As the England and Wales Cricket Board (ECB) launches the fourth season of The Hundred, discussions around the privatization of the tournament’s eight franchises have intensified. The ECB’s plan involves selling a 49% stake in each team to private investors, while the remaining 51% will be retained by the existing ‘hosts’ – seven counties and the Marylebone Cricket Club (MCC) for London Spirit.
Reservations About Minority Stake
This proposal has drawn interest from owners of several Indian Premier League (IPL) franchises. However, many express reservations about the minority stake being offered, fearing it could lead to a lack of control over the franchises.
Concerns Highlighted by IPL Franchise Official
The concerns were highlighted by an official from an IPL-winning franchise, who preferred to remain anonymous. “In all other franchise investments, we are 100% owners. Here, it’s going to be a joint venture. There’s valuation, ownership, and operational matters to consider – these issues come to the fore immediately,” the official said.
ECB Acknowledges Investor Concerns
Vikram Banerjee, the ECB’s Head of Business Operations, acknowledged these concerns. During his trip to India for IPL 2024, he met with various franchise owners to discuss the proposed model. “For a number of them, it’s around things like brand, control of cricket operations, and majority stakes from an equity perspective,” Banerjee explained. “We understand where they are at and have built that into the process.“
MCC and Surrey’s Stance on Stake Divestment
Among the eight franchises, the MCC has stated it will consider selling part or all of its 51% stake, pending approval from its members. In contrast, Surrey, the owners of the Oval Invincibles, have declared no intention to divest any of their stake.
Possibility of 100% Ownership
Richard Gould, the ECB’s Chief Executive, did not rule out the possibility of investors acquiring a 100% stake, provided they meet various criteria. “There’s certainly the opportunity for people to have, potentially, 100% ownership,” Gould stated. “It depends on the capabilities they bring in terms of finance and operational delivery.“
Importance of Chemistry in Joint Ventures
Venky Mysore, CEO of Kolkata Knight Riders (KKR), emphasized the importance of chemistry between investors and existing stakeholders. “Ultimately in any joint venture, it boils down to the chemistry recipe,” Mysore said. “The existing shareholder group has existed for 100-plus years, and suddenly, you have a new investor coming in. Can you work together? Because this is for the long run.“
Open Approach to Minority Stake
A couple of IPL franchise owners, however are more open to starting with a minority stake. A CEO from another IPL team mentioned that a 49% stake would be a good starting point, with the option to increase their investment gradually. “The key question is how much that 49% constitutes of the overall value. If that number is too huge and I’m not sure of the returns, I’d rather take a small share to begin with, with the option to increase my stake over time.“
Balancing Control and Investment Value
The ECB has clarified that the highest bid will not necessarily win. They seek partners keen on supporting the growth of the game at all levels, beyond just financial contributions.
As the formal bidding process approaches, starting mid-September, the future of The Hundred and its appeal to IPL franchise owners hinges on balancing control, investment value, and operational harmony.
The Sportz Planet Desk,
Atharva Shetye
