ECB can’t afford to squander Hundred ‘lottery win’, says finance expert

The England and Wales Cricket Board has been warned its Hundred windfall must be used wisely to prevent the cash injection becoming a “glorified payday loan”.

An auction of stakes in the competition’s eight city-based sides raised a remarkable sum over the past fortnight, with global investors clamouring for shares that came with a total price tag of around £520million.

That is the figure the ECB expects to have at its disposal as it looks to fulfil its aim of refinancing the sport for a generation, with around £50m set aside for the recreational game and the rest to be divided between the 18 first-class counties and Lord’s owners, Marylebone Cricket Club.

An estimated one-off hit of between £22-27m could prove a lifeline for county sides, but sports finance expert Kieran Maguire, who lectures at Liverpool University, insists it is not a magic cure.

He believes the way the money is handled is as important as the final tally if it is to act as more than a sticking plaster.

“It’s about how wisely they spend this lottery win, because that’s what it is. There is a long-term issue when it comes to the sustainability of professional cricket,” he told the PA news agency.

“Parts of the game have become increasingly marginalised over the years, with the result that many clubs run at a loss and fall into debt. Some of the losses which are being incurred are quite substantial.

“When you are giving away a big percentage of future TV revenues, you can look at that and see it as a glorified payday loan. It’s easily spent away on a few vanity projects.

“Unless you set a new budget for sustainability we’re going to be in a very similar position in a few years’ time. The one thing we know about the history of cricket and finance is that we never learn anything from the history of cricket and finance.”

“We want the money to be invested rather than ‘spent’,” said chief executive Richard Gould on Thursday.

“We want to make sure it has a really long-term impact.”

Doctor Dan Plumley, a sports finance expert at Sheffield Hallam University, is optimistic about the future given the unexpected scale of the gold rush.

“We can file this one under ‘exceeded expectations’. The numbers are staggering,” he told PA.

“To be fair to the ECB, this competition has had its critics, but they were bullish about their targets and these numbers are considerably above the estimates.

“The ECB probably feels justified to be reaping some of the rewards and it’s a cash boost for the wider game which is much needed. It has the potential to deliver some real legacy.”

As for securing a handy return on investment, Plumley stressed the importance of hooking in the Indian TV audience.

“It’s the same economic model, you need eyes on screens and bums on seats. That’s driven by on-field talent – it’s tried and tested through history,” he said.

Even if that does not happen, it may not be a deal-breaker. Maguire sees some of these purchases as much through the prism of luxury spending as clinical money-making vehicles, citing the £145m paid by a Silicon Valley consortium for 49 per cent of London Spirit.

“I believe it went for 31 times expected revenue. When you go to that kind of number, you’re not buying it as anything other than a trophy asset,” he said.

“Lord’s is the equivalent of the Mona Lisa and, even if it’s only yours for four home matches a year, that is still an asset that suits them down to the ground. I don’t think they are investors in the traditional form, in terms of wanting a financial return on an asset.

“It sounds a lot of money to us but, if you look at the valuations of some of these companies, it’s a drop in the ocean. It’s like they’re buying a cricket club instead of another superyacht. It’s conspicuous consumption.”