Last week, a sports investment company sent a press release to every cricket journalist extolling the virtues of the ECB hiring them as consultants in order to facilitate investment in The Hundred. It was a pretty obvious advert being portrayed as an independent ‘report’ which I chose to completely ignore. Unfortunately, the cricket journalists themselves decided to pick up on it and the story has been gaining traction ever since. I think now that its fundamental flaws need addressing.
The mechanics of investment seem fairly simple. The investor buys a portion of a company, in exchange for which they may receive a some of that company’s revenue or profits. In addition, if that company gains in value then the investors can typically also sell their stake to someone else for more money than they paid. For the company selling the shares, they get a short term increase in money available to them without having to repay a bank loan. That extra money can allow the company to expand, or restructure themselves in order to become more profitable. If everything goes well, everyone wins.
There are two scenarios which I can see applying to private investment in The Hundred. The first is the wildly optimistic outcome where the new competition is a huge hit, filling stadia with fans and earning a massive TV deal from 2025 onwards. If that happens, the ECB will likely lose a lot of that profit to the private stakeholders which they could have otherwise kept and invested in English cricket.
The second, perhaps more likely scenario is that The Hundred stalls. Perhaps not a total failure, but the offered TV deal in 2025 is lower than expected and the ECB want to cut their losses and start again. The problem with that would be they would have given up some measure of control to the private investors in exchange for their money, and so they might not be able to do so unilaterally. What should be a simple process instead becomes a complex and expensive negotiation involving lawyers and all sorts.
So it would be fair to say that I think this kind of outside investment will financially harm English cricket in the medium to long term, one way or the other. It has been suggested that the ECB might not have any choice in the matter due to their own current lack of funds. This is, I think, hyperbole.
Regardless of what happens this season, the ECB will still receive £220m in 2021 from Sky. I believe that is more than the television, ticket and membership revenue of all English cricket combined in 2019. It’s not currently clear exactly how much the ECB will be getting this year, except that it won’t be the full amount due to the postponement of The Hundred, but even then it is likely to be more than last year if the England men’s team play most of their scheduled games. So long as counties are sensible with their finances, and readjust their plans to the new situation, there shouldn’t be any threat to their existence.
In conclusion, I believe welcoming investment into The Hundred (or really any other aspect of English cricket) is a mistake which should be avoided. Things aren’t as bad as many people seem to fear (at least in the professional game), and so now is certainly not the time for panicked decisions or short term fixes.
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