Share it fairly, but don’t take a slice of my pie – money and the European franchise circuit

This article is by Bertus de Jong, and was first published on his substack (@outsidethecircle) here. It is the third of a three-part series on the European summer of T20 franchise cricket.

There’s an old Irish joke that runs like this: A tourist lost somewhere in the west of Ireland asks a local farmer for directions to Dublin. Says the farmer:

With at least three new leagues debuting in Europe this summer, there’s never been more metaphorical tourists heading off in search of franchise success on the continent. But the route is a long and uncertain one, the financial weather arguably as inclement as it’s ever been, and the road ahead littered with the wreckage of forerunners. The near-universal reaction of bewildered scepticism among continental cricket fans to the announcement of another new franchise league is entirely understandable of course, as given past failures, the well that all three ventures are looking to draw from has been thoroughly poisoned.

The efforts of the Irish-Scottish-Dutch troika to get a franchise league off the ground have been well documented of course. The ill-fated Euro T20 Slam was first announced back in 2019, only to suffer through six straight postponements before the partnership between Cricket Ireland and GS Holding foundered, with insiders consistently citing a failure to find buyers for franchises as the principle stumbling block. Aside from the intervention of a global pandemic, the launch of rival leagues in the United States and the UAE siphoning off investor interest had the effect of crowding out the prospective European League, but ultimately it seems to have been a breakdown in trust between the parties that finally put paid to the venture, leaving nothing but an ongoing legal case in front of the Irish High Court and the aforementioned suspicion of all things franchise in the back of European minds. And the Euro Slam is hardly the only European franchise venture to fail to materialise on the pitch; two years ago Cricket Scotland and Abhishek Shah’s Star 333 Sports announced the Scottish Super 10 to some fanfare, with Rashid Khan, Finn Allen and Alex Hales among the pre-signed players, only for the tournament to be called off four months later.

Other efforts never got out of the planning stages. BPM, organisers of the MAX10 tournaments in the Bahamas and Cayman Islands, have had exploratory discussions with Cricket Spain among others, while Neeraj Sareen and Ravi Shastri’s Pro-T10 Group had looked at options in Poland and Bulgaria before turning their attention to Thailand and eventually Malaysia. Privately, administrators from across the continent’s 32 Associate member boards report approaches of varying degrees of seriousness or credibility, and even non-ICC member Armenia (or at least some India-based social media channels purporting to represent them) have been generating AI-assisted online hype for a promised new league at Lake Sevan, already thrice postponed. That may well turn out to be yet another vaporleague, much like the Slam or the Pro10 tournament that recently didn’t happen at Kuala Lumpur (with players flying in at their own expense only to find unpaid hotel bills waiting for them) but despite the apparent pitfalls there’s still plenty of investor interest in the European market, and most boards still seem prepared to at least entertain proposals.

The ETPL, which is holding its local player draft tomorrow (July 2nd), cannot be fairly equated to these predecessors however – if only due to the heft of the names behind it on the business side and the sizeable accompanying financial war-chest. Likewise last month’s EUT20 and indeed the Nordic Smash bear no comparison to the Slam, if only by simple virtue of having actually happened. On the face of it, the persisting attraction of the franchise model in Europe for both investors and potential hosts is plain. Investors get a venue with daylight in Indian prime-time, typically 100% ownership of the competition or something close to it, and a comparatively light regulatory burden in terms of ICC oversight. Meanwhile hosts typically have negligible financial liability and can expect substantial upsides in terms of exposure and infrastructural investment, on top of licensing fees if and when the league gets off the ground. But in truth there’s huge challenges to make such leagues financially sustainable in the long term, and all parties involved are exposed to risks of one sort or another.

