💰The £425m Plan to Save English Cricket

Lyon have been relegated to Ligue 2.

Subscribers to the The Long Play will know that I have spoken on the unsettling trajectory of French football a lot in recent months.

The August 19th edition of this newsletter was appropriately titled “Ligue 1 is in a downward spiral”.

This shortform video gave you a visual explainer as to whats happening.

Lyon, owned by John Textor (another man we have discussed recently on TLP) are reportedly in €500m of debt. It’s a sad state of affairs in France at the moment and one that we will be hearing about a lot more in the coming months.

Back in the UK, the English Cricket Board are doing everything they can to prevent instances like Lyon in domestic cricket. Today, we explore their innovative approach to the long term future of the game.

From the outside looking in, English cricket appears to be in a healthy place.

Domestic broadcast deals are healthy and stable. Grassroots participation is growing across the country and the Women’s game is bigger than its ever been.

Despite these signs however, many domestic teams are struggling financially with a handful in dire need of investment.

To give you some perspective, Leicestershire are a county in England’s second division. This is their PL going back the last 5 years:

And theyre not the only ones either.

Glamorgan are Wales’ first and only First Class Cricket county. They’re a smaller club and thus they struggle to attract investment at the scale of some of their contemporaries. 

To combat this they spent a lot of money in the mid-2010s working on their stadium (Sophia Gardens) in an attempt to attract international cricket to the ground. This worked initially but racked up Millions in debt which they’ve struggled with ever since. This is their P/L in the last 5 seasons:

Not pretty.

So how do they plan to fix it?

The ECB have watched the IPL create billions in asset value for the BCCI over the last 15 years and created a tournament for themselves.

Their plan was a simple one.

Create and own all teams in the competition. Sell a big corporate sponsor to the brand the tournament. Pack the stadiums every match with people of all ages. Sell the teams to private investors. Re-invest that money back into the game and to those like Leics’ who are struggling.

That competition is The Hundred.

In theory, the plan is working and where we are right now is where the plan gets particularly interesting.

The ECB is now looking to sell its stake in the teams it owns.

How it works is as follows:

The 8 Hundred teams are mapped to 8 host counties (e.g. Lancashire for Manchester Originals) and those counties will retain a 51% stake in the Hundred franchise.

The remaining 49% will be available for private investment.

The ECB is hoping to generate £425million from the sale of their stakes, which they will invest into the recreational game, as well as into the established County system.

Whilst seven of The Hundred teams are affiliated with their corresponding counties, the remaining 11 counties do not currently benefit financially from the competition.

To alleviate this situation, the ECB has indicated that:

• 10% of the funds raised from the sale will be allocated to the recreational game in England and Wales.

• Of the remaining 90%, the first £275 million raised will be shared between all 18 first class counties (and the Marylebone Cricket Club (MCC))

• The next £150 million will be allocated solely to the 11 non-host counties.

Any proceeds over the above distribution will be shared between all 18 first class counties. 

It’s a fascinating play from the ECB are we are currently in the pivotal stage of the plan trying to attract buyers.

IPL owners, private equity companies, even high-net worth individuals have all been touted as potential suitors.

They want the process completed by the beginning of the 2025 Hundred season (April 2025). So far, as of writing this newsletter there has been no official communication of any franchise sales.

My best guess is that the ECB will sell a portion of £425m they muted out the gate.

The ECB will sell the 49% stakes at lower-than-expected franchise values or prospective buyers won’t take the option to buy 49% of the franchise, but a smaller slice instead.

There are too many open-ended questions in my mind.

• After three editions of the tournament, how much is a Hundred franchise worth?

• Will an owner be happy to acquire a stake knowing that they won’t have a majority position?

• Will the existing counties keep their 51% stake or sell it on immediately?

• If a prospective buyer buys the franchise, will they be able to re-brand the team into whatever they want?

It’s a fascinating conundrum and one that I am watching very closely.

Cricket is my favourite sport so I whislt I remain skepical I want this process to be a success.

I will bring any updates to you all as-and-when they happen.

See you next week.