Sta£e of the Nation - County Cricket Finances

A return to this long-established thread given new and heightened topicality by this teaser of an article in today's Times:

Here is Atherton's story. The 'could mean relegation' line sounds phoney to me: Durham were 45 pts clear of relegation and it's hard to believe that any points deduction is going to be as tough as that. More likely taht they start next season with something like minus 24 pts, I'd say.

The line about whether it would be Hants or Kent which benefits sounds phoney, too. Two down, one up this season. So if Durham were to be penalised and thus ended up with fewer pts than Hants, there can no quesion that Hants would stay up. Even the ECB could not change the rules retrospectively and decide that three were going down and two were going to be promoted from Div Two after all.

tbh, I think Atherton has got wind of a half-decent story (ECB may have to take sanctions against Durham) and then got a little carried away and hyped it into a Dobell-style flier...

EXCLUSIVE BY MICHAEL ATHERTON


The ECB is considering whether to impose a points deduction, which could mean relegation, on Durham after giving the club financial support to survive the season that ended last week.

Durham’s debts, to the local council, the ECB and others, are thought to be in the region of £5-6 million. To ensure Durham’s viability through the summer, the ECB accelerated the annual fee payment for county clubs and rescheduled the staging fee (£923,000) for the Sri Lanka Test in May.

The ECB also provided further loans to enable the club to meet payroll responsibilities. Now the governing body will decide what penalty, if any, Durham should incur. Given the county’s precarious situation, a financial penalty would be clearly self-defeating. A points deduction, whether retrospective or for the 2017 season, seems a more likely course of action.


The County Championship season ended on Friday, with Middlesex finishing as champions and Nottinghamshire and Hampshire relegated from the first division. Because of structural changes for the 2017 season, only one county from the second division — champions Essex — won promotion. With a points sanction under consideration, it raises the possibility that the final standings may change. Durham finished the season in fourth position, 45 points clear of Hampshire, who were eighth, with bottom-placed Nottinghamshire 31 points further adrift.

Whatever the result of the ECB’s decision, there will be aggrieved parties. If relegated, Durham’s players would feel hard done by. Nor is it clear which of Hampshire or Kent, who were runners-up in the second division, would benefit. No doubt both would make their case convincingly. If penalised for the 2017 season, or not at all, other counties would feel that Durham have been allowed to remain competitive this year using money they do not have.

Because of the debts that they have built up and the intervention of the ECB, Durham will change their governance structure in the near future, moving from a private limited liability company to a community interest company instead, ensuring that any future profits will be retained and used for the good of the club. Although Durham cricket will continue to function as before, the ECB sees this change in governance, essentially, as an “insolvency event”, which means that sanctions are under consideration due to the financial regulations that govern the ECB.

The ECB is in a tricky situation, though. There is no suggestion of any financial impropriety at Durham. The club could argue that other avenues of potential funding have not been investigated because of the continuing arrangement with the ECB and that, therefore, it is wrong to consider their change of status as an insolvency event, and that they are simply a more extreme case of the problems facing many county clubs. They could argue that the problem is not with Durham, but with how English cricket is governed, pointing to the ECB’s reserves, which stand at £70 million.

Although Durham breached the salary cap in 2012, this was a one-off situation caused by the return of a number of England players from central contracts. Durham’s debts are not excessive compared with some other clubs that stage international cricket, but as a result of location and lack of diversification they do not generate the same level of revenue.

The ECB does not want to be seen as a lender of last resort, however, and may wish to send out a message that financial support comes with consequences.

Should a points sanction be imposed, Durham’s players would feel unfairly penalised. In particular, the county would point to the stipulation — made at the time of the grant of first-class status — to build an international venue and how, since then, the risk involved in hosting international cricket has shifted from the ECB to the counties. It has been costly for Durham to bid for international games against the more financially powerful southern Test-match grounds.

The players were told about two months ago of the extent of the financial problems. Since then, Mark Stoneman and Scott Borthwick have left to join Surrey. Paul Collingwood and Keaton Jennings have extended their contracts, as has Ben Stokes, although his salary is the responsibility of the ECB given that he is a centrally contracted player.


Durham have a fine record of producing top-class cricketers. Collingwood, Stephen Harmison and Stokes are among the most influential England cricketers of recent years. Durham won the second XI championship this year, as well as the under-17 competition, and the senior side have continued to perform competitively despite the financial constraints.