The financial viability of such competitions has, at least in the past, largely rested on the three pillars of sponsorship, broadcast rights and partnerships with betting or fantasy sports companies. But the latter was practically wiped out at a stroke by the proscription of real money fantasy gaming in India last August, while cricket broadcast rights are increasingly a buyer’s market. The organisers of the EUT20, for example, supposedly struck a deal with Sony to broadcast the league in India (as well as getting the comp on screens in The USA through WillowTV and the UK through Premier Sports) but ultimately will rely on sponsorship revenues rather than the sale of broadcast rights to break even. Some industry insiders even report that the rights values for fringe and start-up leagues are dropping negative, meaning organisers end up paying broadcasters to carry the product.

The consolidation of the Indian broadcast market following JioStar-Disney merger leaves new ventures facing something close to a monopsony, and such mergers have themselves been driven in part by declining revenues from the exploitation of sports broadcasting rights, cricket especially. The downturn has been substantially compounded by the aforementioned (and largely unforeseen) ban on RMFG in India and the subsequent demise of Dream11, which had not only served as a direct revenue source (some estimates putting their contribution to the global game’s finances as high as a billion USD per annum, primarily at the lower levels) but also a key driver of viewership which in turn raised the value of broadcasting and sponsorship rights.

That leaves a lot riding on sponsorship (and potentially merchandising down the line), but for unproven start-ups, securing substantial sponsorship from the off is an uphill battle. Such sponsors as can be found are predominantly gambling and gambling-adjacent brands, a trend increasingly targetted by legislators across the continent. Belgium and the Netherlands both now have tough restrictions on such advertising, and the legislative trend is toward ever stricter limitations if not outright prohibition. Even if the level of betting and betting-related advertising seen at, say, the EUT20 is currently legal (and some lawyers have doubts) there’s no guarantee that it will be five years from now.

Sales of franchises naturally provide for an initial capital injection, but one that could in theory mask a shaky underlying business model, and most owners will also be expecting a return on their investment eventually. “It shouldn’t be that you’re trying to recoup your money by selling franchises, because unless you’re looking to run a league and then crash it after five years – which should not be anyone’s intent – you’re gonna run out of franchise fees” explains one industry veteran. Franchise owners have tended to be among the most risk-tolerant investors in new leagues, and indeed some franchise purchases are labelled dismissively as “vanity projects” where would-be team owners are relatively unconcerned about the underlying business fundamentals. Arguably such a dismissive attitude toward those willing to put money into the game out of pure passion for the sport is hardly helpful, at least so long as those putting their money down are clear-eyed about the risks involved, but even so franchise fees are not a limitless resource, nor a substitute for sustainable revenue streams from elsewhere. “You can’t just come out in year one in a brand new country and charge [franchise owners] half a million or a million dollars and perhaps intimate to them that they’re going to get a return on that investment, and then they find out during or after that in fact they’re not… a degree of governance and guidelines in how these leagues are set up is absolutely paramount, else you’re going to end up with a lot of pain” a source who has worked with both league and franchise owners explained.

Team owners are far from the only ones exposed to financial risk of course. Last year the World Cricketers Association described the late- or non-payment of players in franchise cricket as an “epidemic” – a recent survey suggesting that 29% of players had experienced late or non-payment in cricket that is sanctioned by the ICC or its members. In a release published by CricExec in July, WCA CEO Tom Moffat elaborated; “the way this generally plays out is a well trodden path of agents and WCA pushing both league management and team owners to pay, whilst they each duly point the finger at each other for the delay or non payment.” The same release called for stronger controls and oversight, proposing a new dispute resolution body, requirements for the use of escrow accounts for player payments, and even withholding of ICC disbursements from boards that sanction delinquent leagues.

The latter would result in a dramatic shift of financial risk from investors to hosting boards, specifically to Associate boards – given that the prospect of the ICC withholding distributions from Full Members over such disputes is fanciful at best. Escrow accounts are certainly a useful tool, but not a silver bullet either. Anecdotally, both players and sources from the franchise-owner side confirm the WCA’s concerns about blame-shifting, the latter insisting funds were transferred to league-designated accounts on time while the former maintain it never reached them. It’s worth noting though that many of the players that have been burned in the past nonetheless seem happy enough to sign on for new leagues, suggesting that late or non-payment has almost come to be seen as a cost of doing business on the circuit. Nonetheless the effect of financial delinquency in any one league is an inevitable erosion of trust throughout the entire industry, and further complicating the increasingly difficult decisions facing cricketers whose professional careers have an inherently limited shelf-life.

