A group of technology billionaires including the bosses of Google and Microsoft have triumphed in an auction of the Lords-based London Spirit team in a deal which will set a record benchmark for the sale of a sporting franchise.
Sky News can exclusively reveal that the consortium led by Nikesh Arora, the chief executive of Palo Alto Networks, and including Google’s Sundar Pichai and Microsoft’s Satya Nadella saw off fierce competition during a live auction conducted by the England and Wales Cricket Board on Friday afternoon.
The deal dwarfs a £123m transaction struck on Thursday for the Oval Invincibles franchise by the ultra-rich Ambani family, and means the ECB will receive proceeds from London Spirit of about £145m.
That will take the total proceeds to the ECB – for distribution throughout the sport – after three of the eight franchise sales to close to £250m.
Money blog: Cheap supermarket tea beats Yorkshire to be named tastiest
The blockbuster price underscores the intensity of the bidding for the most prestigious name in the Hundred tournament, allied to Lords’ enormous sporting heritage.
One source said the deal represented a world record for the price it attached to London Spirit as a multiple of the asset’s five-year forward profit projections.
Afghan women demand cricket’s governing body takes stand against Taliban
Why are MPs calling for England to boycott Afghanistan cricket match?
England cricket legend Sir Ian Botham falls into crocodile-infested waters – and is rescued by former rival Merv Hughes
Other investors in the winning consortium are said to include Egon Durban, co-chief executive of Silver Lake, the west coast-based private equity backer of New Zealand Rugby and the RAC breakdown recovery service.
The other bidders in the London Spirit process were a vehicle controlled by Todd Boehly, a shareholder in Chelsea Football Club; members of the Manchester United-owning Glazer family; and RPSG Group, the owner of the Indian Premier League team Lucknow Super Giants.
RPSG Group and the tech billionaires are understood to have engaged in a bidding war for nearly three hours before the latter group won, according to insiders.
The ECB’s stake in Birmingham Phoenix was sold to the owners of Birmingham City Football Club, Knighthead Capital, on Thursday in a deal worth over £80m.
Stakes in Northern Superchargers and Southern Brave, among others, will be auctioned next week.
Under the ECB’s plans, it intends to sell its 49% holding in each of the eight teams with the counties left to decide whether they wish to offload any of their 51% stakes.
The price of London Spirit means the ECB’s original financial projections will be blown out of the water, with the three franchises sold to date valued in aggregate at around £500m.
Follow our channel and never miss an update
Bidders in auctions with at least three participants are able to submit binding offers at 15-minute intervals, and in increments of at least £3m.
Losing bidders in each franchise may be given the opportunity to participate in the remaining processes, although the mechanics of such a scenario were unclear on Wednesday.
For franchises with only two shortlisted bidders, the auction will involve a straightforward sealed bid shootout.
The proceeds will be distributed between the hosts, non-host counties and the grassroots game.
A bigger-than-expected windfall from the process could offer a financial lifeline to a number of cash-strapped counties, with part of the proceeds likely to be used to pay down debt.
Concerns have been raised, however, that windfalls from the Hundred auction will not deliver a meaningful improvement in counties’ long-term financial sustainability.
The outcome of the Hundred auction is also likely to intensify other searching questions about the future of cricket, as the Test format of the game struggles for international commercial relevance against shorter-length competition.
The Hundred auction is being handled by bankers at Raine Group, the same firm which oversaw the sale of large stakes in both Manchester United and Chelsea in recent years.
Be the first to get Breaking News
Install the Sky News app for free
The ECB declined to comment.
