The Sale of the Hundred

Is bloody confusing

A shorter post on The Hundred based on this article from Sky on the continuing negotiations for the sale of The Hundred teams, written by their business editor, Mark Kleinman.

The article is a summary of a letter from the ECB to the 8 potential owners / co - owners proposing how the Hundred will be run post the sale of a 49% stake in each of the Hundred teams. I found this very complicated but it’s clear that the impression in the sport’s pages of a “done deal” is a bit misleading, there are still substantive differences to be resolved.

There are two points I’d like to draw out from the article. One is an explanation of how TV rights pricing will work post the Hundred sale and the other raises the issue of, what is the ECB up to?

TV rights

This from the Sky article: “For the 2029 [media rights] cycle, the default position is the UK media rights will be sold on a bundled basis, with a floor valuation of £51m per year for The Hundred,"

I wondered how a bundled rights package (i.e. selling both international and Hundred rights to the same buyer) could work once the ECB has sold a stake in each of the Hundred teams. The ECB could negotiate a deal for all of the rights and then go back to the Hundred teams and say : “Sorry old boy turns out the Hundred wasn’t worth anything after all.” The plutocrats, tech bros and hedge funds who now own a stake in the Hundred teams are lovely, trusting people but even they might balk at just taking the ECB at its word. The ECB’s proposed solution is that the Hundred teams get a minimum guaranteed payment of £51m a year from the bundled UK TV rights deal starting in 2029.

The £51m is roughly equivalent to the amount the ECB is channelling to the Hundred teams from the current Sky deal and over the 4 years of the deal represents 20% of the total UK TV rights, but the guarantee is a significant concession to the buyers of The Hundred teams. Let’s say that the value of rights to UK cricket fall from the £1.2billion under the current deal ending in 2028 to £1billion for 2029 onwards. As the Hundred teams are guaranteed the £50m or so a year they get under the existing rights deal all of the reduction will fall on the ECB and by extension the grass roots and county games. And the Hundred buyers may be able to negotiate the value of the guarantee up from the ECB’s suggested £50m. It shows how the ultimate deal for the Hundred might be rather different and more complicated than recent press reports imply

What is the ECB Doing?

I don’t know what the ECB is doing. From press reports they have got their knickers in a twist and are insisting on the 2029 rights being sold as a single bundle of Hundred + international cricket. The Hundred buyers, understandably, have their doubts about this and the ECB is offering the guaranteed payment as an incentive to the buyers to accept the ECB’s preferred approach. But that just creates an unequal situation where the ECB (and by extension English cricket) underwrites the downside of a 2029 media rights deal but if the 2029 rights deal is a bonanza the Hundred buyers get all of the upside from the the Hundred part of the deal.

This is all rather strange, a bundled rights deal worked when all the money raised from the rights went back into English cricket at grass roots, county and international level. The sale of a stake in the Hundred teams breaks this nexus and means that the logical way to sell the rights is to split out the Hundred and sell those rights separately. Why don’t the ECB want to do this and why is it prepared to put a floor under the value of the Hundred rights to encourage the Hundred buyers to accept the bundled approach?