ACE Raises $100> Million for New US Cricket League

ACE Raises $100> Million for New US Cricket League

January 25, 2023

ACE Raises $100 Million Plus for New U.S. Cricket League

While much has been written about the

, there has been an influx of capital flowing into American cricket too. American Cricket Enterprises (ACE), the entity operating Major League Cricket (MLC), has raised more than $100 million.

ACE founders Sameer Mehta, Vijay Srinivasan, Satyan Gajwani and Vineet Jain –and the balance of company investors– are betting the league will be able to draw the sport’s top players and attract interest from fans around the globe, becoming a staple of the cricket calendar in the process.

If it can, club valuations will “grow like a hockey stick,” Sanjay Govil (chairman, Infinite Computer Solutions and CEO, Zyter Inc.) said. Govil owns the team in Washington D.C.

Dallas, San Francisco, Los Angeles, New York City and Seattle will also have clubs playing in the inaugural ’23 season, which is slated to take place from June 13-30.

But ACE’s backers are focused on more than ROI. The collective wants to promote the world’s second most watched sport in the United States, make it an Olympic sport in time for LA2028 and get it sanctioned by the NCAA.

Cricket has enjoyed a long, if not necessarily illustrious, history in the United States. The Philadelphia Cricket Club, the oldest country club in country, was founded in 1854.

However, the game has never been played at an elite level on U.S. soil. “The only [world-class] players who have come to play here are retired players,” Govil said.

That is largely because the country never had a league, that operated under International Cricket Council (ICC) auspices and was able to draw star players in their prime. The ICC is the sport’s governing body.

“If [a league] is ICC approved, and [another country’s] domestic cricket board allows its players to play outside,” a player can participate in a tertiary league, Govil explained.

Players who participate in non-sanctioned leagues, or in sanctioned leagues without their local board’s approval, may be in violation of their domestic league contracts and deemed to be ineligible for national team participation–the pre-eminent honor for those in the sport.

Crushing debt and a trio of ICC suspensions kept the U.S.A. Cricket Association (USACA), the previous governing body for the sport in the U.S., from launching an authorized domestic league. USACA was

from ICC membership in 2017.

USA Cricket has since replaced USACA. The ICC member approved ACE to operate a new league in the market.

MLC team owners are hopeful that most international boards will give their players permission to play during the domestic league’s offseason. “We are not competing with [them],” Govil said. “We are augmenting more viewership [for the sport] and trying to promote the popularity of the sport in the U.S.”

However, some are likely to still resist–at least initially. It's not hard to envision Indian Premier League clubs viewing MLC’s emergence as a potential threat to their skyrocketing valuations.

There are some existing ties between the two leagues that could make the IPL more inclined to cooperate with the upstart league. For example, Bollywood actor and Kolkata Knight Riders owner Shah Rukh Khan also owns MLC's Los Angeles franchise.

ACE could also try to placate the IPL with a revenue-sharing agreement.

ACE investors hope to convince the IPL, and ultimately the Board of Control for Cricket in India, to let their athletes participate. But even if that effort fails, Govil believes there are enough good players from Australia, England and the West Indies for MLC to put forth a compelling product.

Pakistani players, who are not allowed to play in the IPL, could also land on team rosters.

Historically speaking, cricket has been promoted to the expat population in the U.S. “Now what’s happening is, the next generation, kids who were born here, are getting into cricket,” Govil said.  

If MLC can attract world-class talent, existing fans of the sport stateside will embrace it. The league may even be able to cultivate some new fans. Americans expect to see the best product in the world.

MLC expects to sell out its 7,500-10,000 seat venues. But the investment case for ACE is largely based on the idea that fans around the world will watch on television. “Providing a world class level of cricket, delivered with the style of American sports entertainment, is sure to drive tune-in during the summer among millions of fans in the United States and worldwide hungry to watch thrilling T20 action,” Mehta said.

If international fans do embrace the league, MLC could generate meaningful international media rights revenues. For perspective, the last IPL tender had four packages. Viacom18 bought the TV and digital rights in the U.K., South Africa, Australia, New Zealand for ~$130 million. Times Group paid ~$60 million for those same rights in MENA and the U.S.

William Mao (SVP, global media rights consulting, Octagon) does not expect MLC to command that much money anytime soon. “The latest IPL international deal values are not indicative of a high quality, upstart league. They are for the premier, pun-intended, professional league of the sport, [one] that has been established in the market for 15 years,” he said.

Even with a lucrative media rights deal and sold-out venues, Govil said it would likely be a few years before his franchise was profitable on a cash-flow basis. He does expect the value of the club to grow over that time.

ACE has raised capital from a collective of successful entrepreneurs and high-profile executives, including Microsoft CEO Satya Nadella and Adobe chairman and CEO Shantanu Narayen. However, there are plans to expand the group as the league matures and grows.

Govil said prominent sports-centric VC and PE firms have already reached out to express interest in participating in future rounds.

ACE has not disclosed the valuations assigned to MLC clubs. However, it is believed the owners who were granted rights to founding franchises made eight-figure investments.