22 January 2011

County Finances

You might have noticed that there's been various financial announcements from Counties recently. In particular Nottinghamshire have announced that they made a profit of £190k as they had a Test, an ODI and they won the Championship. When you take last year's loss of £149k, they're just over £40k up on the last two years. I'm not sure of the exact amount the winning County gets but it's around £150k so it's quite easy to take the view that Notts are not exactly 100% healthy financially as they aren't going to win the Championship every year.

And then Leicestershire have announced that they made a loss of more than £400k, with players' wages up £230k.

Looking at a few other Counties, things seem dire with Worcestershire making a pre-tax loss of £118k in 2009, Essex losing £216k and Kent £800k (after predicting break even). Lancashire announced a record loss of £546k in the summer and shortly afterwards Stewart Regan resigned as Chief Exec at Yorkshire and warned of redundancies.

Overall the 18 Counties lose around £29m according to Accountancy Magazine before TV money from Sky (worth £50m approx to the ECB) is taken into account. And Deloitte reported in 2010 that over the last 12 years Test grounds have invested over £150m, with another £56m committed over the next 4 years. The combined debt level from the 9 Test grounds is £91m, and by 2015 the interest on that is estimated by Deloitte to be £36m. In 2011 those Test grounds will make just £17.5m from hosting Tests, if all goes well. When all the Counties are taken together there is currently "184m a year in interest payments and 12 of the 20 clubs are not able to cover their interest payments with their operating profits" according to Philip Morgan, of management consultants AT Kearney.

It's all looking pretty dire when you add in a global financial slowdown and, though I hate to say it, perhaps it will be beneficial in the long-run if some Counties are forced to close down for financial reasons. The ECB may need to look at the way Wales faced a similar situation within rugby and has come through it reasonably successfully. Whatever they do, I hope they have a plan as to how they are working with the Counties to secure an appropriate future for the English game, and there's no doubt their trying with their 2008 5-year plan across County and Club cricket.

I doubt I'm alone in worrying that what's planned so far is not going to be enough....time will tell.


Ed said...

Here's one interesting view on Leicestershire's losses!

Peter Lamb said...

When I wrote to Somerset CCC telling them that I was not renewing my membership because of the lack of proper cricket during June and the first half of July, I got a reply saying that 60% of their gate income came from Twenty20. I wonder if that percentage would be significantly reduced if the games were spread more evenly over the season.

Ed said...

Surely there is an opportunity to reflect that proportion in the pricing for membership...if you don't want to watch Twenty20 then the price could be less than half that of full membership to watch Twenty20 too?

I still think there will have to be a reduction of counties eventually....Somerset may make 60% of revenue from Twenty20 and Sussex and Essex are the other two that apparently do best out of it, but it would be interesting to know the proportion for other counties....