Sta£e of the Nation - County Cricket Finances

Let us look at this piece of heartening news uncovered by the poster above.

'Sussex expect to announce operating profit for financial year'

www.bbc.co.uk/sport/0/cricket/30397523

Not being an accountant, I cannot pretend to understand the vagaries of such a practice but the club intent and ambition is there
for all to see by drafting in two new top seamers for the 2015 season. 

On top of that the squad has grown and been strengthened with existing players re-signing contracts. No player has left except
Jon Lewis who has now moved up the ladder to seamer coach. All this requires additional money.

Our chairman states, "We've got auditors in at the moment so I can't nail down the exact result for 2014, but I do know we will
record an operating profit." Adding, "It's a better performance than the prior year. We're really serious about developing our
income."

The club recorded an operating profit last season too but ended up £630k in deficit, primarily due to asset depreciation. Also,
a similar fate occurred the previous year to that. In last year's accounts, the cracks were papered over by The Australian touring 
game which brought in around £230k.

We know that off-field revenue increased by 20%; we also know income from the T20 was up, due to a larger number of matches.
But no QFs in either OD tournament must have hurt and the Championship Sunday starts didn't benefit Sussex unlike certain other
counties. As for the 50 over format, that has a way yet to build a consistent audience. But the T20 match against Sri Lanka attracted
around 5,000 people which would have brought in much needed additional revenue and the home games against Somerset and Lancashire
drew above average Championship attendances.

Also, it is unclear whether the ECB £1m given to each of the 18 counties during 2013/2014 will benefit their accounts. If so, then the vast
majority should herald better news after a disconcerting number of years, where various clubs were teetering on bankruptcy. And
fortunately, Sussex have no debts, unlike the majority of TMGs, thanks to the £12m Spen Cama legacy.

The important thing is, Sussex have not lost their ambition and move into the 2015 season as potential contenders for the Championship
Trophy. As for their recent malaise in the OD tournaments, it is unclear how this can be turned around. Two new seamers may help, especially
if they can bowl at the death with control and confidence.

It is a heartening time as the county seek to emulate their recent glorious past. They go into the new season with the strongest squad
since the days of Adams and Mushy. Coach Mark Robinson is happy as there is more money available now for new players, although
question marks remain around the health of Matt Prior and the rumours surrounding RHB, as well as the lack of a top class spinner.

The financial dramas at Kent CCC never cease to amaze.

After CEO Jamie Clifford’s plans to develop a 130 bed hotel at the St Lawrence ground failed to materialise, plan B was set in
motion to build 60 retirement homes (52 two bedroom/8 three bedroom flats), constructed by ‘McCarthy & Stone’ as a bespoke
retirement scheme for the over 55s.

This was considered a done deal.

Meanwhile, Canterbury City Council leader, John Gilbey, had given the club an additional £1.5m loan several years ago on the
sole agreement that this money would be paid off when either the hotel or later the retirement homes had been built.

To the shock of everyone, planning permission was refused this week on the grounds that 'McCarthy & Stone' had not allocated any
properties for “affordable housing”. Even more surprising, the planning committee overruled the express desire of their senior
man, Steve Davies, to go ahead with the plan.

The Man Who Requires to Eat Humble Pie?



So, where does this leave Kent CCC?

One presumes the only way forward now is for John Gilbey to eat humble pie and roll the two past loans into one, unless of
course, a hotel developer is found. That, ironically, “has” passed the planning permission stage!

(John Gilbey was unavailable for comment)

wearekent.org.uk/viewtopic.php?f=19&t=2718&start=90
democracy.canterbury.gov.uk/moderngov/documents/s67175/CA1400729FUL.pdf

It will be welcomed by the vast majority of Kent supporters, if it means that the green and pleasant aspect of one of the most attractive grounds in the country is preserved. The plans submitted by Kent CCC/McCarthy & Stone were almost as ugly as the H blocks of Long Kesh or the 1960s block of flats at the Sea End at Hove (and very much closer and more intrusive to the playing area) and would have destroyed the  character and loveliness of the Canterbury ground forever, in return for what in the long-term is a relatively small amount of money.

But it leaves the club's hierarchy rocking ; the plans seem to have been turned down due to a combination of :

 (i)  a perception by councillors of arrogance on the part of the club

 (ii) the refusal of McCarthy & Stone to pay the  required sums  for affordable housing and other community obligations. This sum was originally estimated by the District Valuers Service at £1.5 million and then revised down to £831k. McCarthy & Stone contested the figures and eventually got it further reduced to £650k. But they continued to argue with the city council and offered £350k, which was taking the pee. No real surprise that the planning committee found this to be a derisory and inadequate offer.

