(ESPNCRICINFO) – Vijay Srinivasan, a co-founder of American Cricket Enterprises (ACE) – USA Cricket’s commercial partner and parent company of the forthcoming Major League Cricket (MLC) T20 competition – has told ESPNcricinfo of ACE and MLC’s concern regarding USA Cricket’s current perilous financial situation.

USA Cricket’s debt has been an ongoing issue since the board suffered six-figure losses after the three-match home ODI series against Ireland was cancelled last December due to COVID-19. But it was highlighted once again in a letter sent out last week to all members, by USA Cricket interim board chairman Atul Rai, ahead of the next AGM tomorrow.

“We are quite concerned at the current state of the finances at USA Cricket,” Srinivasan told ESPNcricinfo. “The fact that the ICC has had to withhold funding, that gives us a lot of concern. We are here to help them out. As long as it’s constructive, positive engagement, we want to work with USA Cricket to find a way to help them work through this current financial crisis.”

Of particular concern to Srinivasan is the fact that Rai’s letter highlighted that board employees – including national team players – have gone unpaid: this, in spite of the fact that much of ACE’s payments to USA Cricket have been precisely earmarked for this purpose.

“Contractually we have an agreement that guarantees them a minimum of $8M over the first 10 years of the agreement,” Srinivasan said. “Now where we are today is that we’ve already spent close to $5M in the first three years directly to USA Cricket, which is close to $1.4M above what we are contractually obligated to spend.

“Since 2019, we’ve spent $1.7M on player payments directly to players. So, when we read things in Atul’s mail that they are not able to pay player salaries, it’s a little bit concerning given that we currently pay seven of the players on the USA men’s team.”

“We pay them 5% off the top. We take 100% of all the costs; we take 100% of all the losses. All the exposure is ours. So I think it’s an immensely fair deal.”
According to Srinivasan, ACE has also given USA Cricket an additional $800 000 as “discretionary funding” that is outside the scope of the contracted $8M. Yet even with this additional money, Srinivasan says that the details of the issues outlined in Rai’s letter caught his attention.

The root cause of the situation was that Ireland series. What started off as a momentous occasion for USA – they recorded a win in the opening T20I, their first over a Full Member – turned into a financial catastrophe when the three scheduled ODIs were shelved after a COVID-19 outbreak in the Ireland squad.

Though USA Cricket was not in debt at the time, it also did not have the requisite cash on hand to host the Ireland tour and needed ACE’s intervention. As part of ACE’s commercial agreement with USA Cricket, there is contractual wording that states that ACE will manage all commercial activities for ODIs and T20Is that USA hosts.

However, when the opportunity with Ireland was presented to ACE, there was some pushback over the costs of staging the series with several board sources stating that ACE did not give their full backing to go forward with the event.

Srinivasan confirmed ACE’s hesitancy, but says it was based on projected budgets to stage it during the Christmas holiday period in Florida, a peak cost destination during that time of year. Bio-bubble guidelines in place at the time also escalated costs.

“Let me be completely clear on one point. The opportunity to play and host a Full Member was super exciting for us,” Srinivasan said. “As we got more details… we felt that the projections were too rosy and that it would fall well short of being a break-even event. We felt that the revenue projections were not realistic, so the shortfall would be much larger than they expected us to cover. And the timing of it and the location of it, we felt the costs were going to be too large to fund.”

“So what we did say was that we would forego any of our revenue shares. We said USA Cricket could keep 100% of the revenues and we would provide an advance – since their feeling was that they could break even on this – and when you get revenue back, just pay us back.”

In the end, Srinivasan says ACE provided a $150 000 advance on future disbursements. ACE also covered the costs of sending two staff members to help run on-site operations and logistics for the series. But only the two T20Is were played, triggering heavy losses.