Mark Rhydderch-Roberts, chairman of Glamorgan Cricket, stated that selling a 49% minority stake in the Hundred tournament will create substantial investment opportunities to support the growth of cricket in Wales.
Glamorgan, which hosts the Welsh Fire franchise at Sophia Gardens, is also exploring commercial ventures at the venue, including the potential development of a hotel.
The England and Wales Cricket Board (ECB), advised by Raine Group and Deloitte, has initiated the sale of a 49% stake in The Hundred, which recently concluded its third season in August. Around 100 potential investors, including private equity firms and high-net-worth individuals worldwide, have shown significant interest.
Although Welsh Fire’s 49% stake is expected to have a lower valuation compared to the other franchises, the total proceeds from the sales will be evenly distributed not only among the eight counties hosting Hundred franchises but also across all 18 first-class counties.
It is unclear whether Wrexham Football Club‘s Hollywood owners, Ryan Reynolds and Rob McElhenny, will submit a formal bid, despite being linked to preliminary interest in Welsh Fire.
The ECB has set a minimum valuation of £380 million for the 49% stake in The Hundred, with hopes of raising up to £500 million through the sales process. The ECB also aims to increase The Hundred’s current TV deal from £40 million annually to £120 million by 2032, driven by strong international interest.
Unlike many other first-class counties, Glamorgan has a relatively low net debt of around £2 million, following a successful reduction of debt related to the £18 million investment that upgraded Sophia Gardens to a Test match venue.
Speaking at Cardiff Business Club, former investment banker Mr Rhydderch-Roberts, who was born and lives in Crickhowell, said of investor interest in the Hundred: “Although Indian Premier League (IPL) franchise owners have had a lot of press coverage, there has been a very wide range of serious investor interest from private equity, sovereign wealth funds, North American sports investors, corporates, and high net worth individuals.
“The sale will result in an initial cash payment to each first class county at completion. Ten percent of all proceeds will go into the recreational game, and the 10 non-host venues will also retain an economic interest linked to the valuation growth of the competition.”
The chairman added: “In the case of Welsh Fire, Glamorgan will own 51% on day one and each franchise will be a separate legal and operating entity. Glamorgan can then do whatever it likes with this holding subject to orderly market rules imposed by the ECB. All the numbers to date highlighted publicly by the ECB have been calculated on a ‘base case’ valuation of £380m. This would imply that 100% of each franchise is worth £47.5m on day one.
“Although there must clearly be discounts for minority stakes and a complex sale structure that is trying to satisfy many different interests, on the basis that a number of much higher bids have reportedly been rejected, this valuation would appear to be conservative. Also, given the exponential growth in the global game, one would hope that the valuation of the Hundred and each franchise would increase over time.
“This does not mean to say that each franchise will be valued equally – clearly, trophy assets linked with Lords and the Oval will command premium valuations. The media rights attached to the Hundred will be allocated 80% to the franchises and on an equal basis. The differentials between the franchises will essentially be limited to ticket sales and food and beverage sales. So, financially, there will be little to differentiate the eight franchises.”
While Welsh Fire’s 49% stake is expected to be at the lower end of the valuation range Mr Rhydderch-Roberts, who was born and lives in Crickhowell, said: “Given that we intend to hold on to all or most of the equity gifted to the club, and given the fact that the capital distributions from the initial 49% equity sale will be distributed evenly, we feel comfortable with our place on the franchise valuation spectrum.
“We see a number of significant longer-term valuation upsides which are exciting. We are particularly focused on revenue growth and valuation upside from 2029 – at the time of the next media rights renewal.”
Glamorgan will have a veto on the minority share investor that emerges from the sales process that could be completed by Christmas or next February at the latest.
The chairman said. “It is critically important for Glamorgan that any investment partner shares our values, our strategic and commercial aims and ambition. We can then look more outwardly and internationally and develop the franchise, the club and the business. We can also relentlessly exploit any cricket synergies. I am optimistic that we can do this.
“The Hundred is effectively a closed competition, media revenues are split equally, costs are broadly similar and a draft system with a cap on salary costs is in place.
“This means that in any given year, any franchise can win. So, Glamorgan offers real valuation upside to rational investors – and is entering into any negotiations from a position of strategic strength and relative financial stability. This will help us to secure a partner who is not under financial pressure from day one and will have a broader, longer-term perspective.
“The Hundred has the potential to become the dominant short format competition in the UK time zone, and second only to the IPL in value and international significance.
“One would hope that over time, there would be a realistic prospect that Indian players, who are currently exclusively contracted by the Board of Control for Cricket in India to only play in the IPL, could be released to participate in the Hundred in the future. This would turbocharge media revenues and franchise valuations. I believe that this is possible on a rational timeframe.”
Mr Rhydderch-Roberts, who is also an executive board member of Pontypridd RFC and a board member of the ICC Wales, said the Hundred sale would provide a huge boost to Glamorgan. He explained: “At Glamorgan, we potentially have the opportunity to effect transformational change operationally, commercially, strategically and culturally – a chance to change the default negativity that is often prevalent in Wales. As a board we intend to take that opportunity.
“Welsh Fire, as is also the case with Glamorgan, is the only franchise that represents a nation – so every game is an Anglo Welsh clash. The opportunity to commercially leverage what is one of the oldest sporting and political rivalries in the world is open ended.
“No other franchise has this. We believe that both the Welsh Fire and Glamorgan brands are significantly undervalued, and that Welsh Fire particularly can become a global brand.”
Mr Rhydderch-Roberts said the women’s game has been transformed by the Hundred.
He added: “The Welsh Fire Women’s team has had a galvanising effect on participation and media interest. The experience we have had with our men’s and women’s Welsh Fire franchises is similar to that of the other seven.
“We have seen rising attendance figures with each home game on average attracting around 10,000 spectators. In addition, 47% of Hundred attendees are new to cricket, we have seen competitive matches and recorded some excellent viewing figures.
“At Sophia Gardens, we have seen 32% of tickets sold to female buyers, 34% to families and 20% of our tickets sold to juniors. This has led to a genuinely different and refreshing atmosphere at Hundred fixtures – there is a real family feel, and a different and younger demographic than other cricket formats. Obviously, the scheduling and pricing of the Hundred has played a part in this.
“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.”
The chairman said Glamorgan is fortunate in that it owns its own ground. He added: “We have invested over £4m in the last four years in general upgrades and maintenance. It remains a venue with significant development potential which we intend to exploit – including potentially a hotel on site.
“Cardiff has a shortfall of 5,000 hotel rooms and the third highest room rates in the UK. We see this as a major opportunity to boost non cricket revenues – like conferences and concerts, an area where we have underperformed.
“So, our plans to redevelop the stadium, including exploring a hotel on site, are all part of a new approach to meet these challenges and increase our commercial and non cricket revenue.
Glamorgan is a relatively small business with an annual turnover of around £8 million and EBITDA ranging from zero to £1 million, depending on our international match schedule. The successful sale of The Hundred could significantly increase our size, metrics, and valuation.
“Glamorgan is run very tightly and we are fortunate to have a board of directors who have very real and relevant business and commercial experience. Our ambition is open ended. For cricket and Glamorgan, the future is bright.”
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