The timing could not have been better for Todd Greenberg, the new chief executive of Cricket Australia. The month before he settled into his Jolimont office in March this year, his associates at the England and Wales Cricket Board did him an extraordinary favour. Their process to sell minority stakes in teams playing in The Hundred, the short-form franchise cricket competition similar to the Big Bash League, raised £520m ($1.06bn).
Greenberg – the respected former NRL and Australian Cricketers’ Association CEO – followed Nick Hockley in the role. But while the position as one of the figureheads of Australian sport came with prestige and power, Greenberg was also restricted by the actions of his predecessor.
The extension of the local broadcast deal with Foxtel and Channel Seven was signed by Hockley in 2023 amid strained relations between the sport and its free-to-air partner. Whether the roughly $215m per year arrangement was fair value or not, Greenberg came into the role handcuffed: cricket’s single biggest revenue line item was locked in until 2031.
Seeking options – more so-called “financial levers” – at the start of his tenure as CEO, Greenberg acted quickly following the The Hundred sale process. Alongside chair Mike Baird, Greenberg commissioned CA’s long-time consultants of choice, Boston Consulting Group, to assess the best paths of growth for the BBL.
The recommendations of that report were revealed on Tuesday in the Sydney Morning Herald, and include selling a minority stake in the eight BBL teams to private investors. Whether it came from a genuine leak, or a plant by CA to test public support for the controversial proposal, the news has been hailed by proponents of private investment.
Player agent and cricket dealmaker, Neil Maxwell, believes the opportunity not only provides access to capital but also new investors’ business acumen and networks. “It shouldn’t have taken this long,” he says. “The BBL has built a decent product, initially it was a second mover [after the IPL], and it had that advantage over other leagues, but it set itself back by not keeping pace with commercial reality. The major factor there is it hasn’t been able to compete internationally through one of the main products that people require, and that’s access to the best players.”
Private equity in the BBL has been considered since 2010, before a ball in the new competition had been bowled. At that time, the CA’s head of strategy was Andrew Jones, who now works as a management consultant. A decade later, Jones wrote an article in The Age describing the period titled: “There is always free cheese in a mousetrap”.
The “free cheese” in a private equity deal is the up-front investment. The “mousetrap” is the money, control and strategic flexibility lost forever. Selling BBL stakes to private investors was “the single worst idea in my time in cricket,” Jones wrote in 2021. “Not much has changed.”
Since 2021 however, IPL team valuations continue to rise, and a sale of the Gujarat Titans this year pegs the team at around $1.3bn. There has been increasing investment in franchise T20 leagues such as those in South Africa and the UAE, which compete against the BBL in its traditional summer school holiday window.
Eric Windholz, associate professor in Faculty of Law at Monash University and an expert in sports law says CA “would be derelict in their duties” if they were not monitoring these global trends. “It’s only natural that the authorities in charge of cricket in Australia are looking at what’s happening around the world and properly investigating what are the opportunities for cricket here,” he says.
But he noted public sentiment remained sceptical about private equity’s benefits. “We, the public, feel like we own the sport, so whenever we hear about private equity coming in to own an asset that we think we own, we obviously have an unease about it,” he says.
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Some of that discomfort may be alleviated by the release of more information about the proposed BBL deals. Selling 49% of a franchise will be too large a share for some states to stomach, even if they retain majority control of an entity valued as high as six figures. The franchises will also require veto rights over the investors. The Adani Group, which had interest in the recent Gujarat Titans sale process, buying a stake in Brisbane Heat is unlikely to go down well.
But there are also competing views over how any capital injection would be spent. Under The Hundred’s sale, 10% of the revenue was quarantined for grassroots cricket, with the rest split between the counties and the MCC. Much of that money appears set to be used to prevent the collapse of some counties, and reduce hundreds of millions of pounds in debt.
Cricket Australia lost $32m in 2023-24, but its cash reserves are set to rise to around $70m after the coming Ashes Tour, largely thanks to the success of red ball cricket. At this stage at least, the sport doesn’t need external funding to help prop it up.
Some within cricket believe a proportion of any private equity windfall should be placed in a so-called “future fund” to deliver market returns long into the future, or to provide security for the next pandemic. Some look at the diversified assets of the NRL, which has bought into real estate in recent years, with envy. Others have raised the prospect of infrastructure upgrades within the sport. All agree that at least some needs to be spent on the BBL, to attract more prominent players and improve its global standing.
Yet there is concern that cricket’s diverse stakeholders may make competing claims on any newfound riches, and turn a once-in-a-lifetime investment injection into a short-term sugar hit. Maxwell, as a player agent, believes athletes must be better paid, but only as part of a broader plan for growth. “It’s not ‘pay the players and then build a strategy’, it’s the other way around,” Maxwell says. “The players fill that gap and they support that strategy.”
Windholz agrees there are positives in having an injection of private capital, “but the owners of the private capital aren’t doing this out of the goodness of their hearts,” he says. “They want a return on their investment, and that’s where the risk lies.”
