Reports have emerged Cricket Australia is considering engaging in private equity investment after meeting with private equity company, Silver Lake earlier in the year.
The reports come as the organisation is in the process of creating a new strategic plan for the next five years, with private equity investment identified as being ‘on the table’.
A report from Sydney Morning Herald revealed the organisation saw a presentation from Boston Consulting Group, which highlighted without significant revenue increases or further cost-cutting, Cricket Australia would maintain a negative cash flow upwards of $90 million over the next three years.
The report also revealed three potential models for private equity investment into cricket, including the sale of partial stakes in Big Bash League (BBL) clubs, the restructuring of the BBL and WBBL’s commercial operations into an entity separate from Cricket Australia with a stake in that equity then sold on to a private equity investor, or sell a direct stake in the commercial operation of Cricket Australia to a private equity investor.
It is believed the last option will provide the largest investment figure for Cricket Australia, with the broadcast rights, sponsorship and marketing arm of the organisation to be sold off in this situation.
This would follow suit of other national sporting organisations who have recently neared the finalisation of private equity investment deals, including New Zealand Rugby, Rugby Australia, and Football Australia.
The report from Boston Consulting Group also reportedly included the impact private equity investment would have on Cricket Australia’s structure, control over scheduling with the BBL and international Test matches, as well as cricket’s tax-free status.
