English Cricket's Valuation of The Hundred

The England and Wales Cricket Board (ECB) has faced criticism for being "out of touch with reality" regarding their financial forecasts for The Hundred and the valuations they have placed on the eight franchises.

In a detailed 87-page document aimed at potential investors and reviewed by Telegraph Sport, the ECB projects that domestic TV rights revenue will increase from £54 million to £85 million annually by 2029. This report, titled Project Gemini Information Memorandum, was put together by Raine Group, the same American bank overseeing the sale. In addition to domestic projections, the document predicts a significant boost in Indian TV rights, from £1.3 million annually to £1.8 million by 2029, with an even more dramatic surge to £15 million per year starting in 2030, despite Indian players being restricted from participating in foreign leagues.

Lalit Modi, the creator of the Indian Premier League (IPL), has expressed scepticism about these financial predictions, dismissing the figures as "overly optimistic." He also questioned the ECB's assessment of the franchise values, noting that while the ECB hasn’t publicly disclosed its valuations, there are whispers that they hope to generate as much as £500 million from the sale. However, Modi remains doubtful, estimating that London Spirit might be worth around £25 million, while Manchester Originals could be valued at just £8.5 million.

Modi further criticised The Hundred's potential to attract a global audience, suggesting that the ECB’s estimates for international TV rights, particularly beyond 2026, are exaggerated. He believes it’s unlikely that The Hundred will attract the necessary international viewers to validate these numbers, especially with stiff competition from other cricket leagues such as the IPL. He also called into question the predicted growth in sponsorship revenue post-2027, arguing that it appears to be more of an aspiration than a realistic forecast.

Even if some of the projections for 2027-28 materialise, Modi emphasised that there is no concrete basis for expecting sustained revenue growth of the magnitude the ECB predicts. He highlighted the stark contrast with the IPL, where teams are now valued at $1 billion (£745 million) after 16 years of success, while The Hundred’s teams, in his view, are unlikely to exceed £5 million to £25 million, with Manchester Originals potentially topping out at £8.5 million.

Modi also pointed out that The Hundred struggles to match the profitability of the Caribbean Premier League, a sign of its precarious financial state. He warned investors to be cautious, urging them to closely examine the earnings before interest, taxes, depreciation, and amortisation (EBITDA) figures for each team as provided in the ECB’s memorandum. 

The ECB chose not to comment on these claims.

The Sale of The Hundred: A Waiting Game for Big Bidders

The ECB initiated the formal sale process for a 49% stake in The Hundred's eight franchises at the beginning of September. The board originally hoped to finalise the sales before the start of the next season. However, Vikram Bannerjee, ECB’s director of business operations, indicated that the process might be delayed. In an interview on the Business of Sport podcast, Bannerjee highlighted the importance of securing the right partners, even if it takes more time. He noted that if the offers during the first round don’t meet expectations or the ideal partners aren’t found, the ECB is prepared to continue running The Hundred for another year before attempting to sell again.

This marks the first time the ECB has welcomed private investment into English cricket. Although they previously rejected a £400 million offer for a 75% stake in The Hundred from the Bridgepoint Group, the ECB is now set on selling a 49% interest, with the remaining 51% being granted to the grounds hosting the franchises. The proceeds from the sale are intended to be distributed among the counties, providing them with much-needed financial relief. Yet, if Modi's valuations are accurate, the anticipated financial windfall will likely fall short of the ECB's hopes.

Disclaimers in the ECB's document also caution against over-reliance on their forecasts, stressing that no guarantees are made regarding the accuracy or feasibility of their projections.

The Hundred’s Global Aspirations: Hurdles and Realities

Potential investors must weigh the risks and rewards of putting their money into The Hundred. According to Modi, the financials suggest that The Hundred franchises are likely to be as profitable as those in the Caribbean Premier League. The ECB’s predictions indicate that London Spirit could see an EBITDA of £1.3 million in 2026, growing to £8 million by 2029 if the ECB’s ambitious goals for television and sponsorship revenue are met. However, Modi remains unconvinced of their viability.

The ECB is marketing The Hundred as a dominant force in the British summer sports calendar and the premier destination for global cricket stars. Yet, despite these claims, the absence of high-profile international male players this year, such as Pat Cummins, and the exclusion of Indian players, casts doubt on these lofty assertions. 

While the ECB is eager to make The Hundred a global phenomenon, the hurdles are significant. Cricket in the US is expanding, but American fans are already invested in the IPL and international competitions. In fact, Major League Cricket in the US has successfully drawn many top players, and it is poised for further growth. With The Hundred played during a similar time of year, the ECB faces an uphill battle in convincing American audiences to tune in.

Moreover, the time zone difference poses additional challenges. Most of The Hundred’s men’s games start at 6:30 p.m. UK time, which translates to 1:30 p.m. in New York and 10:30 a.m. on the West Coast. A senior official from another major T20 league told Telegraph Sport that there’s "no chance" the ECB will meet its financial targets for North America by 2030 unless Indian players participate in the competition.

Indian players are seen as crucial for The Hundred’s ability to secure £15 million annually from Indian broadcast rights by 2030, a figure more than ten times higher than current levels. However, it remains unlikely that leading Indian cricketers will be permitted to play in overseas T20 leagues anytime soon. Even leagues in the Caribbean, South Africa, and the UAE, some of which are owned by Indian Premier League teams, have not been able to feature Indian players.

The competition from the IPL poses yet another challenge. The league is exploring further expansion, which could diminish the demand for overseas leagues. Additionally, a potential merger between Disney and Reliance Industries, two major players in cricket broadcasting, threatens to reduce competition and push down broadcasting rights values. This is analogous to a merger between Sky Sports and BT Sport in the UK. Even without these external obstacles, The Hundred’s prospects in India are hindered by the time zone difference, with a 6:30 p.m. start in the UK meaning the games begin at 11 p.m. in India.

Can The Hundred Defy the Odds?

By 2030, the ECB projects that The Hundred will generate 25% of its revenue from international markets, a feat rarely achieved even by the most successful sports leagues. The IPL, for example, only earns 4% of its revenue from abroad, while the NFL collects just 2%.

For over two decades, T20 leagues have demonstrated a consistent truth: the bulk of their revenue comes from domestic markets. The ECB’s gamble is that The Hundred will break this trend. Whether potential investors share this belief will ultimately determine whether English cricket can reach its £500 million target from The Hundred’s sales.