IPL franchises aim stakes in Hundred teams

As the England and Wales Cricket Board (ECB) moves forward with plans to privatize the Hundred, Indian Premier League (IPL) franchise owners are expressing keen interest in acquiring teams. However, many are hesitant about the current ownership model, which limits their potential stake to 49%.

The ECB's privatization strategy for the Hundred, now in its fourth season, involves running the eight teams as joint ventures. The proposed structure allocates 51% ownership to existing hosts, seven counties, and the Marylebone Cricket Club (MCC) while offering the remaining 49% to private investors.

This model has raised concerns among potential buyers, particularly IPL franchise owners accustomed to full ownership and control. One IPL-winning franchise head highlighted the challenges of this joint venture approach.

"This is going to be new for anyone who's coming in because, in all the other franchise investments, we are 100% owners. The dynamics of that are very different. Here, it's going to be a joint venture. There's valuation subject, then there's ownership subject, then there are operational matters - all these issues come to the fore immediately," said the head of one IPL-winning franchise as quoted by ESPNcricinfo.

Also read: ECB proposes IPL franchise owners to invest The Hundred

There are legacy issues that will be there in the Hundred: Venky Mysore

Vikram Banerjee, head of business operations at ECB, acknowledged these concerns during his recent visit to India. He noted that control issues often revolve around brand management and cricket operations. In response, the ECB has built flexibility into the process, with some teams potentially offering larger stakes to attract investors.

"For a number of them, it's around things like brand. For a lot of them it is cricket, and being in control of the cricket side of things and others, pure and simple majority stakes from an equity perspective. So we understand that and we understand where they are at. We have then built that into the process," Banerjee said.

While the majority stake remains a sticking point for many, not all potential buyers are fixated on control. An IPL CEO expressed openness to a smaller initial stake.

"49% is good enough to begin with. The key question is how much that 49% constitutes of the overall value. If that number is too huge and I am not sure and I see enough returns, then I would rather take a small share to begin with, with a rider that I would be allowed to take more of a stake with every passing year, or every five years," the CEO added.

Also read: England Cricket Board finalises procedure for private investment in The Hundred

Venky Mysore, CEO of Kolkata Knight Riders, emphasized the importance of chemistry in successful joint ventures. He noted that beyond financial considerations, the ability to work together long-term is crucial.

"Like in any joint venture there are legacy issues which will be there in the Hundred, too. The existing shareholder group has existed for 100-plus years, and suddenly, you have a new investor coming in and you are joining hands," Mysore said.