG targets. 3. These initiatives have resulted in a significant increase in CSA’s operating expenditure. 4. Whilst these well intended and much need programmes are imperative to the long term sustainability of cricket in South Africa, CSA has been unable to secure additional revenues to fund it. 5. This is further exacerbated by the fact CSA’s projected revenue growth is anaemic for a number of reasons listed below: 1. Inadequate FTP content (touring international teams). 2. Difficult sponsorship and local broadcast market. 6. In summary, higher than expected expenditure growth and inadequate revenues.

NEXT FOUR-YEAR PLANNING CYCLE

1. Growth and thus our primary focus will be to manage or contain expenses.

2. Primarily to is to look at generating new revenues and government funding/support, further diversifying revenue streams.

FINANCIAL OUTLOOK

 Angelo Carolissen - Non-Independent Director

 Prof Shirley Zinn - Independent Director

 Prof Steve Cornelius - Independent Director

2. There are currently two vacancies on the CSA Board to be filled in 2018.

 CSA Vice-President

 Non-Independent Director

GOVERNANCE STRUCTURE

a) Sunfoil is no longer a CSA Test event sponsor - The contract came to an end. CSA is actively sourcing a new sponsor.

b) Sunfoil intends to sponsor amateur and grassroots cricket which is an important part of our development cricket.

2. Momentum Women’s Sponsorship

a) Momentum team sponsorship contract came to an end.

b) CSA is in the advanced stages of negotiating a new team sponsor.

COMMERICAL PARTNERS

© COPYRIGHT CRICKET SOUTH AFRICA 2017 1. Securing a Future Tours Programme 4. Not all CSA members are meeting the (FTP) with adequate revenue generating financial break-even objective without content. special “once-off” payments from CSA. 2. Improving playing opportunities at all 5. Development of black African batters cricket levels, building depth in the area remains a challenge and although there of black African batsmen. has been some improvement in individual performances, the overall 3. Lack of adequate cricket facilities and performances has not moved to a place access to cricket in disadvantaged areas where there is major change. at various levels.

CHALLENGES

1) Needs assessment and Player Development Plan (PDP) – ascertaining specific needs of each player and mapping out performance goals that need to be attained as indicators for improvement. 2) Performance evaluations through the PDP – ensuring that a structured and documented discussion takes place between coaches and player with the aim of providing clarity on role, performance and preparation to support the individual to succeed in the role assigned. 3) Individual interventions to address “performance gaps” identified – through the assistance of coaches and assigned specialist consultants the identified performance gaps are addressed.

4) Target within targets – the cricket system is not matured enough to self regulate on matters pertaining to transformation. CSA introduced the target within target of 2 black African batters in the top 6 of a batting line up of all representative teams at Member level as a form of creating batting opportunities for black African batters. CHALLENGE 5

5) Quality of Opportunity given in the Top 6 – a measuring tool has been derived across the pipeline system with the intent of the determining the quality of opportunity provided in relation to the role clarity and preparation to execute the role.

6) Coach Performance evaluation and monitoring the impact of their interventions – Scorecards and Performance Agreement for Coaches.

7) Pitch Vision coaching tools to assist player interventions through video analysis was introduced in the 2018/19 season to enhance the performance discussion between players and coaches.

CHALLENGE 5

1. New T20 league – completely different model to the League envisaged in 2017.

2. PROUDLY SOUTH AFRICAN PRODUCT - 100% owned by CSA.

3. 1st League in SA to name teams after cities - Six (6) spanking new city based teams and venues - Cape Town Blitz, Durban Heat, Jozi Stars, Nelson Mandela Bay Giants, Paarl Rocks and Tshwane Spartans.

4. The entire event will be broadcast exclusively live by the South African Broadcasting Corporation (SABC) on its television and radio platforms - will aid in reaching a wider audience.

MZANSI SUPER LEAGUE

1. Fans to unite South Africa with a positive outlook

2. Round robin format (home and away)

3. 32 games in total

4. Make-up of the teams - 16 players per squad with a South African marque player and International marque player per squad.

MZANSI SUPER LEAGUE

1. Assist MSL to build the profile of MSL Team Brands and local heroes.

2. Marketing and promotion of the matches.

3. Promote cities into the South African and International Market.

4. Connect the MSL teams to local course including UNICEF.

5. Financial support to the MSL to improve fan experience – world class infrastructure and match day activations.

MSL – ROLE OF CITIES

 SABC - Local broadcast partner

 Global Sports Commerce (GSC) - Official international commercial and broadcast partner for the next five years.

Broadcasted in over forty countries including the Indian Sub-Continent, Sub- Saharan Africa, United Kingdom, Caribbean, North America, Australia and United Arab Emirates.

 Other event and commercial partners - to be announced in the near future.

MSL - COMMERICAL PARTNERS

1. The MSL and its teams are fully owned by CSA on behalf of its 14 Members.

2. The MSL six teams are operated on behalf of CSA by six of its 14 Members.

3. The operations of the MSL report to CSA through its existing governance and reporting structures.

a) CSA Board Committees have oversight over the MSL operations.

b) The CSA Board has assumed responsibility of the strategic direction of the MSL in consultation with the Members Council.

MSL – Governance processes

 They have been advised that the T20GL relationship is terminated.

 They were notified within reasonable time that CSA will launch a new league in November 2018.

 Deposits received for their ownership of a team in the previous T20GL have been refunded in full.

 In addition to the aforementioned, CSA made gratuitous contributions towards costs incurred by the owners associated to owning a team and preparing for the league.

Previous – T20 League

© COPYRIGHT CRICKET SOUTH AFRICA 2017  Durban Qualanders – One owner that has not taken receipt of his deposit as well as the gratuitous expense contribution. This owner is being managed with sensitivity through our attorneys.

 They have been notified that should the future league model of the MSL provide for an opportunity for private ownership, the previous owners will be provided the opportunity to bid to own a team or part thereof, similar to the old model.

2. Previous Agency - Ortus Sports

 CSA is currently in the advanced stages of settlement negotiations.

Previous – T20 League

 Due to our prompt communication of our intention to launch a new league, the risks of the owners filing an urgent interdict are low.

 Counsel is confident that the previous owners no longer have right to the teams as no contractual agreement for team ownership was concluded. This was a suspensive condition in the 2017 tender process followed.

Previous – T20 League