USACA announced on Thursday that it had signed a deal worth $70 Million with Global Sports Ventures, LLC.  “USACA is thrilled to announce a commercial partnership with Global Sports Ventures, LLC to bring this long adored sport stateside, and are confident in their ability to grow the sport in the United States,” said Gladstone Dainty, President of USACA.

USACA announced on Thursday that it had signed a deal worth $70 Million with Global Sports Ventures, LLC.  “USACA is thrilled to announce a commercial partnership with Global Sports Ventures, LLC to bring this long adored sport stateside, and are confident in their ability to grow the sport in the United States,” said Gladstone Dainty, President of USACA.

The news was received rather lukewarmly by the cricket community.  One cannot blame us for not being as 'thrilled' as the folks at USACA.  There is a familiar ring to these announcements, which as some of us have noticed, mostly occur before an election or an important meeting.  

Just like that famous fable of Aesop – The Boy Who Cried Wolf, people have started to shrug off these news releases.  In the words of one mid-western cricket administrator – he was playing with his toddler when he saw the headline flash on his phone.  He did not bother to pause and read.  “I just went back straight to playing with my daughter.”  A well known cricket commentator wrote on the 'Cricket in the Americas' Facebook page: “Grab the popcorn… and KoolAid.”

Why such skepticism?  After all, the cash-strapped cricket organization could benefit from a $70 million bonanza.  For starters, here is a fact.  In aggregate, USACA has signed deals totaling some $200 Million over the last decade under the leadership of Gladstone Dainty.   During the period, the value of the rights (on paper) associated with commercial rights has tripled from $1 million per year to $3.5 million per year.  Of course, not a ball has been bowled in a T20 league borne from these rights.

For those who are unfamiliar with USACA’s deal-making expertise, here is a more detailed overview:  

Centrex (2007): The organization signed the first of its many deals over the last 10 years with Centrex International in 2007.  Under the deal terms, USACA and Centrex were to enter into a joint venture that was to “revolutionize the way cricket is marketed in the United States.”  The joint venture was to handle sponsorship, broadcast, media, promotional, merchandize and new media.  In return, an amount in excess of $10 Million was to be invested over a 10-year period in USA Cricket.  “This is about investing and building a sport from grass roots up,” Archie Patron, a director of Centrex said at the time.  “This will have a great impact on cricket in the USA,” Gladstone Dainty noted.  According to USACA tax statements, Centrex contributed a total of $25,000 in 2006 and 2007, before the deal vanished without a trace.

NACL / American Premier League (2009): In 2009, NACL claimed that it had reached an interim deal with USACA granting NACL an exclusive period of negotiations to promote and organize an official USACA-sanctioned T20 league.  Rubbing salt (NACL is salt, sorry for the pun) into the wound, the organization noted that USACA had induced it to make monetary payments and donations while assuring it that it was negotiating in good faith.  The entire saga ended up in the New York court system, the status of the case is unknown.

Cricket Holdings America, LLC (2010):  In 2010, USACA signed its next mega-deal, this time with Cricket Holdings America LLC (CHALLC).  The CHALLC deal was received with cautious optimism, primarily because of the involvement of New Zealand Cricket.  This deal was valued at $80 million to $100 million, and USACA stood to gain $2 million in each of the first three years and there was a $3 million bonus if CHA could persuade another investor to join.  Not much is known regarding the reasons for its eventual demise.   USACA announces births of deals at regular intervals, but rarely posts obituaries.

Overseas League Club Limited and OL Foundation (2015): In 2015, just days before the last USACA election, USACA announced that it had entered into a multi-year partnership with an entity called Overseas League Club Limited that was to “deploy large capital sums through 2019.”   Precious little was revealed about the deal.   The news release said that the Overseas League Foundation would become a “key underwriter for youth cricket development programs over the next four years” and detailed plans were to be announced “in the next sixty days.”   The fate of this deal too is unknown.  

