Mark Dennis will be a name few remember in American cricket in 10-15 years, but as the saying goes, if you know, you know.
Earlier this week, the trustee in USA Cricket’s bankruptcy case submitted, through attorneys (the only way he can act in court), two motions for court orders pending that will lay the groundwork to reshape the organization: a settlement with American Cricket Enterprises over the Venu Pisike-instigated dispute and termination of the ACE agreement, and a motion to reject the employment agreement of CEO Johnathan Atkeison. These are significant steps, and they put significant documents into public record, including the Holy Grail of American cricket: the ACE-USA Cricket term sheet that created the foundational relationship of America’s modern cricket landscape.
Atkeison’s dismissal in some form or fashion was probably inevitable. The CEO of USA Cricket - whose employment agreement is also now public record - received a base salary of $190,000 that jumped to $207,000 on August 1 of last year. That’s actually less than the $237,000 Iain Higgins was making as CEO in 2020, which, inflation-adjusted, would be more akin to $299,000 today. Atkeison has received a fraction of his salary owing to a bankruptcy-induced furlough, and it’s safe to say he didn’t hit the criteria for any of his potentially substantial bonuses that, if they were all achieved in one year, would amount to 110% of his base pay. Most notably among those, getting National Governing Body status with the USOPC would have netted the CEO a one-time 35% bonus, which would have been $66,500 in the first year of his contract. His contract is set to expire at the end of July, and he has filed a motion with the court as a creditor asking for approval of an $88,426 administrative expense claim consistent with what Atkeison would be owed in wages since the bankruptcy.
What made the change inevitable wasn’t so much the lack of funds, but the need for a complete administrative reset as Dennis changes how USA Cricket functions internally:
The Trustee’s central goal in the Bankruptcy Case is to position the Debtor to regain its standing with the ICC by strengthening the Debtor’s internal governance structures and stabilizing its finances. To achieve that goal, the Trustee plans to reform and reconstitute the Debtor’s board of directors and implement meaningful operational changes. Rejecting the Employment Agreement advances this business objective by freeing the Debtor to select its management team going forward and allowing the Debtor to shed a costly executive employment agreement that it can no longer afford.
This is perhaps the one thing everyone in the US cricket ecosystem can agree on: USAC needs significant constitutional reform as well as better checks and balances in its governance and stronger accountability to membership (the basis of which needs to be much harder to manipulate). It will be intense work that will require some level of expertise in cricket that Dennis freely admits he does not have, which is the first responsible thing anyone governing cricket in the United States has said in a while. Exclusively depending on “cricket people” may turn out to be more of a hindrance than a help, though, because they have proven to be a bit… eccentric in the way they approach sporting governance. Dennis’ attorneys have filed a motion to allow USA Cricket to hire a consultant, Fawwaz Baksh, through his company Jafab LLC, to assist in the restructuring process Baksh’s name might sound familiar - he was the tournament director for the 2022 U19 World Cup in the West Indies and, more importantly, for the 2024 T20 World Cup. That… could have gone better.
The other motion, and the more consequential one, seeks approval for a resolution to the dispute with ACE that set off the bankruptcy in the first place over the termination of the 50-year deal between ACE and USA Cricket by the Venu Crew. The settlement will see USA Cricket get access to up to $1.6 million in liquidity from ACE in various forms to assist with exiting the bankruptcy, including an escrow for administrative costs prior to the trustee’s takeover of USAC and a sizable amount that becomes available on the effective date of a Chapter 11 reorganization plan - something we still don’t have, but this agreement is engineered to clear the way for such a reorganization. The money is essentially a bridge to get USA Cricket back on its feet and back in good standing with the ICC while ACE gets assurance that its agreement with USAC will be upheld by fresh governance. In exchange, USA Cricket agrees to ensure the term sheet that forged the agreement is implemented.
As part of their motion, the trustee’s attorneys submitted the ACE-USA Cricket term sheet into public record. You can read it here, although it may undergo some changes in the near future; as part of the settlement in bankruptcy court, ACE is committing, in writing, to negotiate in good faith on a long form agreement which will supersede the term sheet. That was supposed to happen shortly after the term sheet was signed, but the “Definitive Agreement” never materialized, and the term sheet became the Definitive Agreement in accordance with terms laid out therein.
