I recently interviewed Norman Gascoigne, the Chairman of Warwickshire County Cricket Club.
We talked primarily about the proposed changes to the Club constitution - see my article on Deep Extra Cover:
Then he went on to talk about a recent analysis of Warwickshire's finances by Reabank, a poster on the Bearsfans on-line forum - see http://www.bearsfans.co.uk/showthread.php?tid=3983
This is what Norman had to say:
“I read the analysis by Reabank on Bearfans and thought it was very good.
However, all counties are operating in a complex environment and it’s not easy to get underneath the numbers. What it maybe misses is the interaction that we have to have with our stakeholders, such as the ECB and the City Council.
In 2008/9, when the global financial crisis hit, Birmingham City Council were incredibly supportive in helping to preserve Edgbaston as a Members Club, primarily as a facility for the city.
In the circumstances at the time, it would have been tempting either:
to sell out and get private investors to re-build the ground
to sell Edgbaston and find a place somewhere else (Covenrty, maybe) to build a new little stadium
We chose instead to build a partnership with the City Council and the (then) Regional Development Authority. The Council have been very supportive in enabling us to negotiate loan repayment terrms to fit in with our own cash-flow.
Many other counties are in similar situations, except that some of them have taken out short-term funding, which exposes them to what in banking terms are known as re-financing risks, which we don’t have.
So whilst the Reabank analysis is right, over the last eight years, we have had to manage our business through our cash. We can’t afford to run out of cash, which is where Durham and Northants failed. We have succeeded through strong management and cost control whilst still investing in our prime function of playing cricket.
Overall, there are questions about how the ECB are going to spend the revenue from the 2020-2024 broadcasting deal. Is it one of their aims to address the £220 million of debt that sits within the 18 first-class counties – and predominantly within the major match venue counties?
In that context, it really doesn’t matter whether we are first or 18th in the financial league table. But we’ve never had to go knocking on the door of the ECB. They have been very pleased with how we have managed the business.
Do we know what we are doing? I think we do. Are we in a worse situation than we anticipated when we agrees to re-develop? Probably we are, a little bit, because we didn’t get any Test Matches in 2013/14. That took £5 million out of our cash flow. We’ve had to live with that.
So we can’t afford to sit back and think that we are OK but we are in a much better situation than a number of our colleague counties. There would certainbly be more than four below us who are in a worse situation. We don’t have the advantages of a Middlesex playing at Lord’s or the Surrey situation but, those counties apart, we are pretty well in there in relatively good shape.”