When Babe Ruth signed a whopping contract for the New York Yankees on the eve of the Great Depression he was asked what he thought about earning more than the President of the United States, Herbert Hoover: “What's Hoover gotta do with it? I had a better year than he did,” the Babe said. But three years later his salary had halved and one of the leading teams, the Cincinnati Reds, had to be bought out of bankruptcy.

In Canada, ice hockey suffered even more from the effects of the Great Depression. In the 1920s the sport had been transformed from a small, provincial tournament into an international (as far as sport across the pond can be described as international) league with new franchises in Boston, New York, Pittsburgh, Chicago and Detroit, values of which had inflated tenfold in the first half of the 1920s. The sport underwent the kind of transformation that has recently affected cricket. But between 1931 and 1942, 40 per cent of these franchises went under.

Yet, interest in hockey, baseball and other sports did not diminish during these economically barren years. If anything, it increased. The public's appetite for fun, frolics and irrelevancy was proportional to their hardship. Seabiscuit, the great racehorse, became popular partly because the story was an unlikely one: a small horse with a poor gait and an alcoholic jockey struck a chord with those fighting against seemingly insurmountable odds. When Seabiscuit faced War Admiral in a race billed as the “match of the century”, an estimated 40million tuned in to listen.

The business of sport suffers in recession but not sport itself, which is an important distinction to understand. Cricket was barely affected at all in the Great Depression - Don Bradman was Seabiscuit to Australia's hurting masses in the 1930s - or in the stagflationary era of the 1970s. But cricket, then, unlike baseball or ice hockey in the 1930s, was essentially an amateur, non-commercialised sport, run by well-meaning but amateur (in every sense of the word) administrators.

There were no franchises and little sponsorship or television money. The game was more pure, which is not to say that it is dirty now, just that it is more complex, there being more vested interests butting in between the performer and those who pay to watch.

Now cricket is a business that, though it cannot match football, baseball and others for financial clout, is run on exactly the same model. Television revenues underpin the finances of the game and from this all else springs - the wellbeing of franchises in India, the health of county cricket in England, ground advertising, perimeter advertising, player wages and sponsorship deals. There is nothing now untouched by exploitation - the next time Andrew Flintoff is about to go in to bat for England, watch how closely and showily he clutches a can of his favourite soft drink. Product placement is not limited to Hollywood.

It was the Packer revolution in the late 1970s that brought about cricket's long march to modernisation and commercialisation. There has not been a serious economic crisis since then to test the viability of the model and the events of the past few weeks suggest that the Twenty20 revolution will be the first to feel the pinch. The 20-team English Premier League has been stillborn and the fallout from Allen Stanford's alleged swindle is that the quadrangular Twenty20 tournament will no longer happen in May, nor his week-long festival in November.

If the rest of the world catches a cold when America sneezes, then the cricket world gets influenza when India so much as clears its throat and the signs are that even cricket in India is feeling the effects of the global downturn. Subhash Chandra's Indian Cricket League, which until now has survived the monopolistic tendencies of the Indian Premier League (IPL) and the supine reaction of the rest of world cricket, has delayed the third season of its Twenty20 tournament and withheld payments from players. It is understood to be reviewing its existing contracts with a view to instigating a player cull.

Even those tournaments with the backing of the Board of Control for Cricket in India, such as the IPL and the Champions League, are suffering. The Champions League did not get past the first hurdle last year due to the Mumbai bombings, but some blushes were spared because of it. Sponsorship had been hard to find and the television rights tricky to sell on for ESPN Star Sports, the rights-holder. Having purchased the ten-year tournament before the credit crunch hit for close to $1billion (now about £700million) there will be some very nervous executives at ESPN Star. When you can watch Flintoff bowling to Ricky Ponting, national pride and the Ashes at stake, why would you want to watch Darren Pattinson bowling at Tyron Henderson as the Bushrangers take on the Crusaders in a tournament with no history, tradition or meaning?

Now all eyes will be on the IPL in April, as the second season gets under way. Already the signs are that franchise-holders are finding things tougher in the second year after an average shortfall in revenues of $4million last year. Rajasthan Royals, last year's winners, are without a sponsor, while Kolkata Knight Riders and Deccan Chargers have lost principal sponsors. The warning signs were flashing red for the co-owner of Kings XI Punjab recently when he said: “These are difficult times and we need to work out ways to make sure that all the franchises survive.” Another franchise director, unable clearly to grasp that the present crisis is all about the flow of credit, said: “There is a cashflow crunch, not an endemic problem.”

Is the Twenty20 revolution a bubble on the point of bursting? It was Charles Kindleberger in his seminal book Manias, Panics and Crashes who described a paradigm for understanding bubbles. First comes the new investment, whether it be Dutch tulips, Louisiana gold, the internet, housing or Twenty20; the rise in interest attracts new, often inexperienced investors; then a euphoria takes hold that leads to a weakening of rationality; credit becomes overextended; fraud proliferates, leading to a financial crisis and the recriminations that follow. It is possible to make a case for a Twenty20 bubble on all those grounds.

But should we worry if some franchises go under, taking with them investors in for a quick buck with no real feeling or fundamental interest in the game? It is a fallacy, one peddled by Giles Clarke, the ECB chairman, in these pages yesterday, that a sport must continue to make more and more money to be successful. As the business of sport suffers under the weight of recession, cricket will have to cut its cloth accordingly.

Surrey, for example, will not be able to spend £25,000 on two games for Shoaib Akhtar, as they did last year. The ECB may have to make its own decisions on appointing a new team director, instead of paying a (no doubt) expensive firm of headhunters to do its work for it. Maybe, just maybe, the players will have to do without a full-time security officer in the Caribbean.

As finances have grown - and English cricket, as Clarke said yesterday, is in a relatively healthy position thanks to the early renegotiating of the television contract - there have been an awful lot of people who have carved out a lovely niche, none of whom is essential to the game.

The business of sport may suffer over the coming year and a few Johnny-come-latelies may hurt, but sport itself will go on. And people's appetite for the essentials - the passion, the fury, the skill, the controversy and the competition - will probably increase.