Consequently there are plenty in the industry who would also welcome heavier regulation from the ICC, or at least guidance on best practices. “How can we make this franchise model work particularly in Associates or new markets? It needs not only thought but also it really needs guidelines – to say this is the maximum you can do and the minimum you can do. And say in year one these are the benchmarks you need to hit and if you get there and achieve everything you want to achieve then move on to year two and move up to the next bracket” suggested another industry insider.

One might of course make a case that calls for heavier restrictions are generally motivated by a desire to erect regulatory barriers to entry around a potentially lucrative industry, one where the term “conflict of interest” is already regarded as something of a punchline among administrators and investors alike. And indeed it’s telling that the ICC’s updated Regulations on Sanctioning of Events & Player Release apply only to new or expanding competitions, rather than those already extant on the effective date of March 1 last year. As it stands though, such regulations deal almost exclusively with limits on player participation in new leagues, having next to nothing to say about financial due diligence or the like.

The nature of these restrictions on player-participation in (new) leagues serves to further complicate dilemmas facing cricketers, especially those from test-playing countries. With only four current FM internationals permitted per league, for players affiliated to Full Member boards a national call-up for even a single match could spoil their earning potential for 24 months. It is telling that the EUT20 draft saw a wave of interest from full member players whose most recent international match was two or three years ago, and almost inevitable that financial incentives will leave fringe international players reluctant to compromise their franchise value for the sake of an uncertain international future. For those still playing, the temptation to call time on their international careers while they are still marketable will be substantial, while young prospects could be incentivised to delay an international debut.

League owners, too, face risks inherent in operating in unfamiliar jurisdictions and dealing with local boards whose politics can often be more fractious and changeable than those of full members, with no guarantee that the administrators with whom they reach an agreement will remain in office for its duration. Such political instability can indeed be exacerbated by successful leagues as much as by failures, as events across the Atlantic illustrate.

Major League Cricket (along with the UAE’s ILT20 one of only two Associate-hosted leagues to be accorded List A Status) has been held up as one of the greatest success stories of the industry, building a profitable and sustainable competition in perhaps the game’s most coveted non-traditional market. Indeed the success of Major League Cricket is frequently cited as one of the major factors driving the latest round of league-proliferation outside of established cricketing countries, its apparent success stoking a widespread fear of missing out among potential entrepreneurs and hosts alike. EUT20-backers Destino Legendss telling cited a pursuit of first mover’s advantage in the European market for the breakneck timetable in getting the league off the ground ahead of its rivals.

Yet the agreement between American Cricket Enterprises – the consortium behind the MLC – and USA Cricket had been a source of consistent rancour in American cricket since its inception in 2019. Few would argue that the MLC itself has been bad for the game in the USA, whose national team currently sit atop the CWC League 2 table and were one of the better performers at the recent T20 World Cup, but it has hardly worked out well for the game’s former governing body in the States. Even before its suspension, USAC had become something of a marginalised player in American cricket, reduced to squabbling over their cut of MLC profits, publicly accusing ACE of diluting their gross revenue share by devolving sponsorship rights to franchises and failing to deliver on infrastructure investment commitments, and finally labelling the relationship as “abusive” and voting to terminate it altogether in August last year – a decision rendered largely moot soon after as the USAC was itself suspended by ICC for ongoing administrative failures a month later and then promptly filed for bankruptcy.

