Glamorgan Cricket is set to receive a financial boost of around £20m from the sale of equity stakes in the franchise teams participating in The Hundred competition.
As part of the sales process, North American tech billionaire Sanjay Govil has agreed to acquire a 50% ownership stake in one of the eight Hundred teams, Welsh Fire, based at Glamorgan Cricket’s home ground, Sophia Gardens.
Both parties have now entered into an exclusivity period to finalise the deal - a process expected to take around eight weeks.
With just a few franchise deals left to be concluded, the equity sales are expected to boost the total enterprise value of the eight teams to around £900m - far higher than initially forecast.
At the outset of the sales process, some commentators speculated that Welsh Fire would have the lowest enterprise value post-investment, at around £35m. However, the investment by Mr Govil, who is understood to have rejected late overtures from other franchises, has shattered those assumptions, valuing Welsh Fire at more than double (£80m).
The valuation brings Welsh Fire on a par with Hundred franchise rival Birmingham Phoenix.
The England and Wales Cricket Board (ECB), which will ring-fence 10% of sale proceeds for the development of the game, will distribute the remaining funds among all 18 first-class counties. The eight county Hundred hosts will each receive around £20m later this year.
Non-Hundred franchise hosting counties will receive slightly more than £20m each, as host counties benefit from the commercial revenues generated from staging matches in The Hundred tournament.
Most Read
Born in Montreal and raised in India, Mr Govil later moved to the US, where his business interests include the tech consulting firm Infinite Computer Solutions and health-tech venture Zyter.
A passionate cricket fan, Mr Govil also owns the Major League Cricket franchise Washington Freedom, which is coached by former Australian cricket captain Ricky Ponting and features players such as Steve Smith and Travis Head. Washington Freedom has a player and coaching partnership with Australian first-class cricket team New South Wales.
Such is the strength of the relationship developed between the parties that Glamorgan unilaterally increased the stake it initially planned to sell (49%) by 1%, creating an equal ownership split with Mr Govil for Welsh Fire.
Glamorgan’s negotiating team, led by its chair and former investment banker Mark Rhydderch-Roberts, chief executive Dan Cherry, and club president Alan Wilkins, presented the investment proposition as an opportunity to back a national team (Welsh Fire) for Wales. This pitch resonated strongly with Mr Govil, as well as other bidders who missed out.
Former Glamorgan chief executive Hugh Morris played a key role in ensuring that the club was included as one of The Hundred’s host counties by the ECB.
Hosting a Hundred franchise and international test match cricket at Sophia Gardens would not have been possible without the vision of former club chairman, the late Paul Russell, who spearheaded the stadium’s development. His successor, Barry O’Brien, was also pivotal in reaching agreements with creditors to restructure the £18m debt incurred during the stadium upgrade.
While Glamorgan could technically reacquire Mr Govil’s stake at a later stage, he has the first right of refusal should the club decide to sell its remaining Welsh Fire interest, or a portion of it.
Don’t miss
Speaking to the Times of India, Mr. Govil described his new part-ownership deal - pending final approval -with Glamorgan for Welsh Fire as a “marriage made in heaven.
He added: “They are really nice people. I felt a real chemistry. The way the chairman Mark and the rest of his group followed up on our plans, I felt they really wanted us. They took the pains to visit me in London during Christmas on my last visit to England. Very warm and very supportive. It was always our first choice.”
The idea of investing in Welsh Fire was first suggested to him by former Glamorgan cricketer and current club president and veteran sport commentator, Mr Wilkins.
When asked about the possibility of Washington Freedom’s head coach Ricky Ponting getting involved with Welsh Fire, he said: “Possible. Why not? Why not Travis Head? Why not Steve Smith or even Andries Gous? Why not other Freedom players at Fire and why not Fire players at Freedom? I consider all my players and coaches as family.”
Regarding a potential increase in his stake in Welsh Fire in the future, he said: “We will do what is in the best interest of the team and club. That is where chemistry is critical.”
Collectively, the 18 first class counties have debts totaling £183m. However, Glamorgan is in a far healthier financial position than many of its rivals, with a net debt of just £1.6m, which it is comfortably servicing.
The financial windfall from The Hundred will allow the club to invest further in its facilities and in the promotion and development of the game at all levels, from grassroots cricket for boys and girls upwards.
It is understood that Mr Govil has also been appraised of potential commercial investment opportunities at Sophia Gardens, as Glamorgan seeks to generate additional non-cricket related revenue streams.
Although still in the early stages, the club is exploring several commercial projects at its ground, including a hotel. The club would seek a consortium investment approach for such projects, while ensuring it retains an ownership stake.
Speaking at Cardiff Business Club last September, Mr Rhydderch-Roberts said: “If the sale of The Hundred is successful, we will have additional resources to promote all formats of cricket in Wales. Underpinning all of this, of course, is the exponential growth of cricket domestically and internationally.
“So, our plans to redevelop the stadium, including exploring a hotel on-site, are all part of a new approach to increasing our commercial and non-cricket revenue.”