Coronavirus: With England’s domestic cricket season under threat, financial future looks bleak

The 2020 English domestic cricket season was supposed to start on April 12. Most teams had flown to warmer climates for pre-season tours, the grounds had been meticulously prepared over the winter and new membership cards had landed on the doormats of tens of thousands of domestic county members. But instead the coronavirus pandemic has temporarily put paid to life as we know it.

Covid-19 has decimated the 2020 sporting calendar across the world, posing unprecedented challenges for sport organisations at every level. No sport is immune and many teams around the world could face financial ruin when the pandemic passes.

In Britain, one sport facing the real prospect of no fixtures at all this summer is cricket. The early period of the season focuses on the County Championship (four-day cricket), with attention turning to the shorter one-day formats in the warmer months of June, July and August. But a lack of fixtures brings with it significant financial uncertainty.

The summer of 2020 presented the England and Wales Cricket Board with a golden opportunity to harness the increased exposure and public interest from the national team’s success in the 2019 World Cup, held in England and Wales. A new competition, the Hundred, a city-based limited-overs franchise competition is due to begin on July 17. The new competition promised the attraction of new spectators, a rise in participation and more cash for cricket at the county level.

Now the Hundred might not start at all. The ECB has postponed all matches until May 28, after which games – at least at first – could well take place behind closed doors. May 28 is also the planned start of the Twenty20 Blast, a lucrative competition and the lifeblood of cash generation for many counties.

Cancelling cashflow

As well as this, if the England international fixture list is cancelled or curtailed, it seriously damages the cashflow at both county level and for the ECB. International fixtures are hosted at various county grounds on a rota system. The largest county grounds host Test matches while selected smaller grounds host One Day Internationals. Counties that host regular international matches are already better off financially than the others, so we could see massive inequalities appear in county cricket.

Past research on the finances of county cricket supports this argument. Counties that host international matches have an average turnover of around £10.6 million per year. Those that don’t average £4.6 million per year.

The financial pressure on counties not hosting international cricket is becoming acute. They only have three main revenue streams. One is a central grant fund from the ECB, supported by sponsorship and broadcasting income associated with the England national team. The second, matchday revenue is key to most professional sport teams’ financial health – in 2018, £11 million was generated through gate receipts across the 18 counties. About 90% (£9.9 million) of this was generated through hosting T20 fixtures, so cancellation of the T20 competition could cost each county more than £500,000.

The final income stream comes from annual memberships. Membership income for all counties was £9.5 million in 2018, ranging from £2 million at Surrey in the affluent south of England to just £100,000 at Leicestershire in the Midlands. If matches are postponed then counties may have to reimburse their members a percentage of this cost, further depleting their cash reserves.

The problem is that the counties have become overly reliant on the ECB grants. In 2018, for nine counties the ECB payment was 40% or more of their turnover (for Leicestershire it was 76%). Of these nine counties, six do not regularly host international fixtures. If the ECB payment was to be removed, only Surrey would make a surplus. Counties need to find a way to become self-sustaining.

Hand to mouth existence

This summer marked the first year of a new landmark TV rights deal between the ECB and Sky, worth £1.1 billion. The additional income will result in increases to the annual ECB payments to counties. Positive news but it doesn’t solve the reliance issue.

To make matters worse, several counties have looked to use this extra money to invest in their infrastructure (Yorkshire’s new Emerald Stand at their Headingley ground and Lord’s redevelopment of the Nursery End being two examples). These counties have taken long-term strategic decisions to finance these projects with the assumption of increased revenues, which may not now arrive.

Most counties operate on a hand-to-mouth existence. Current figures suggest only five counties would be able to meet their short-term debt commitments. The prospect of no income leaves them facing difficult decisions in how to cover costs and pay their staff. A number of counties have already made use of the government’s furlough scheme and others are likely to follow suit.

The short-term financial picture in English cricket is bleak. The ECB has stepped in to provide financial support with a package worth up to £40 million for the counties, and an additional £20 million being made available to support grassroots cricket. But some of this is money that would have gone to the counties anyway, and it will only sustain them for so long unless fixtures resume.

The latest ECB accounts show cash reserves of £40 million and they have already invested heavily in the Hundred. The question remains as to whether they can stretch their resources further to stop counties from going to the wall. Unfortunately, there is very little the counties can do other than wait.

Robbie Millar is a Researcher, Sport Industry Research Centre at Sheffield Hallam University.
Dan Plumley is a Senior Lecturer in Sport Finance at Sheffield Hallam University.
Rob Wilson is the Head of Department of Finance, Accounting & Business Systems at Sheffield Hallam University

This article first appeared on The Conversation