According to  Lib Dem Councillor  and former Canterbury mayor Nick Eden-Green: "The development was refused on the grounds of scale, design and inadequate contribution to affordable housing. When the council gave a significant loan to the cricket club, we were promised things like a hotel, leisure facilities and a cricket museum and all we have so far is a bunch of houses, an ugly supermarket and now plans for more houses. This block of flats is not in keeping with the area and the contribution to affordable housing much reduced. The club said it couldn't get a hotel built and yet a Premier Inn has opened nearby whilst all this has been going on."

Ouch.

It is a particularly sweet victory for Eden-Green who has been in a long-running battle with council leader John Gilbey over various unsuitable housing developments in the Canterbury area that has grown increasingly personalised and nasty. At  a council meeting in August Eden-Green accused Gilbey of running "a personal vendetta" against him. He also made a formal complaint to  the council’s Chief Executive, Colin Carmichael, about an alleged personal  attack on him by  Councillor Gilbey at a meetng of the Local Plan Steering Group, from which Eden-Green then resigned in disgust at the council leader's behaviour.

Earlier this year Cllr Gilbey was found guilty  of divulging confidential information to a third party over a sensitive planning issue.

The leader of the opposition on the Canterbury City Council, Alex Perkins said at the time : ""There is no other example that I can remember in my 28 years in local government of any other member of the city council being found guilty of this charge. What is more - as leader of the council - his actions are surely indefensible."

Despite the disgrace, which resulted in the indignity of him being ordered to undergo retraining in his obligations as a councillor,  he has somehow managed to cling on as council leader - but for how much longer, one wonders?

Congratulations are due to the Kent members who bravely fought the plans and played their part in getting the monstrous development thrown out by lodging formal objections with Canterbury City Council during the public consultation process.

 If the club's hierarchy and Cllr Gilbey cannot get this decision of the planning committee overturned in full council, then heads will have to roll at both council and cricket club, one feels.

Somerset are first out of the traps - as usual - with their 2014 accounts. Their consistency and solidity is the envy of other
counties and this year is no different.

(Pre-tax profit)

2012: £466,791
2013: 468,703 

But wait...

2014: £239,943

Close to half the profit of the previous two years. Even so, most counties would give their county Membership away for such
a number and Somerset CEO, Guy Lavender, explains this lower figure is down to less income, partly due to no Australian touring
match which bolstered the profit in 2013 and lower attendances for their OD games.

So, what can other counties learn from Somerset's solid accounting?

: Have a consistent financial base eg. Every year £300,000 is accrued from parking and property rental. That does not change.
: Have the largest catchment area of any county.
: Have a young, vital and ambitious Chief Executive.
: Have a consistent performing side in Division 1.

Somerset are using their ECB £1m to transform the Taunton ground into a category B status which allows them to hold international
matches. Their aim is to compete with Glamorgan for the West country's most prestigious cricket venue. 

Since Guy Lavender joined the club in 2011, it is no surprise that Somerset's fortunes have improved with "consistency" being
the club watchword. As Chairman Andy Nash said at the time of his appointment, "Guy is a very rare and special talent. We are very
fortunate to have attracted him to Somerset."

www.bbc.co.uk/sport/0/cricket/30452405

Good point about depreciation, Jim.

Does 'prudent' mean more prudent than normal accounting policies require, or just more prudent than Somerset? 

Jim,

I must echo BMs view and ask why Sussex decided on 'depreciating their fixed assets' within the annual accounts when other
counties, as you suggest, do not? Is this a fair reflection on the club's financial situation when most people only read the media
headline stating either a profit or loss and rarely question whether 'depreciation' is a factor.

So, in the spirit of Christmas quizzes, is it possible for the club treasurer to explain what the recent club accounts would have
actually been 'without' depreciation included? Perhaps, then, Members can gain a far better view on how Sussex CCC are fairing
financially.

2010: -£171,000
2011: -£124,000
2012: -£325,000
2013: -£630,000

Meanwhile, below is a link explaining the recent ground developments at Taunton and the money spent. If depreciation had been included 
at a similar level to Sussex, one wonders how their recent accounts would have faired? It makes little sense that counties would detrimentally
want to make their accounts appear far worse unless there are financial advantages eg. tax? As you state, "However the headline will be an
overall loss due to our prudent accounting policies."

www.somersetcountycc.co.uk/appeal-year/development/

Since I assisted former Wisden editor Graeme Wright on his 2010 book about county cricket's finances and administration, Behind the Boundary - Cricket at a Crossroads, I've kept a close watch on these matters. I am sure Jim will correct my figures if I have got any of this wrong, but I think this is accurate:-

2013 was the only year when there was an operating loss , recorded as £65,000. But losses were announced as £630,000 after depreciation and amortization.

2012 there was an operating profit of £227,000.

2011 there was an operating profit of £279,000.

2010 there was an operating profit of £62,000.