England’s cricket power play: CNBC’s UK Exchange newsletter

This report is from this week’s CNBC’s UK Exchange newsletter with Ian King. Like what you see? You can subscribe here.

It has already been a gripping cricketing summer in England.

A fiercely fought series of five Test matches with India — global cricket’s financial powerhouse — came to an end earlier this week in what will likely go down as one of the greatest set of games ever played.

A quick aside. Cricket has many forms. The longest is known as Test Match and can last up to five days — and still potentially end in a tie. Then there is the One Day International. Each side gets to bowl up to 50 “overs,” with one over equaling six balls. Next, there’s Twenty 20 or T20, with each side getting 20 overs, or 120 balls.

And finally, there is The Hundred, the shortest of all, which is the brainchild of the sport’s governing body here, the England and Wales Cricket Board (or ECB — not to be confused with the other ECB).

The competition is now big business and, earlier this year, attracted record sums of investment — mainly from the United States and India — to professional cricket in this country. More on that in a moment.

The Hundred, which kicked off Tuesday and is played over five weeks during the English school summer holidays, was born in highly political circumstances.

It was conceived by the cricket board ostensibly to attract new, young fans baffled by longer forms of the game. In practice, however, it was also designed to take power away from the 18 counties that have traditionally been the bedrock of professional cricket in England and Wales.

The cricket board, before The Hundred, had no assets of its own to sell other than the TV rights — and accompanying commercial opportunities — to the England men’s and women’s international teams, and much of that income went back to the counties. It was concerned that, as franchise cricket took off in countries like India and Australia to the potential detriment of international cricket, the value of those TV rights could fall. Hence the creation of its own tournament.

The Hundred’s county teams received a chunk of money to soothe any objections. Those concerns were well-grounded and, to an extent, have been borne out by events: the tournament, being played at the height of summer, has pushed traditional county fixtures to the margins of the season because many of the best county players — who are well-paid for doing so — compete in it.

This marginalization has hurt the County Championship, the sport’s most enduring competition, and domestic competitions, including the T20 Blast, the biggest money-spinner for English and Welsh counties over the last couple of decades.

The Hundred got off to a tricky start. The first draft for the competition was held in October 2019, months before Covid struck, putting paid to the planned first season.

When The Hundred finally got underway in 2021, the cricket board deemed it an instant success: the grounds were packed, TV audiences were high and clips were viewed on social media nearly 35 million times.

Some were unsurprised at this.

Mike Atherton, a former England captain and arguably now the sport’s most distinguished writer and broadcaster, wrote in The Times at the end of the first season: “Cricket is a great game. Stage it in high summer, charge reasonable prices, give it the oxygen of free-to-air TV allied to the muscle and expertise of an established cricket broadcaster, create a condensed tournament with one match a night so that the narrative is easily followed, and then pour all your love, attention and marketing spend on it, people of all ages, faiths, gender, backgrounds and abilities will come.”

Since then, The Hundred has continued to flourish, not least financially. This was confirmed when, in February this year, the eight teams in The Hundred were valued at just over £975 million ($1.3 billion) following a three-round bidding process which attracted interest from around the world.

Crucially, while bringing in £520 million that can be pumped back into the sport, the England and Wales Cricket Board has retained a controlling stake in the competition.

That was a particular triumph for Richard Thompson, the board’s chairman, who recently revealed that, on his second day in the job in 2022, he received an offer from Bridgepoint, the private equity firm, to buy the entire tournament for £350 million.

Some of the sums paid for stakes in the teams are extraordinary.

The highest saw Silicon Valley-based Cricket Investor Holdings pay £145 million for 49% of London Spirit, the franchise based at Lord’s, an iconic cricket ground known as “The Home of Cricket.”

Cricket Investor Holdings is fronted by Nikesh Arora, CEO of cybersecurity giant Palo Alto Networks and is backed by, among others, Alphabet CEO Sundar Pichai, Microsoft CEO Satya Nadella and Silver Lake, the U.S. tech investment giant.

But huge sums have also been staked in some of the other teams. The other London-based franchise, Oval Invincibles, was valued at £125 million after a 49% stake was sold to RISE Worldwide, a subsidiary of Reliance Industries, owned by India’s richest family, the Ambanis. They also own the Mumbai Indians team in the Indian Premier League (IPL), as well as its sister teams, MI Cape Town, MI Emirates and MI New York.

