Multi-Club Ownership in Franchise Cricket

The current model is ripe for disruption...

I speak to a lot of agents. The media likes to portray them as negative on sporting industries, but on the whole my experience of them is that they are decent people who are looking to maximise their client’s opportunities, and therefore income.

They are good talkers, though. When I first started out they used to try and sell me players with the idea that they were some form of hybrid between Virat Kohli, Rashid Khan, Andre Russell and Jasprit Bumrah - which obviously is a considerable exaggeration of their client’s talents.

Unsurprisingly, you probably won’t be stunned to find out that agents soon learned that they weren’t able to pull the wool over my eyes in that area, and therefore gave up that pursuit very quickly. It doesn’t stop me having a good relationship with most agents though, and generally just having good conversations about the industry.

Remember that I mentioned about them being keen to maximise their client’s opportunities, and therefore income. They are very good at doing that. They still are very capable of getting their players placed at teams, as some of the recent conversations I’ve had illustrate.

Agent Influence on Player Recruitment at Multi-club Ownership Groups

Over the last couple of weeks I’ve chatted with agents delighted at getting their players contracts with ILT20 teams, with the clear messaging being that it was the agents input which got those players deals. I’ve also heard recently that a prominent ex-player, influential with a particular agency, is now running recruitment for a major T20 franchise. This reminds me of football 20+ years ago, where agents used to somehow get a big transfer for their players by sending highlights videos to managers.

This isn’t really about agents though. As I’ve stressed, they are always going to do as good a job as possible for their clients, and no one should expect anything different.

Fans generally have an over-inflated expectation of the processes and strategy discussions teams have, and all of the un-named teams mentioned above (I’d love to mention them, but it’s probably not wise) have something in common - they are all part of a multi-club ownership group of teams.

Even someone as connected and experienced in the industry as myself was very surprised at how these agents were able to influence multi-club ownership groups. You’d think that these teams would be run far more efficiently, with a sporting director and head of recruitment controlling recruitment operations and overseeing the entire group of teams, with detailed player databases and scouting networks ensuring they work together for maximum mutual benefit. However, this isn’t even close to being the case currently.

So, what are the implications of this?

With multi-club ownership groups continuing to expand - The Hundred will be next, particularly for those teams who cede control to a majority shareholder - this is a very relevant conversation which will turn towards their processes and how they are extremely ripe for disruption.

In football, multi-club ownership groups such as City Football Group and Tony Bloom’s Brighton empire are showing far more efficient examples of best practice in this area. Furthermore, Michael Edwards’ return to Liverpool was not in previous role of Sporting Director, but as FSG’s CEO of football, with his role including finding potential new partner clubs.

Let’s have a look at some of the benefits of multi-club ownership.

Clear Style of Play and Identity

If Manchester City want to play, for example, a ‘tiki taka’ passing style of play, it makes no sense for some of the other teams in their multi-club group playing like Stoke City when Tony Pulis was their manager. The style of play and identities of the various teams in the group needs to be aligned as closely as possible to assist with players moving across the teams in the group.

In a cricket context, a simple example might be that an IPL team whose style of play features a very attacking, boundary-hitting batting group should ensure that their ILT20/CPL/SA20/MLC/Hundred etc teams are set up to play the same way - there’s no point for their teams in other leagues not adapting a similar identity and signing a batting group of anchors instead.

Coaches & Support Staff

This requires coaches who advocate the style of play which the group is trying to achieve, and the further benefit of the multi-club ownership model is that coaches at some of the feeder teams can get experience and exposure to prepare them for a job at a higher level. Essentially, a conveyor belt of coaches and support staff is possible, with all buying into the overall methodology - if the head coach decides to move on, there should be someone already in the group who will be well equipped to replace them.