Whether the same could be said of the effect of the Global T20 north of the border is an open question, but disputes regarding the league playing a major role in the ongoing legal fracas at Cricket Canada, described in a recent court ruling as “machinations and squabbles […] driven at least in part by the egos of certain named individuals.” The disputes currently dividing Canadian Cricket are manifold and complex, but stem in part from the termination of the licensing agreement with initial GT20 backers Bombay Sports (aka GS Holdings) and the on-boarding of Dallas-based NCL some weeks later – allegedly without proper board approval. While financial costs to Canadian cricket have thus far have come primarily in the form of legal fees, Justice David Crerar made plain in his recent ruling that “if these disputes and dysfunctions continue […] it may well be appropriate to appoint a receiver over that institution” seeing Cricket Canada follow USA Cricket into bankruptcy. For now, Cricket Canada has only followed its southern neighbour into suspension from the ICC -thus unable to sanction any new league and incidentally leaving the door open for the ICC themselves to step in and approve the MLC’s mooted expansion into Canada next year.

Thus while it is primarily investors, franchise owners and players that are exposed to the short-term financial risks of leagues failing, for cricket national boards, and indeed the continued primacy of international cricket, the greatest long-term risks may be found in their success. While the ongoing administrative shambles of the States and Canada are outliers (and indeed arguably predate their involvement with franchise cricket) it is not difficult to envisage the side-lining of other national boards as private money commands ever greater influence at all levels of the game. In other American franchise sports traditionally dominated by private investment, the international game is at best a sideshow and nominal national governing bodies largely irrelevant.

The analogy is not a perfect one of course, if only because in cricket’s largest traditional markets league owners and national boards are one and the same. Cricket’s Big Three all own their flagship franchise leagues outright – the IPL is owned by the BCCI, the Big Bash by Cricket Australia, the Hundred by the ECB. Cricket South Africa is at least the largest shareholder in the SA20 at 50%, but Cricket Ireland has a mere 20% stake in the ETPL, while the Zim Afro T10 is entirely owned by T-Ten Sports, whose arrangement with Zimbabwe Cricket is comparable to those typically found in Associate countries.

With just a handful of exceptions, the role of national boards in the franchise economy is thus increasingly that of mere rent-seekers, contributing little but permission under a regulatory system that grants them monopoly power to sanction leagues in their respective jurisdictions, along with control over “their” players though the requirement for No Objection Certificates – a system viewed by many (not least the WCA) as legally questionable. Both prerogatives are currently underwritten (or occasionally directly exercised) by the ICC, whose ability to wield that power is fundamentally reliant on the primacy of the international game – precisely the primacy that the expansion of franchise cricket in its current form threatens to undermine.

All told, if things continue as they are it’s far from clear that in the long term the ICC and its members will indefinitely remain in a position to impose the regulation that almost all agree is needed, nor even to manage the transformation that the professional game is undergoing, much less arrest it. There is good reason to question the long-term financial viability of even established franchise leagues, but for the time being there’s seemingly no shortage of private money willing to bet the other way and even if they’re wrong it’s worth remembering what Keynes said about the obduracy of market irrationality.

There’s every chance that the current franchise boom will outlast the capacity of the ICC to impose any new meaningful restraints on it, and under the current (lack of) regulatory structure, such rules as exist serve only to hasten the siphoning of talent, eyeballs, calendar slots and broadcast dollars away from the international game, threatening to eventually erode the foundation of the underutilised regulatory authority that the ICC and its member boards currently enjoy.

Long term then, the greatest risk posed by the unfettered proliferation franchise leagues is not that of investors losing their money (and one imagines they can likely spare it), nor even players (who are increasingly clear-eyed about the financial risks themselves, nor really to the game per se (baseball, after all, does just fine). Rather it’s to the position and relevance of the governing bodies that enthusiastically contribute to bringing it about.

In short, the franchise revolution may spare its children, but its midwives will not be so lucky.

Readers can follow more of Bertus de Jong’s work on his substack @outsidethecircle, his Cricbuzz contributions, as well as his socials: Twitter @BdJcricket, and Bluesky @bdjcricket.bsky.social.