The Times reported the extent of Durham’s financial plight in May, before the Sri Lanka Test. Since then, the situation has deteriorated to the point where Durham would not have been able to survive the season without added help. Now the club will find out whether they are to be penalised on the field for their financial difficulties off it.

I genuinely would like to know what Lizzy Ammon's qualifications are to report on cricket matters. She first came to my attention a couple of years ago whilst listening to the county online commentaries. I have found her to be consistently ill informed about the basics of the game yet she crops up all over the place. Now whenever I encounter her I move on. I might add that there have been several other female additions to the commentaries who have enhanced them. In particular Isabelle Westbury who is also captain of Middlesex ladies and was in the Western Storm squad.

Oh, and if that happened, which county would avoid relegation to Div 2, Mr Bransgrove? My God, talk about self-serving!

northfan,

First, it's an honour to have a Forum Member from Durham CCC. You are one of only a very few. This must be a difficult and uncertain time for Durham supporters and I am sure everyone on this Board wishes you all the best for a positive outcome at the club. As to your queries.

At times, I can get carried away with my writing. The phrase 'sucked in by the hierarchy' is more graphic than a meaningful statement. Having spent a fair number of years writing about the financial crisis within county cricket, it is easy to become cynical when you see how various hierarchies have made promises to their Members only for them to collapse into a heap of debt and destructive default. At Sussex we have been incredibly lucky with our £10.6m legacy which has allowed the club to redevelop Hove without needing to borrow.

Your comment, "it was a condition of granting first class status that Durham build an international venue..." is something I was not fully aware of. I carried out some research and came across an excellent feature in All Out Cricket which describes the history of Durham where it says, "Most draconian was the stipulation that Durham had to build a ground capable of hosting Test cricket, even though only 11 of the existing 17 counties had such a facility." So, I apologise. That last sentence intrigues me. Who are these 11? Although the phrase, "had to build a ground capable of hosting Test cricket" suggests it wasn't mandatory and the ECB were not holding a gun to the club.

www.alloutcricket.com/blogs/durham-nightwatchman

Even so, the critic might argue the Durham hierarchy could have made a better fist of the redevelopment. Somerset have transformed themselves into an ODI ground with little debt burden; Nottinghamshire and Lancashire have improved and refurbished their grounds with excellent business acumen and so on. What I can't fathom is that Durham's £7.5m deficit does not seem a lot when compared with other TMGs and yet, on this sum, the club seemingly are unable to pay off even the interest. Perhaps, you can enlighten us on the reasons? Glamorgan just gave two fingers to their £15m debt and demanded and got a 70% haircut on their creditor loans. Warwickshire are given regular payment holidays on their £20m borrowing from the Birmingham City Council. And of course, we all know about Yorkshire and the Colin Graves piggy bank. Did the Durham hierarchy make bad interest deals on their credit?**

www.chesterlestreetadvertiser.co.uk/sport/durhamccc/14766983.Durham_County_Cricket_Club_debts_hit___7_5m__club_report_reveals/

I agree the ECB have been unfair to recently created TMGs but 9 doesn't go into 5 - particularly when the only major money-spinner are the Ashes tests. The Laurel & Hardy quote, "Well, here's another nice mess you've gotten me into" comes to mind. And as you say, offering second rate Test matches in May to Glamorgan or Durham makes little sense.

Once more, commisserations on your plight. I really hope the financial difficulties can be fairly resolved.

** I have just answered my own question. It resides within the Chester le Street Advertiser article. "Two council loans, totalling almost £4m, were being repaid at 4.7 and 6.5 per cent, while the charge to the Local Enterprise Partnership was 7.49 per cent on a loan which fell from a little more than £1m, to £842,852. There also existed bank loans, of almost £1m, charged at two per cent, as was a loan of £1,400,000 from the ECB." Perhaps, leedsgull can confirm but not even Colin Graves is daring to charge more than 4% on his loans - some are at 3.25%. As for Warwickshire their debt interest rate is well under 5%. A great shame Durham could not extend their bank loans at a very fair 2%.

Thanks northfan. We welcome you to this forum whether you choose to post or just to follow what is going on, though it is very good to get a different perspective, as your discussion with softandfluffy has shown. The bidding system for Test matches is one of the most blatant examples of how the current structure has become unsustainable.