American Cricket League (2016): At the start of the year, an individual claiming to have USACA’s consent began shopping a deal involving rights to the American Cricket League to investors seeking investments totaling over $61 million, with an initial investment of $500,000 to address compliance issues.  Not much was heard regarding the deal and it appears that these efforts did not reach fruition.  However, there are some interesting similarities to the present deal (or what little we know of it).

Global Sports Ventures, LLC (2016): That brings us to the latest $70 million deal with Global Sports Ventures LLC (GSV).  'The deal between USACA and Global Sports Ventures, LLC will professionalize the game of Cricket in the U.S., providing American athletes the opportunity for a professional career in cricket,' the USACA press release noted.  

When asked about the plans, Jay Pandya, CEO of GSV, said: “I cannot get more specific into confidential agreements."  Adding, "we want to make sure that the product is 100% correct before we market it.”  Later on, he confirmed that the deal entailed T20 rights.

What is even more interesting is the deal's timing.  For it was announced two days before scheduled meetings were held over the weekend by ICC Chairman and top directors with USA stakeholders in New York and just days after a recording of a USACA board conference call was uploaded to SoundCloud offering some clues about the thinking behind it.  

In that eventful call, Gladstone Dainty, the President of USACA, told his board: “This matter with the ICC is taking off in another direction and it can be very costly for us to steer."   He then laid out his plan for the use of funds.  Mr. Dainty said that he would have liked to use the money for players and participants.  “However, I think with what we have gone through in the past, I would say 15 months or maybe even 3 years, I think we should prepare ourselves to use those resources in any way or form to make sure that justice is done,” Dainty said, referring to ICC's suspension of USACA.  

Some additional details were presented during the board meeting: “There is a gentleman out of New Jersey - Philadelphia who is interested in doing T20 cricket.  He is prepared to pay us $3.5M a year for those rights.  And he is quite aware of the difficulties we have been having with the ICC.”

“He knows if we have to spend the money on lawyers, he is quite aware of that as a matter of fact, he has promised that he has got some big lawyers also, he is prepared to put in hundreds of millions or whatever to support us to make sure justice is done.” He added later on in the meeting: “Even for me, you know, I think that, I am not looking forward to beating the ICC.   I am looking forward for the USACA to get justice and get reinstated to its correct position.”  However, he warned that if it became necessary, he was not only going to beat the ICC, he "will smash them if that is what it takes."  

So that is the background for this latest deal.  

Editorial comment:  Under ‘normal’ circumstances and in a mature cricket market, this deal would certainly have received widespread support.  If there was a modicum of big-match infrastructure (perhaps 3-4 stadiums), a growing base of mainstream American fans who have been introduced to the product through broadcasts of international cricket on TV (not via some esoteric web-stream), and a commitment to participate in these T20 matches by recognizable stars, perhaps there is a case for USA T20 rights fetching millions of dollars.  You have to sow the right seeds and hope for the right conditions before you dream of harvesting a bumper crop.  

Also, I did some rough math on the perceived value of these rights.  Now, I know the value of IPL to BCCI and the value of USACA's T20 rights are not quite comparable.  As I have noted before, we don't have a tested and true T20 product here nor do we have the access to the players or the TV-watching audience that IPL has.  However, if you apply the actual profit-to-valuation ratio of IPL for a recent year to this deal (Source: Duff and Phelps), you will conclude that USACA must already be realizing a net profit of $1 million per annum from domestic T20 cricket games in order to justify a $70 million valuation for the domestic T20 rights.  

Leaving my own beliefs aside, I would still cogratulate USACA on its efforts to unlock a greater value than my math suggests, but I would do that if there was a visible effort on USACA's part to make itself responsive to USA's cricket community and to the organization that it is a member of.

I would also applaud its efforts if USACA mended its woeful track record in delivering cricket services and communicated regularly to the wider public regarding its efforts to meet the all-important reinstatement conditions laid out by the ICC – including the requirement that USACA incorporates the recommendations made by TSE, an independent consulting firm, regarding its governance structure.  [To refresh everyone's memory, this condition had to be met by October 2015 and a fresh election had to be conducted under a new constitution by June 2016. We have not seen that happen.]

Until then, I will just join the ranks of the many skeptics.