The £1.7 million payday for English cricketer Ben Stokes to play in the IPL offers an opportunity for the wealth management industry, writes Christopher Jackson
News that Ben Stokes has become the recipient of the highest ever fee for a non-Indian cricketer in the Indian Premier League (IPL) is yet another blow to that endangered species, the cricket traditionalist. If anyone was in doubt that cricket is moving away from Test matches towards the Twenty20 format, this confirms the trend again – and where it really matters, in rupees.
Stokes, a mercurial Durham all-rounder, will play this April and May for the Rising Pune Supergiants. He isn’t the only English cricketer to have hit the headlines. With an estimated brand value of £3.67 billion, the IPL specialises in eye-catching sums. In February 2009, Royal Challengers Bangalore of the IPL bought the similarly swashbuckling Kevin Pietersen for £1.26 million. Such are the rewards that come with flair. You might contemplate going to the bar when Alastair Cook is batting; sometimes, in fact, it’s a necessary move. But when the likes of Stokes and Pietersen are on the pitch, the ground fills: fans know that anything can happen.
So it’s a much deserved payday for Stokes. But it would be wrong to say we’re talking sporting mega-wealth here. Wayne Rooney, of course, earns £300,000 a week, and will have out-earned the entirety of Stokes’ much-reported cheque in a month and a half. The cricket transfer market reflects Indian fanaticism with the sport; football remains a global obsession, with pay packets to match.
The award can also be placed in a wider perspective: Stokes won’t be moving in the same circles as the Snapchat founders any time soon. Last week’s IPO resulted in a different scale of payday for founders Evan Spiegel and Bobby Murphy. The company sold 200 million shares priced at $17 per share, for a total of $3.4 billion – and the share price is still rising. You’d have to play a lot of Indian cricket to be remunerated like that.
But cricket is still a sector worth thinking about for wealth managers. Ireland joins the family of Test-playing nations this year, and the sport’s popularity is increasing in places like Canada, Scotland and the Netherlands, albeit from a low base. Moreover there remain huge possibilities to be tapped in emerging Asia markets as the popularity of the shorter format of the game continues to grow.
Meanwhile, here in the UK, the ECB has plans to create a new and improved Twenty20 league, along the lines of the IPL and Australia’s hit Big Bash League. Based around cities and not counties, it is due to start as early as 2018. Players could be auctioned and contracted to a new league, with salaries paid for by income from a broadcasting deal. So, there are opportunities aplenty here for the wealth management industry.
Perhaps the most notable moment of Stokes’ career so far occurred off the pitch. During the Caribbean tour in 2014, Stokes – who had endured a luckless trip – broke his hand after punching a locker in frustration at a dismissal. He went on to miss the World Twenty20 finals in Bangladesh that year.
That moment of unruliness has been forgotten as Stokes has continued to mature into the best all-rounder England has produced since Andrew Flintoff, who also made the cricketing journey to the subcontinent. But it is still emblematic of the need that the likes of Stokes have for appropriate counsel and direction: cricketers, like footballers, need guidance through the complexities and demands of their increasing fortunes.
So, wealth managers, take note. Look not only to Old Trafford for your next client; look to Lord’s, and to the Wankhede Stadium.
Christopher Jackson is Head of the Spear’s Research Unit