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Investors offered 33% stake in Big Bash teams

Peter English

October 29, 2010

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Andrew McDonald drives behind square, South Australia v Victoria, Twenty20 Big Bash, Final, Adelaide, January 23, 2010
The Big Bash attracted an 80% increase in crowds last summer, and will be getting even bigger in 2011-12 © Getty Images
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Private investors will be allowed to buy a 33% stake in eight city-based franchises that will form Australia's Big Bash League in 2011-12. Cricket Australia's board gave approval for the Twenty20 expansion in Melbourne today and the organisation will own and control the competition.

Reports this week said Indian corporations had already bought shares of around A$60m in some of the proposed franchises. However, Cricket Australia believes the value of the teams will rival the biggest sporting clubs in the country. The Brisbane Broncos rugby league team was priced at A$36m this year.

James Sutherland, the Cricket Australia chief executive, said private investment would be allowed from minority stakeholders, but the individual teams would be owned by the state associations. "The board has taken a position that it will be less than 49% [minority share], probably more likely to be 33%," Sutherland said.

"We're very excited and optimistic of the existing interest in these teams and the Big Bash League. Some of the valuations we have done recently put these teams immediately into the upper echelons of Australian sport in terms of value in sporting teams."

The idea is unashamedly based on the India Premier League, but Cricket Australia is determined not to make the same mistakes over ownership that have plagued the competition this year. Two franchises, Rajasthan Royals and Kings XI Punjab, have been struck out following broken agreements, while Kochi, one of the expansion teams, is on the verge of being dumped due to issues with investors.

When asked whether fit and proper testing of owners would occur, like what happens in the English Premier League, Sutherland said, "Under the licensing agreement, which each of the states and teams will be bound by, there will be a process of Cricket Australia maintaining the rights to vet or approve any investors in any of these teams."

Sutherland said there was a lot to be learned from the IPL. "I mean that in a positive and negative sense," he said. "There is a model there that exists that has been incredibly successful.

"It's important to reflect that part of the reason this competition is already attracting investors here and abroad is the fact that it is extremely high profile, by virtue of Big Bash teams having qualified for the Champions League, and been very successful. It's also because the game of Twenty20 is popular around the world, and it's a unique opportunity for cricket."

An IPL-style auction is not an option to distribute the playing talent but there will be a strict salary cap and a draft will be considered. There are hopes for a January window to ensure Australia's international players and big-name overseas stars are available for the entire tournament, but that will not happen at least until the current TV rights deals run out in 2012-13.

"We see great merit in having Australian players playing in this competition but obviously that needs to be balanced with our commitments to international cricket," Sutherland said. "We want Twenty20 to complement, not compromise, international cricket. Finding that balance is important."

Six of the sides will come from the cities that already host domestic cricket, but the state concept will be abolished for the Twenty20 tournament. Expressions of interest will be taken from other areas of the country over the next couple of months and a decision on the final two teams will be made in February. The inaugural tournament will be held in December and January 2011-12.

Crowd numbers for the Big Bash, which started in 2005-06, increased by 80% last year to average more than 18,000 per game. Cricket Australia was initially reluctant to join the Twenty20 revolution when it began in England, but quickly swung behind it when realising how popular and lucrative it could be.

Cricket Australia has done modelling 20 years into the future and Sutherland is convinced the tournament will be a massive success. "It gives us a huge amount of confidence in how this competition is going to grow," he said. "In the first couple of years, the cash flows are somewhat handicapped by existing media rights deals, so the marginal revenues may not be quite as large, but we would expect those to kick in from year three and beyond."

While there are expectations the other two domestic competitions will be cut back, Sutherland said the Boxing Day Test was "safe". "From an international programming point of view, our priority rests with international cricket," he said. "But all of the research we have done very strongly indicates that the enjoyment that people get from the game of cricket can be spread over the three formats, or discreetly held with one format of the game."

Peter English is the Australasia editor of Cricinfo

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© ESPN Sports Media Ltd.

Posted by   on (October 30, 2010, 21:36 GMT)

I am all for this competition - the crowd numbers already are at a better average than our second most football code - NRL, it still has a while to get to AFL. This will make cricket in Australia more loved as people can back a team in which they live in/ close to. I'm really interested to see what the crowd numbers are like in 2010/11 because the numbers jumped dramatically in 09/10 so hopefully they will do the same this season. For this to happen they need international stars like gayle, vettori and any indian players so other countries will buy television rights. More importantly they need AUSSIE cricket stars to be playing, if this happens it will be one the biggest competitions in the world.

PS - GET RID OF ODI'S!!! - abolishing them would give alot more time on the calender for IPL, BIG BASH, clt20 and many two team test tours.

Posted by   on (October 30, 2010, 21:27 GMT)

This is a great idea. I don't know why everyone is downing this idea. The main goal for all domestic cricketers is to play shield and one day wear the BAGGY GREEN. this will definitely strengthen the love for cricket in Australia.

