Lalit Modi, the India businessman who kick-started the IPL, has publically rubbished the ECB’s valuations of The Hundred teams in a post on The Social Network Formerly Known As Twitter, backing up his arguments by publishing the confidential team-by-team revenue projections issued by the ECB.
Modi writes that the ECB’s revenue projections are “disconnected from reality” and argues that the teams are worth only between £5m and £25m – less than half of what the ECB are believed to be holding out for.
Modi believes that increasing the projected earnings from domestic TV deals from £58m to £85m is “plausible” but that the expected income from overseas TV rights is unrealistic, and that the idea that there could be a big increase in sponsorship income is “wishful thinking”.
There’s a lot to digest here, but let’s start with possibly the only thing Modi is wrong about: domestic TV revenues. Given the state of the UK economy,which is projected to become poorer than Poland in terms of per-capita income by the end of the decade, it feels unlikely that Sky will have that kind of additional money to throw at a sport where they are likely to be the only serious bidder. If the rights end up increasing by even half of the 50% Modi is suggesting is “plausible” (and to be fair, he only says “plausible” and not “likely”) that would be a huge surprise.
On overseas TV rights Modi is almost certainly correct – the networks aren’t going to pay big bucks for a franchise comp that has no big stars in the men’s tournament. The ECB might argue that once they get the money from the sale, they will be able to afford some more superstars, but that’s a chicken-and-egg argument: they can only afford the big stars if they sell the teams for a lot of money; but if there are no overseas stars, the teams won’t be worth that much, and they won’t be able to afford those top players.
As for sponsorship, the ECB is constantly struggling to keep it’s current sponsors on-board – the idea that someone is going to come along and give them “Barclays” Premier League kind of money is for the fairies.
It is worth bearing in mind that Modi may not be a disinterested party here – he could be “just commenting”; but he (or friends of his) could also stand to gain from low-balling the ECB on the team sales if they are planning to invest nonetheless.
Whatever the case, the ECB needs to wake up and realise that these are the kinds of people you are trying to get into bed with – people who will publically throw cold water on your proposals by shamelessly leaking confidential documents and daring the ECB to do anything about it. Of course – sources leaked the tender documents for Tier 1, including to us; but they did it anonymously, because they realised that they were taking a risk by doing so. But Modi knows he is taking no such risk – it was a power move – Modi is saying: ‘I can leak your confidential documents and there is nothing you can do about it!’ The ECB should sue, but won’t. In which case, we know where all the power lies if we continue down this road and (clue!) it isn’t with the ECB.