Manchester Originals, meanwhile, was valued at £116 million after a 70% stake was acquired by RPSG, the Indian conglomerate controlled by billionaire Sanjiv Goenka, who also owns the Lucknow Super Giants IPL team.

And Nottinghamshire’s Trent Rockets was valued at £79 million after a 49% stake was acquired by Cain International, the property investment firm owned by Jonathan Goldstein and Todd Boehly, the American co-owner of Chelsea football club. 

The arrival of all this money in English cricket has, unsurprisingly, given the passion aroused by the sport and its knowledgeable fan base, created fresh concerns.

One is that the money will be wasted, as happened in English rugby union, which received a huge cash injection when, in 2013, the private equity firm CVC Capital Partners acquired a 27% stake in the sport’s top domestic competition. Three clubs — Wasps, Worcester Warriors and London Irish — subsequently went bust and several others have been teetering on the brink.

Another concern, linked to the first, is whether the English game becomes further divided between the “haves” and “have-nots.” The inaugural Leonard Curtis Cricket Finance report, published last month, revealed that the three biggest counties — Surrey, Lancashire and Birmingham-based Warwickshire — already accounted for 44% of the total revenue of all 18 first-class counties in 2023. All three, as host grounds, are part-owners of teams in The Hundred. The three poorest counties — Leicestershire, Derbyshire and Northamptonshire — accounted for just 5.6% between them.

Rob Wilson, the report’s co-author, said a number of counties were overly reliant on England and Wales Cricket Board funding but added that The Hundred was, potentially, a crucial turning point.

“The reality is that the ECB revenue structure enables the counties to exist in the formats they’re in. And that’s going to be turbocharged with the Hundred money,” he told The Guardian.

“What’s important is that the ECB look after that money and how they distribute it so the clubs don’t waste it.”

The other concern about The Hundred, not least for purists, is that it and other franchise cricket continue to nibble away at the quality and regularity of international fixtures. There have already been skirmishes: for example, last year, England recalled a number of players from the IPL ahead of the T20 World Cup. England refrained from picking one of those players, Jacob Bethell, in May this year for a Test match against Zimbabwe so he could continue playing in the IPL.

So there is already a club versus country tension present — similar to the one that has blighted professional football for years — and, given the extraordinary rewards on offer, particularly in the IPL, players are likely over time to opt for franchise cricket.

This has already been seen around the world in less financially endowed cricketing nations. South Africans Quinton de Kock and Heinrich Klaasen, and Trinidadian Nicholas Pooran, the most-capped player for the West Indies in the T20 format, are among those who have bowed out of international cricket earlier than they would have done so in years gone by, to concentrate on franchise cricket.

Franchise cricket is already where most TV revenues are for the rest of the world. Only the global sport’s big three — India, Australia and England — play Test series lasting more than three matches and then only against each other (although the Australians are due to host a four-match series against New Zealand in December next year).

South Africa, which recently delighted neutrals by beating Australia to become World Test champions, does not have another home Test series until September 2026. Bangladesh and Sri Lanka will each play just 10 Test matches between now and February 2027.

English cricket’s most dedicated supporters would not want to see that happen here.

For now, though, it’s the height of the summer and this season of The Hundred will feature some of the world’s best cricketers, some of whom — like Australia’s Steve Smith, New Zealand’s Rachin Ravindra and Afghanistan’s Noor Ahmad — will be playing in the competition for the first time. There’s plenty to look forward to.

— Ian King

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BP CEO Murray Auchincloss discusses the oil major’s earnings, the industry more broadly and BP’s biggest oil and gas discovery in 25 years.

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U.K. stocks have held up over the past week, with the FTSE 100 remaining above the 9,000 level to close at 9,142.73 on Tuesday. Investors’ eyes have been elsewhere as multiple countries — and the European Union — scrambled to sign a trade deal with the U.S. ahead of President Donald Trump’s deadline. The U.K. led the charge on trade agreements with the U.S., striking one in May.

U.K. government bond yields followed Treasuries lower over the last week after a disappointing jobs report extended the U.S. slide. The British 10-year gilt yield was trading around 4.52% at Tuesday’s close, down from around 4.61% a week earlier.

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