Cricket Business : ECB worried, cricket counties facing $105M loss of revenue

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The England & Wales Cricket Board (ECB) funded cricket counties are facing an £85m ($105m loss of revenue if “the very real possibility” of no cricket this summer becomes a reality, according to a new report by UK based financial advisory company Oakwell Sports.

“Covid-19 will make a bad situation worse for first-class counties,” the report adds.

And it warns that a postponement of the first season of The Hundred until 2021 is “very likely”.

Also Read: ECB confirms InsideSport report, West-Indies series and all other cricket postponed till July

Despite the £61m ($75m) emergency interim support launched by the ECB, there will still be a shortfall of over £20m ($25m) in the county system. As a result, many of the counties may need to look to external sources of capital in order to remain in operation. The report claims, bigger clubs such as Surrey and Warwickshire with revenues of £24.4m ($30.29m) and £26.6m ($33m) respectively have a larger proportion of revenue from match-day, conference, and events income ( 73% and 84%). Smaller clubs don’t escape jail though. For instance, Worcestershire and Derbyshire may have an ECB grant dependency of 53% and 52% but have less sustainable business models.

Indeed, the average % of income for non-test match hosting grounds that come from ECB grants is 45%. The overall net debt position of the 1st class counties also points to a financially unstable ecosystem which will result in more counties facing the same issues as Durham in 2016. Funding the counties is only one of the 3 expenditures that the ECB has. It also funds grassroots and national teams. This is 1 more than the RFU and FA.

Unlike the Football Association and Rugby Football Union, the ECB funds professional clubs as well as the international and recreational game.

“By having less than 18 counties, or by having a structure whereby counties were privately owned, the ECB would be able to create a more self-sufficient, sustainable county system,” the report says.

If the ECB remains committed to an 18 county system post Covid-19 it could look to an ECB Bank funding solution for its member counties. Oakwell explores this solution in the report.

The expected postponement of ‘The Hundred’ prevents a £1.3m ($1.61m) dividend to each county, leaves the 8 host venues short of their £65k ($807K) hosting fee, 30%  of ticket revenue from their home games and hospitality income, and leaves the ECB likely facing further marketing costs to reignite excitement in the tournament that will compete with Euro 2021, Tokyo Olympics and the British and Irish Lions tour of South Africa for TV viewership.

Oakwell report has made 3 recommendations to the ECB including the gift of an equity stake to each county in The Hundred.

The report further suggests that matters might even get worse for ECB if the ICC T20 World Cup in Australia gets cancelled. The T20 cricket world cup due to be played in the Autumn in Australia may be postponed or cancelled, impacting the distributions that the ECB receives from the ICC.