Posted by SnowSnake on (October 30, 2010, 19:55 GMT)

T20 was created to get Americans interested in it. It failed in that regard as did Soccer. While there is a soccer league (MLS) in USA, Soccer is the most boring sport that I have seen. Americans only like the sport that they have a full control on. Any sport that is not controlled by the USA will not be liked in the USA. ICC should have known this. While T20 generated demand in India and rest of the world, salaries skyrocketed making T20 profit margins thin. Anyone who invests in T20 leagues is bound to lose money.

Posted by cricketislovely on (October 30, 2010, 16:00 GMT)

Implying that there is no skill involved in T20 cricket is a ridiculous notion. The skill set and approach required differs from the longer forms of the game, but it is highly skilled nonetheless. In T20, batsmen don't have time to poke and prod and get their eye in, they need to see the ball well from the start. Hitting boundaries requires skill as does executing strokes and finding the gaps. There is also a strong premium placed on running between wickets. Suggesting that bowlers don't matter in T20 is similarly ridiculous. Some bowlers have thrived in the format e.g. Nannes, Malinga. Whilst others have struggled. As an Australian I was initially highly sceptical towards T20 cricket, but I have been won over. In a T20 match every ball matters, so there is a tension from start to finish. T20 is a good complement to Test cricket as the two formats deliver two very different tempos and viewing experiences. In contrast I find ODIs boring as they are neither here nor there.

Posted by SnowSnake on (October 30, 2010, 15:41 GMT)

With over 20 years of experience in investing, I see T20 cricket as a market bubble in formation, which will burst in about 2-3 years. It all began with Allen Stanford T20 for 20 million. Then IPL was created. Currently, IPL has some financial problems, so Indian investors are moving to Australia to try to make a quick buck. When people start moving money from one investment to another, they are trying to salvage their losses in the hopes that the new idea might rescue them. To make money, you need to have increase in demand. Unfortunately, demand for IPL matches is going down and Australian cricket market may be the second best (in terms of demand), but generally, interest in T20 is going down, so I just don't see how anyone can make money when demand for cricket experiments is decreasing.

Posted by Copernicus on (October 30, 2010, 14:46 GMT)

The most worrying part of all this is not the foreign investment (although I fail to see how Indian control of domestic teams is remotely in the interests of Australian cricket), but smoething that seems to have snuck through in the last paragraph: "there are expectations the other two domestic competitions will be cut back". If this just means scrapping the unloved domestic one-dayers then to be honest it would probably be seen as a relief. But once they start making cuts to the Sheffield Shield, Australian cricket will see a major dip in quality.

Posted by sherb on (October 30, 2010, 4:23 GMT)

20/20 is cricket dumbed down as far as it can go, it is cricket's equivalent of WWE. It is perfectly suited to the modern generation, which needs an instant result with as much glitz and razzamatazz as possible. The 50 over form of the game at least gave batsmen a chance to build a semblance of an innings and bowlers to make some sort of impact. In 20/20 Entertainment, the batsmen are simply slogging machines and the bowlers - well, what's the point of having them? Put bowling machines there instead. In making this decision, Cricket Australia have shown they have little regard for the game and its structure in Australia. ODI's and domestic one-dayers will be the first to go and let's see how long it takes for the Sheffield Shield to be hacked into as well. The almighty dollar is all that matters, hang the effect it has on the game. Shame on them.

Posted by cheesemethod on (October 30, 2010, 4:08 GMT)

Matt, I'm not convinced at all that t20 is killing or will be the death of test cricket. Its crippled one day cricket for sure but the game is so different to the 4-5 day format that it may actually make it stronger. I for one have started to enjoy test cricket more over the past couple of years, maybe i'm getting old but I do the chess style tactical battkes, something t20 doesn't deliver. Agreed abput the baseball though. It was only a couple of months ago I was saying there should be a baseball franchise comp in Aus and it was already in the works. I hope it takes off and strikes (no pun) a decent TV deal.

Posted by AussieMatt1974 on (October 30, 2010, 1:39 GMT)

As one person I can only comment on what I think and what I will do. I think this is a very bad idea and I will not be going to this new competition and will instead spend what money I normally would on cricket, on watching another summer sport and that is baseball in the Australian Baseball League. At least now I will be able to follow a sport that has been true to itself in the rules and how the game has been played for the past 100 years and get something out of it. I am very sad for the demise of Test Cricket due to this new virus.

Posted by cheesemethod on (October 30, 2010, 1:17 GMT)

I havent been a huge fan of t20 but this is a good move. Expand the big bash and I reckon eliminate domestic 1dayers (which was the original idea of t20 to begin with, keep ODIs but make the domestic format shorter and more exciting). The big bash absolutely boomed last season getting bigger crowds than australias ODIs so its a step in the right direction.

The new/desperate one day domestic format has been a failure. Good in theory but even on TV its lacking staying power.

I have no interest in the IPL. the TV production is terrible, as is the bulk of commentary and general presentation. Ausrtalia easily has best grounds and best quality of coverage for the TV viewers so no doubt it will be the new benchmark as the worlds best cricket competition. No bias either, I'm a New Zealander.

It will work, just don't oiverdo it. Grow it overtime.

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