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:
http://deepextracover.com/2018/02/proposed-changes-at-warwickshire-signal-a-shift-in-how-county-clubs-are-run/
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.”