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ECB should seek private capital to prop up Hundred, says report

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Published in Cricket
Tuesday, 28 April 2020 04:15

The ECB should consider selling equity in Hundred teams to private investors to lessen the financial hit it faces from the coronavirus pandemic and to attract an Indian fanbase, according to a new report from a sports consultancy firm.

The Hundred's current model is similar to that used in the Big Bash, with independent boards running the eight teams under the governing body's jurisdiction. But the report by Oakwell Sports - who advised private equity firm CVC on its investment into Premiership Rugby and recently brokered a AUS$250 million line of credit for Australia's NRL - suggests that the competition's costs could be significantly reduced if stakes in the teams were sold to investors using a franchise model.

The Hundred is set to cost the ECB £58.4 million in its first season - including payments of £1.3 million to each county and £11.3 million in playing and support staff salaries - against income of £51 million, and is not expected to break even until its fifth season. The report suggests that a substantial proportion of these could be footed by turning central payments to the counties into equity stakes and looking to attract investment - particularly from India.

The report, entitled 'The Impact of Covid-19 on English Cricket', states: "The ECB should consider converting its revenue distributions to counties into equity stakes and gifting these to each county. Therefore each Hundred franchise would own its revenue distribution % as an equity stake too.

"This has real capital value for a county. This will attract potential private capital into buying stakes in Hundred franchises and help counties fund the overall game."

ALSO READ: Case for Hundred "greater than ever" due to Covid-19 - Harrison

It is likely that there would be no shortage of interest from Indian investors if the Hundred were to open itself up to a franchise model. Two teams in the Caribbean Premier League are owned by the parent companies of IPL teams - Trinbago Knight Riders (Kolkata Knight Riders) and St Lucia Zouks (Kings XI Punjab). Red Chillies Entertainment (KKR owner Shah Rukh Khan's company) had also purchased the Cape Town franchise in the aborted Global T20 League in South Africa, while Delhi Capitals' owners GMR Sports were also due to own a team. In 2008, Hampshire became part of Rajasthan Royals' 'Royals 20/20' venture, albeit little came of it.

The report adds: "The Hundred needs to be able to attract Indian players and subsequently an Indian fanbase, too. The Indian subcontinent constitutes 90% of the 1 billion cricket fans aged 16-69 globally.

"Indian investment into the Hundred, including from IPL team owners, may facilitate the involvement of Indian players in the longer term. In addition to generating revenue out of India, this would be vital in unlocking the south-Asian UK-based fanbase."

Currently, the BCCI does not allow Indian players to take part in overseas T20 leagues, and while there is little prospect of Virat Kohli or Jasprit Bumrah playing in the Hundred, some older players may be interested. ESPNcricinfo revealed last October that Harbhajan Singh had put his name forward for the Hundred's inaugural draft, but withdrew after the story broke fearing he would be unable to continue playing for Chennai Super Kings, while Yuvraj Singh said it "could be an exciting format".

The Hundred's inaugural season is likely to be postponed at an ECB board meeting on Wednesday, with little appetite to launch the competition when it seems unlikely that overseas players will be able to take part or that fans will be able to attend games. Chief executive Tom Harrison denied that the tournament's future was in doubt on Friday, suggesting that the case for its existence was "greater than ever" on account of the Covid-19 pandemic.

The report's other recommendations include the ECB borrowing against its broadcasting contracts and lending money to help the counties survive expected combined losses of more than £85 million. A spokesperson clarified that the reported was not ECB-commissioned.

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