The Counties and their Finances II

Lancashire,  Nottinghamshire, Warwickshire and Yorkshire

The March issue of The Cricketer  has a strongly worded editorial comment in favour of a city-based 2020 ‘future’, and while to be sure the editor was clearly thinking  in terms of the then expected t20 format, the editorial line was no need for fear, only winners here; before going on to mention that the domestic game is almost £200mn in debt and that the new competition from the ECB is a ‘diligently researched, meticulously constructed attempt to eradicate it’.

Both sides of the argument in relation to the proposed 2020 competition face what is a divide of sorts, if not a fault line, between the counties with international grounds in the cities and the other counties; the  legacy of redeveloping and upgrading venues one side, the risks of marginalising, if not extinguishing, part(s) of the county game on the other.

Yet, when it comes to their financial size, and the debts that are being carried, the differences between the TMG counties, with Surrey at one end of the spectrum, are often greater than the differences between them and the others. In terms of revenues, the four counties over the horizon covered by the chart, for instance,  vary from Lancashire (£258mn) to Yorkshire  (£118mn) with Warwickshire (£183mn) and Nottinghamshire (£153mn).

When TV coverage of Test cricket went commercial after 1998, Channel 4 latterly offered a contract that was so favourable to the game that it was unable to repeat it and the ECB, prioritising (centralised) revenues, traded away FTA coverage; with  risks for the  finances of individual counties passed on from the diminished visibility of the game and in the case of the TMGs, dealing with the effects of having to bid and pay staging fees to hold international cricket.

It is no surprise that the revenues from the middle of the last decade became more variable,  with the  particular years in which Test cricket was staged or not obviously important for the individual grounds. Edgbaston and Trent Bridge both staging four Ashes Tests after 2001, Headingley and Old Trafford two, creating predictable local peaks; as the for the troughs in the case of Old Trafford 2012 was a year of major rebuild, the ground that re-opened a year later, ‘a venue for the 21st century’.

There are, of course, other specifics, which impact the revenue figures, one of which being membership numbers; at Old Trafford, for example, there were  more than 13,000 members at the turn of the century, a number that had declined  to the order 5,000 by 2016, while at Trent Bridge numbers of 5,000 in 2000 have since risen by around 50%. Differences of this sort are not obviously attributable to matters of TV coverage; variations in costs and fixture scheduling, the management of member facilities would seem likely, among other things, maybe.

In a way the revenue figures are also an observation on the argument put forward by some club officials at times that the business in the cricket business is simply there to support the cricket. Centrally set limits have meant that the differences between the counties’ expenditures on their playing staff have been relatively small: the financial records over the last decade show spends by Lancashire of £26mn, by Yorkshire £24mn; the  amounts of support from business involved in putting out a team of  cricketers seemingly varying by a factor of up to two among the counties here, between 2007-16  about £1 in 6 of the revenues at Old Trafford went on paying their county players, at Headingley, about £3 in 10.

As to the debts being carried, the second chart shows the growth in the loan finance by the four counties; numbers that have risen in the last decade with ground developments at Edgbaston, where loans rose from £20K to £20mn between 2008-11 and at Old Trafford, where they rose from £3mn to £18mn during those years and where the numbers have been projected to keep rising, as they have been at Headingley, reportedly up to £40mn with the development of the football stand. As things stand something like a half of the debt in English cricket is carried by three counties, with loan finance at Trent Bridge  having peaked at the end of the last decade since when it has halved approximately.

How much of a problem is this really? Much of  the growth in debt finance in the last decade has an orthodox (and not unreasonable) justification that the cost of the ground rebuilds be paid for on a generational horizon.  Developments aimed at eradicating debts on a shorter horizon come up against the standard (and as far as it goes not unreasonable) objection that they are likely to be either ineffective, for some if old debts are paid off new ones be acquired, or un-necessary, for others manageable debts simply remain that way.

Debts from trading losses are another story and there is a something like common sense takeaway from the first chart that more stability would be a good thing, greater certainty about major match allocations for longer horizons a help and avoiding unnecessary risk-taking, it does seem reasonable to think, likewise; such as a new competition for new spectators where they simply may not exist in noticeable numbers  in one, or several, of the proposed locations for holding it.

Broadly speaking an era of commercialisation, with the centralisation of revenues and arguably more managerial influence throughout the game, has resulted in more debt. There is no obvious outward sign that this is set to change, rather that the 100 ball cricket now proposed from 2020 is the continuation of the same, at least in terms of managerial influence;  which raises the question whether the rising debt levels are reversible without, among other changes, there being larger budgetary spends on the game’s players?

 

 

 

2 thoughts on “The Counties and their Finances II”

  1. At Lancashire its the other way around; the cricket and spectators are very much a side issue. Debt has peaked at £27m much of it caused by the new hotel. Despite next year’s international fixtures the debt is so front loaded that the club can’t meet its short-term repayments of £15m and is begging for a restructuring of loans.

  2. Thanks for the comment; in the 2016 report the chairman mentions aiming for profits over and above the ECB distribution plus cricket match day receipts, i.e. about £5mn, to which it’s a long way out of line with what has happened in the past and why such an aim anyway? From a distance the business seems like a struggle.

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