That has left some vague language in place on certain key points, as well as some… interesting provisions. The obligation for six stadiums that fell through after construction costs skyrocketed post-COVID has been well covered in the past, but the whole section on “Cricket Infrastructure” is vaporware. The deal allows MLC to expand to eight teams for 2026, which is in the works, and to 10 teams in 2030, but also provides for the league to expand to up to a whopping 32 teams over the full 50 years of the agreement. That’s in line with its American sporting contemporaries, but that is a staggering number for cricket. For reference, there are currently 62 List A-caliber T20 franchises on the entire planet. The term sheet also includes a provision that ACE guarantees domestic broadcasting of US men’s national team matches while USA Cricket says Willow as it existed in 2019 is sufficient to fulfill that obligation. Prem Jyotish today, Prem Jyotish tomorrow, Prem Jyotish forever.
The provision that stuck out to me, though, is the matter of who controls USA Cricket’s money. Section 21 puts restrictions on how ICC distributions get spent. Here is Section 21 of the term sheet in its entirety (emphasis added by me):
All ICC Revenues received by USA Cricket will be apportioned as set out below:
The ICC Revenues in the period January 1, 2020, to December 31, 2020 (excluding any loans, special grants or one-time payments) will herewith be
referred to as the "Baseline Annual ICC Revenue". This amount (adjusted for inflation each year per benchmark US index) will be retained and utilized by
USA Cricket in its sole discretion.In each year of the Term beginning from January 1, 2021, any ICC Revenues in excess of the Baseline Annual ICC Revenue, will herewith be referred to as
the "Additional ICC Revenue". The Additional ICC Revenue in each year (starting in 2021) will be apportioned as follows:
a. 10% of the Additional ICC Revenue will be retained by USA Cricket, and utilized in its sole discretion;
b. 90% of the Additional ICC Revenue will be retained by USA Cricket. However, USA Cricket shall not use, spend, or encumber these amounts until the Parties reach a new, separate Definitive Agreement which shall specify how the funds are to be utilized or pledged. In the event that this Term Sheet becomes the Definitive Agreement, subject to the conditions set forth in Section 20, USA Cricket cannot use, spend, or encumber these amounts until the Parties reach a separate agreement in writing concerning their use.
Generally, the Parties envision that USA Cricket will be able to spend these amounts exclusively on activities and costs which constitute the USA Cricket Outlay. Subject to an agreement, ACE will provide a rate card to USA Cricket and offer Most Favored Nation pricing to all activities and costs. Further, ACE, or the JV, as applicable, may specify that USA Cricket shall spend any Additional ICC Revenue that has not been allocated as stipulated in this Section, on any of the activities and costs in Section 5 (Cricket
Infrastructure).
Given the growth in ICC revenue distributions for Associate Members, even with its funding being managed by the ICC, that 90% of Additional Revenue is likely a substantial amount of money.
While I think the intent of this was to ensure that USA Cricket and ACE were investing jointly in the national teams, Section 3.8 sets the “USA Cricket Outlay” as the responsibility of ACE, not USA Cricket. Section 21 requires USA Cricket to spend a portion of its ICC distributions on the same outlay. It does not explicitly separate ACE’s mandatory financial commitment from USAC’s mandatory resource allocation, it only says those costs are ACE’s responsibility… meaning ACE could, under the terms, subsidize its national team-related expenditures with ICC distributions. It makes a degree of sense on ACE’s part, given that USAC would likely use those funds on the national teams either way. Tying up ICC funds with a third party like that likely wouldn’t sit well with the ICC, though, which has raised concerns about some of the language in the term sheet according to the settlement currently before Judge Romero in Colorado. I would not be shocked to learn that this was one of, or maybe even the language they were concerned about.
It’s worth noting that this probably wasn’t supposed to be quite so lopsided because this wasn’t supposed to be the final deal. Section 3.12 even says, “Parties will endeavor to remove such approval language as the use of funds is made more explicit in the Definitive Agreements.” Backroom shenanigans created an environment that disadvantages USA Cricket in what is supposed to be its tentpole partnership. The whole process became such a mess because of USA Cricket’s infighting, but now a trustee with fiduciary duty to USA Cricket is in charge of the negotiations instead of a cloak-and-dagger cabal of eccentrics. Negotiating that new Definitive Agreement offers a chance to water some of these provisions down or make them harder to manipulate. Two good faith parties can probably iron out the rough spots in the term sheet to forge a lasting pact that makes a lot more sense for everyone and puts this nightmare behind us.
We should know more about what this will look like in May. In the meantime, today is the final day of the Houston Open. I’ll have more on that soon.