Update: ECB's proposed sale of shareholdings in the eight The Hundred teams
We are writing to provide you with an update on the ECB’s proposed sale of shareholdings in the eight The Hundred teams.
Current Position
The ECB plans to retain ownership of The Hundred tournament but is seeking a buyer for up to 49% of each of the eight teams. The remaining 51% of the eight teams will be held by the eight venues – so in our case Lancashire will have a 51% shareholding in Manchester Originals. The proceeds of the sale of the ECB’s stakes would be shared between the recreational game, MCC and the 18 first class counties. The formula which allocates the proceeds between the recipients has been discussed and agreed between all parties.
To remind members, there are no plans to sell shares in Lancashire Cricket or any of its assets including Emirates Old Trafford to a third party.
Member Consultation
It is important to us that we keep our members appraised of the process and proposals and listen to your views on them. We have already provided The Hundred updates and discussed this at three member forums, and will continue to keep members updated as the process develops. The forums are a useful way for us to gauge member views on the proposals and to receive your feedback. The feedback received to date has enabled us to refine our thinking and to pass on ideas and thoughts to the ECB.
By consulting with our members, discussing things with you, answering your questions and listening to your challenges and thoughts, we believe that a consensus on the best way forward for Lancashire Cricket is emerging and our members’ views have certainly helped inform our decision-making so far. Our Board is totally focussed on making decisions which are in the best interests of Lancashire Cricket – and your engagement in ongoing discussions is critical to this.
ECB Decision-Making
The disposal of the stakes in the eight The Hundred teams is an ECB-led process, and it is important that all of us understand that it is highly likely that the ECB sales will proceed, no matter what the view of Lancashire, or any other individual county, is on the project. The ECB has no formal need for approval from counties to proceed to sell their shareholdings in the eight teams. Instead, it has embarked on a collaborative, consultation exercise with the counties and MCC to ensure that there is a broad consensus on the proposed “direction of travel”, which is the case now.
We intend to continue to follow the same approach with our members: keep you informed, listen to your views, answer your questions and share relevant information with you as it emerges. This way, our decision-making is informed by the views of our 7,000 plus-strong membership.
With this in mind, we have scheduled the following events to continue the consultation exercise with our members:
- Thursday 8 August (10am): Lancashire v Middlesex, Metro Bank One Day Cup
- Wednesday 18 September (Lunch): Lancashire v Somerset, Vitality County Championship
- October (Date TBC): Zoom
- Friday 8 November (12noon): Emirates Old Trafford
Context
As we have stressed at each stage of this project, it is vital to understand the broader context and rationale behind the decision-making process. Global interest in commercialised short form cricket has exploded in recent times, with many of the world’s leading tournaments being owned by national governing bodies (such as the ECB) and their teams by private investors. While the IPL started in India in 2008 and is the most successful of these tournaments, others such as SA20 in South Africa, ILT20 in the UAE and Major League Cricket in the USA have begun much more recently. These leagues present both opportunities and threats to English domestic cricket, and it is in this context that ECB has decided to commercialise The Hundred by seeking private investors for the eight teams. The strength of international player rosters in these competing competitions potentially limits the ability of English cricket to attract the World’s best players to our tournaments. There is also a risk that our young homegrown talent is tempted to play overseas rather than in this country.
Over recent months, a strong consensus has emerged across the counties and MCC that a sale of stakes in the eight teams is an attractive proposition, both in order to enable English cricket to have its own World-leading domestic tournament and to ensure that our cricket remains on a strong, financially sustainable footing. While there are, as yet, no binding agreements in place and there is much work still to do, there is a clear commitment across the game to support the proposals.
Next Steps
The ECB has recently appointed an advisory team of investment bankers and lawyers to bring the proposals to fruition. Lancashire Cricket’s focus now turns to three key areas: first to ensure that we continue to consult with our members as we have explained above; secondly that we thoroughly review the risks and opportunities presented by the proposed transaction; and thirdly to engage in the ECB’s process with the aim of ensuring that the party who will purchase the ECB’s shares in the Emirates Old Trafford-based team is the best partner for Lancashire. The partner selection process will be a joint ECB/Lancashire decision, which we believe is crucially important.
We are committed to ensuring that our co-owner in Manchester Originals shares our commitment to the growth of cricket in England, and the North West in particular, and that their ethics and reputation align with ours.
Importantly, we are looking for more than a pure financial partner (ie so-called private equity investment): we want to work alongside a likeminded sporting partner who can help us grow Manchester Originals to be the best team in The Hundred and one of the leading franchise teams in the world. As a centre of sporting excellence, the North West cricketing public deserve and expect nothing less of us.
Our Current View
We believe that the proposals represent a compelling opportunity for Lancashire Cricket to take ownership of a valuable asset (a 51% shareholding) and to become integrally involved in the operation and growth of our own franchise cricket team. However, our Board is focussed on fully appraising the risks and opportunities in detail, and undertaking a thorough appraisal of the potential partners who emerge thorough the ECB process. Alongside the ongoing consultation with our members detailed above, we believe that this will ensure that the decisions that we ultimately take will be in the best interests of Lancashire Cricket.
However, as stated above, there is much work still to do, much detail and analysis yet to be considered – and it is likely to be into the Autumn that final decisions will be made.
Summary
The Hundred transaction is now highly likely to take place, whether we accept the 51% shareholding in Manchester Originals or not. Our focus now is to ensure that we remain an influential part of the proposed transaction on terms that are right for Lancashire Cricket. Decision-making will involve a myriad of complex considerations – significantly more complex than can be dealt with in a simple ‘yes or no’ vote of members at a one-off meeting.
To ensure full member engagement and as wide a pool of views, questions and feedback as possible is factored into our decision-making, we strongly encourage all members, irrespective of any cricket format preferences or preconceptions, to engage in our ongoing club-wide consultation process to assist us in this decision-making process.
All of us look forward to seeing you at the forthcoming member events. Detailed information on each member consultation event will be shared ahead of that meeting/forum.
It is vital that the Club plays its part in The Hundred and the investment process, and with this in mind your questions and feedback are hugely valued and will help our decision-making as we work through the complex process.
Yours sincerely,
Daniel Gidney Andy Anson James Sheridan
CEO Chair Lancashire/Manchester Originals Director