Cricket South Africa met with the Western Province Cricket Association’s members council at Newlands on Tuesday, 31 October 2023.
CSA were represented by president Rihan Richards, chief executive officer Pholetsi Moseki, chairperson Lawson Naidoo and chief financial officer Tjaart van der Walt at Tuesday’s extraordinary meeting.
WPCA president Johannes Adams attended. WPCA chief executive officer Michael Canterbury was absent.
Non-independent director Niyaaz Ebrahim presented WPCA’s multiple financial challenges, including a R238 million debt with Standard Bank and R50 million with CSA.
Richards, Naidoo, Moseki, van der Walt and Adams then addressed the members council, including 60-plus representatives – largely chairmen – from cricket clubs around the Western Province.
‘Seriously difficult financial position’
“It is due to the urgency of the nature of the situation that we are here. It is our job to look after the best interests of cricket in South Africa – and our affiliates. We needed to act urgently,” said Richards.
“It has been a pleasure to work with the WPCA president, his board and the WPCA CEO. The reality is Western Province cricket is in a seriously difficult financial position and we are here to propose things that could help.”
‘Get Newlands into shipshape’
Newlands will host the Proteas’ Test against India in early January 2024 – and several matches during the second edition of the SA20.
“The presentation you have just seen exemplifies the scale of the problem facing Western Province cricket. We have a common understanding of the scale of the problem that the WPCA faces at the moment,” said Naidoo.
“The proposal that we, as Cricket South Africa want to make, looks at the nitty-gritty and nature of the cashflow problem that is faced as well as the deficit situation in which Western Province cricket finds itself at the moment.
“We have to look at this from two perspectives. There is the short-term imperative – there are two big events being staged at this stadium in two months’ time. We have the new year’s Test with India and then the SA20 tournament.
“This stadium – with the maintenance that needs to be done here – we need to get Newlands into shipshape. There needs to be short-term intervention to do that. There needs to be intervention in the longer term, too, to try to get Western Province cricket back on an even financial keel over the next few years, starting from next year.
“This is about a process. This is about Cricket South Africa saying this is an iconic ground and an important affiliate of Cricket South Africa – we need to walk this road with you to try to get over this hurdle you face at the moment.
“Yes, there is going to be a financial injection from Cricket South Africa – it’s not going to be a bailout. There are going to be conditions attached and they may relate to the dilution of your equity holding in the property development at the stadium.
“What is being proposed is fair and reasonable and will actually help Western Province cricket out of the hole it’s in at the moment. I want you to see this as us, as Cricket South Africa, saying we don’t have all the money you need, but we can provide some short-term access to funding. And we will work with you in the longer term to get this show on the road again.
“Treat it in that spirit. It’s not about coming in and taking over the running of Western Province cricket. It’s about working with Western Province cricket. We’ll bring the expertise we can, but also from other stakeholders in the game to try to make this work better.
“This offer that is on the table, I must say, remains under discussion and hasn’t yet been approved by the board of Cricket South Africa. I will take this to our board in due course and I’m hoping I can convince them that this is in the best long-term interest of cricket.”
‘WP cricket needs and can get a big sponsor’
Van der Walt outlined CSA’s proposal to fund the WPCA approximately R26 million – and help attempt to secure sponsorship after the exit of former Western Province title sponsor Six Gun Grill earlier this year.
“The key thing is to see things through for the two key events at Newlands – the new year’s Test and the SA20. The proposal is to see Western Province Cricket through, from a cash perspective, through to the end of January 2024. We are looking at a number of about R20 million, of which four to five million will be injected into the stadium to get it into the right short-term shape for the two big events,” said van der Walt.
“After that, it’s to see things through to the end of the financial year at the end of April, when there will be about another R6 million. So we are looking at roughly R26 million as a funding injection. During that period, until April, we will work with Western Province cricket to look at the costing structure and look at things from a sponsorship perspective – we can get our commercial team involved.
“The reality is, if you look at this stadium and the history of Western Province cricket, even recently with the team winning the One-Day Cup final, it needs and can get a big sponsor because of the history here. That is going to be another key element of the whole process. We can’t save toward a profit. We need the revenue side to be looked after as well.”
‘Quite a dire situation’
Moseki reiterated Naidoo’s statement that WPCA will likely cede equity to CSA amid the ongoing property development at Newlands.
“I’m grateful to the members council for meeting with us. I know there was probably some consternation felt by some people. The seriousness of the situation has demanded that we work with Western Province cricket. Colleagues, I want to emphasise that it is quite a dire situation that is facing cricket in the Western Province,” said Moseki.
“We have to have a business rescue mentality. Each and everyone of this room is going to be in pain for this to work. What that pain will look like, we will determine over the next few months. There is a lot of work that needs to happen and CSA will appoint someone to work with Western Province over the next few months.
“We do hope that you will support this process. It was important that, instead of just meeting with the WPCA board, we needed to get the buy-in of the members council as well. We need to come up with a solution because the first few months of this is really about survival in the short term. In the long term, it’ll be about finding ways to get Western Province to thrive again. We are in this together. We are with you in this journey.”
‘We don’t mind dilution in our equity’
Adams suggested the WPCA are comfortable ceding equity to CSA. Representatives from Hanover Park Cricket Club and Primrose Cricket Club, meanwhile, asked how much equity will likely be ceded. Adams and Moseki, however, did not know the dilution percentage – and pledged to let the members council know soon after liaising with Ebrahim and van der Walt.
“CSA are looking to give us a lot of money for the short term. We can’t just get money and give nothing in return. That is why there will be dilution in our equity, which we don’t mind because it stays in cricket – rather CSA than somebody else. While CSA will have someone work with us, we will also appoint someone to work with them. We need a commercial person for this role to help maximise our commercial potential,” concluded Adams.