Fears are growing that the Hundred will not generate the cash injection that English cricket is depending on with a series of potential investors losing interest.
Plans to sell off stakes in the eight Hundred teams for up to £500 million to provide a vital new source of cash for the English professional and grass-roots game have been thrown into jeopardy by counties’ refusal to give away any of their share.
The England and Wales Cricket Board plans to go to market in September, with a view to deals with investors being confirmed later in the year. But investors have been left deeply frustrated by the process so far, with one representative from an Indian Premier League side lamenting that “the numbers don’t stack up” and were “delusional”.
Expectation is growing that, unless there are dramatic changes, the ECB will fall several hundreds of million pounds short of its previous hopes, leaving the game’s financial crisis in the country unresolved.
Potential investors have expressed concerns about:
- The majority of counties pushing to keep full control of cricket operations
- A lack of clarity from the ECB
- Counties’ veto power over who could buy stakes in teams
- Indications from most counties that they plan to hold onto their full 51 per cent majority stakes
- The lack of guarantees about the full availability of England players
- Fears it could take decades for buyers to see a return on investment
A number of potential investors contacted by Telegraph Sport, who in many cases are already part of other major franchises around the world, have said that they are not currently inclined to bid. One party with knowledge of the situation described it as a “car crash”.
The plans for the sale will see the ECB hand 51 per cent of the eight teams to the host county – or club, in the case of MCC at Lord’s. The remaining 49 per cent would be sold to private investors by the ECB, with the host county welcome to sell as much or as little of their share as they please.
Proceeds might not cover existing debt
The proceeds of stakes in the Hundred will be divided up between the 18 first-class counties, MCC and the recreational game. It was envisaged that the sale would secure the future of the county game for generations to come. Yet it is now thought that the proceeds might not even cover existing debt levels among some counties. Total debt in the county game is estimated to be nearly £200 million.
Talks are ongoing between the ECB – who are being advised by Raine Group and Deloitte – and potential investors. Raine managed the recent 25 per cent of Manchester United to Sir Jim Ratcliffe’s Ineos as well as the 2022 sale of Chelsea.
This year’s Hundred competition begins on Tuesday, with interested parties using the season to assess the tournament before deciding whether to bid for teams in September.
“So much detail is missing and yet the timelines are rather optimistic,” said one member of the ownership group of an IPL team. Another figure, who owns a major team in a different league, said that the ECB was handling the process “so badly” and there was “a big lack of clarity,” with “lots of questions” remaining.
Investors contacted are unclear whether they were only allowed to use the grounds on match days, or would assume control of the venues for the duration of the tournament – potentially allowing these to stage other events.
The preference for those who own existing franchises elsewhere in the world is to run the cricket among the men’s and women’s Hundred teams.
“Anyone investing in a cricket team wants to run it, especially if they have other teams,” said one potential investor.
Some counties want strong representation of their players in Hundred teams
Some Hundred teams have privately indicated that they might be willing to cede control of the cricket side of the operation, notably Northern Superchargers and London Spirit.
But conversations between potential investors and counties have indicated that a number of county officials would push to retain clear links between the host counties and the Hundred side. There is a clear desire among some counties to ensure a strong representation of their own players in the Hundred team who play at the same venue.
IPL sides have long let it be known that they are keen to buy a controlling stake in Hundred teams, replicating the model under which they have invested in other leagues. Without such a controlling stake, Hundred sides would be far less attractive.
One figure estimated that a 49 per cent stake of a Hundred team would only be worth about 25 per cent of a complete stake – so, if a side was hypothetically valued at £100 million, they would only be prepared to pay £25 million for a 25 per cent share.
So far, investors report that only a couple of Hundred teams have indicated an openness to selling any of their 51 per cent stakes. One source suggested that if private investors bought in the region of 60-70 per cent of teams they would gain sufficient control while also ensuring that counties still had a financial stake in the sides.
A further barrier for some investors is that they believe that the ECB expects all money to be paid up front – rather than in instalments over several years. With the average Hundred team making in the region of £500,000-a-year, it could take decades for investors to earn back their initial payment. Investors in sports teams generally expect to be in profit within a decade at the most.
Hundred needs to attract more star talent
Some IPL investors have been put-off by the ECB indicating that they envisage only around four of the eight teams being sold to IPL owners. Last year, the Women’s Premier League – a women’s version of the IPL – launched in India, with a blind auction, which was credited for maximising the value of the teams.
But with counties retaining veto power over who buys the stake in their sides, a group could be the highest bidders for a side but be rejected. An alternative suggested to Telegraph Sport would be for all prospective owners to be vetted before being allowed to bid, with the bids then determined by the highest financial offer.
Potential investors are conscious of the need for the Hundred to attract more star talent, with the league facing heightened competition from the USA’s Major League Cricket and other tournaments. This season Pakistan star fast bowler Shaheen Shah Afridi signed for Welsh Fire but withdrew from his contract after he was offered more money to play in Canada’s Global T20 League, as Telegraph Sport first revealed.
Australia captain Pat Cummins, who has never played in the Hundred, recently signed a four-year contract with Major League cricket.
The top salary band for players in the Hundred is currently £125,000, with a £10,000 top-up bonus for captains. Investors believe that salaries for top players need to reach £300,000 per year to guarantee that the world’s leading talent is available for the competition and realise the ECB’s ambitions of making the Hundred the second-best short-format league in the world.
Some potential investors own franchises in multiple leagues and would be keen to guarantee that these players could appear for their Hundred team. This would entail a shift in player recruitment rules, enabling Hundred sides to contract players independently of the draft.
With no current prospect of India players appearing in the Hundred, the complete availability of English players is a major priority for potential investors. This year’s Hundred clashes with the third Test between England and West Indies. Prospective investors would like a window cleared for the competition.