Cricket Australia looks to attract private equity investment

In a move that would fundamentally change the game’s finances, Cricket Australia is reported to be exploring securing private equity investment.

In the wake of having secured a $1.5 billion broadcast rights extension with Foxtel and the Seven Network, a moderate improvement on its current domestic broadcast deal, the governing body is understood to been in discussions with US investment bank Morgan Stanley about a privatisation model.

As reported by The Age and the Sydney Morning Herald, Morgan Stanley is acting as a consultant in a review the domestic game’s finances, joining a working group featuring representatives from states, territories and the Australian Cricketers Association (ACA).

Members of the group include current Cricket Australia Chair Lachlan Henderson and his successor Mike Baird, Cricket New South Wales Chair John Knox, ACA Chief Executive Todd Greenberg and Cricket ACT Chair Greg Boorer.

Under a speculated potential privatisation path for Cricket Australia, a separate entity would be created to house its revenue-raising activities such as broadcast, sponsorships and digital deals with a percentage stake of that entity to be sold to private investors to give them a proportion of the income in return for a rich capital injection worth hundreds of millions of dollars.

The move falls in line with Cricket Australia’s five-year blueprint, unveiled last August, which includes the goal to “diversify revenue streams with increased innovation”.

Cricket Australia was linked with private equity investment back in November 2021, having reportedly held preliminary talks with Silver Lake earlier in the year. However, the new domestic broadcast rights partnership with Foxtel and Seven agreed last week has reportedly opened the door for privatisation.

Cricket Australia’s seven-year broadcast extension is worth $1.512 billion, up from its current $1.182 billion deal.

The Nine group publications add that leading contenders for a stake in Cricket Australia’s commercial operations would likely arrive from the USA, meaning the likes of CVC Capital Partners and Silver Lake could be involved while RedBird Capital Partners, which acquired a 15% stake in the Indian Premier League’s (IPL) Rajasthan Royals in June 2021, is another possibility.

Commenting on the potential privatisation, Associate Professor Adam Karg, Leader of Swinburne’s Sport Innovation Research Group, advised “these discussions seem to be more and more prevalent in sport in Australia.

“Obvious extensions are likely around global and current local examples in Australia (A League, NBL etc).”