Scouting & Recruitment

Considering this, there is huge scope for franchise cricket teams to improve their efficiency in various areas, with the first obvious growth area being recruitment, squad building and scouting/talent ID. A multi-club ownership group sharing resources in these areas makes for significant information sharing, efficiency gains, and also cost saving. Whoever the Sporting Director/Head of Recruitment is at the top of the tree for the multi-club group, they should have an extremely detailed knowledge of the global player market.

Further, it allows the bigger T20 franchises (e.g. IPL teams) a low-risk opportunity to test out players at their smaller clubs to find out more about players (for example, ability, personality) before making a bigger investment. Let’s say an IPL team is considering buying Allah Ghazanfar (a young spinner with huge potential) in the upcoming mega auction - it makes sense for them to sign him for their CPL or ILT20 team first. Scenarios like this is why I’m pretty surprised that no IPL team has invested in T10 teams yet, because it gives a great opportunity for very low-cost entry into the market enabling increased scouting potential and information sourcing.

This allows easy ‘vertical integration’, where teams can efficiently have control of the careers and development of players, which we may see in franchise T20 in the not too distant future with players signed to year-long contracts with one ownership group.

All of the above would totally negate the opportunity for agents to place players with teams in that group, as well as preventing them being economical with the truth about the ability of those players - making the industry both more professional and more meritocratic.

Diversification of Business Portfolio

Investors tend to prefer a diverse portfolio, as opposed to focusing on one company only to invest in. T20 leagues and teams still have the scope to be unstable investments (as all sporting teams generally are), so having an array of teams in various leagues makes a lot of sense in terms of diversifying risk.

Growth of Brand & Exposure

Although I’m unconvinced that the most was made of the opportunity, St Lucia Kings winning the CPL should have benefited the Punjab Kings brand. It might also put Daren Sammy in line to be the next PBKS head coach if things don’t work out with Ricky Ponting.

Marketing might also be easier for a multi-club group. Let’s say there’s a kit manufacturer for an IPL team who are struggling to break into the English or American market. Working with a multi-club group who own an IPL team as well as a Hundred and MLC team too enables growth for that kit manufacturer, and that benefit can be reflected in the multi-club group having more power in contract negotiations with that kit supplier, as well as all the teams having similar brand identities.

In addition, if long-term profit from a sale of the multi-club group is the key objective for owners, having a successful group of, say, five teams combined should have a greater value than five individual teams alone.

Work Permit Regulations

In football, teams can also benefit from working around British work-permit regulations, although this isn’t quite as relevant in cricket. It probably wouldn’t yield enough benefits to make it financially worthwhile, but in theory an English county could buy a team in Zimbabwe or Ireland - two smaller Test match countries - where they can place an overseas player who can’t get a long term visa for county cricket until they have played 20 T20 matches in a Test match nation in order for that player to get game time.

Perhaps they could also buy a team in an associate league (e.g. Scotland) and place overseas players there for several years in order to get a nationality change for these players to qualify as domestic players.

These are extreme examples but it does show the potential for positive outcomes from rule manipulation when multiple clubs in various countries are owned by the same group.

Opportunities for Disruptors

It is clear that if mutli-club groups can take advantage of the above benefits that they would have the scope to make clear efficiency gains.

It would not be absurd to think that in a weak five or six team T20 league with various teams adopting poor processes (many leagues around the world!), that a smart multi-club group could produce a team with a 40-50% chance of winning the title in a given season - incredible numbers which if extrapolated to many leagues over numerous years would lead to multiple titles and increase in the brand value for the ownership group.

While there are a number of multi-club ownership groups in cricket, it is evident that many are not even coming close to achieving these efficiency gains - leaving the market wide open for disruptors to come in and do just that.

Barriers to entry are pretty minimal - anyone can own a team and the cost of buying teams in many leagues is low - so compared to football or American sports, it would be easy to get a multi-club ownership group off the group and achieve success in a relatively short space of time.

Anyone interested in discussing how I can help their team with strategic management and data-driven analysis can get in touch at sportsanalyticsadvantage@gmail.com.