An update for Members from Club Chair Colin Graves
Dear Members,
I am writing to you amidst a week of great international cricket at Headingley. We congratulate England’s women on yesterday’s strong performance and look forward to giving the men’s side a warm welcome back to Yorkshire on Wednesday.
Now three months into having returned to this proud Club as Chair, I think it is an appropriate time to provide you with a full and transparent update on both the current financial position of Yorkshire County Cricket Club (“YCCC”) and the necessary actions that the Board is currently undertaking.
Strained financial position
As outlined in my letter supporting our 2023 Annual Report, released last month, the Club is in a very difficult financial position. I want to continue to be transparent with you and having engaged with independent financial advisors, the causes of these financial challenges are clear:
- Despite having an Ashes test in 2023, the Club recorded a £2.7m trading loss for the year, including £1.9m of “exceptional” (i.e. non-cricketing) expenses having been incurred. The Club’s recent accumulated losses now stand at more than £9million, with a further considerable loss anticipated in 2024 (largely, as a result of limited international scheduling).
- During the period 2021 – 2023, exceptional cash costs – primarily related to legal expenses, fines and settlement agreements – amounted to a total of more than £5million.
- A combined creditor balance of more than £5million having been accumulated (this in addition to amounts owed to long-term debt providers, who continue to accept payment deferrals). These balances, in respect of historical trading periods, were put on hold to prioritise the exceptional payments; they must now be cleared to enable the Club to remain operational.
- Continued dependence on long-term borrowing – now in excess of £20million – to keep the Club afloat, including a reliance on lender flexibility in continuing to extend loan terms and accept delayed repayments.
- A limited international fixture allocation, including “double fallow” years in 2027 – 2028, within which there is no men’s test match.
Unfortunately, there is no doubt that without swift and decisive action, YCCC will be fighting for its survival during 2024. The Club is approaching borrowing limits and owes crucial operating partners considerable sums, all while being consigned to further financial losses in 2024. We urgently need to take appropriate action to ensure that YCCC is financially stable, fit for the future, and – as I stated at the EGM in February – never put in this position again.
Subsequent actions
During recent months, the Board has been working extensively to secure new financing to ensure that the club survives through 2024.
In addition to £4million of new funding secured during the first quarter, the Club now requires a further £5million during the summer to ensure that it has a sustainable future.
We are currently engaged in discussions with several credible potential funding partners and are scrutinising them based on their commitment to: i) Yorkshire cricket, ii) our members, and iii) the preservation of our Club for future generations. We will continue to provide regular and timely updates, as appropriate.
While there is continued speculation around potential future cash inflows from an auction process in respect of The Hundred competition this winter, this continues to be speculation, without any guarantee. As there is no certainty around the amount or timing of payment that YCCC might receive, we cannot rely on this process and must proceed with sourcing our own much-needed additional financing.
These fundraising efforts are being undertaken alongside a thorough exercise of reducing the Club’s cost base, targeting material efficiencies and the reduction of our funding need.
Demutualisation
As discussed at our AGM in April, the Club’s current status as a mutual society continues to prove a blocker to attracting private financing. A demutualisation – thereby converting the club to a private structure, which unlocks potential private investment – appears at this point essential for the Club’s future.
My firm intention is that members’ current rights are protected and that a demutualisation would represent no change to their current interaction with YCCC. The Club would be better structured to be self-sustaining, still in existence, and to capture maximum value for YCCC from any processes such as The Hundred.
Other county clubs, including Hampshire and Northamptonshire, have successfully demutualised and are realising the benefits of this structure.
We expect to share further guidance around demutualisation and the required process in the coming months. As ever, I will look to keep members fully informed and involved.
My stewardship role
In my stewardship role, I have advanced the Club significant funds – both myself and via my family trust – to help its development, including purchasing back Headingley to regenerate the land and stadium. I have also personally guaranteed loans made by others, staking my reputation and a perhaps irrational amount of my own funds, with no motivation other than keeping the White Rose in action at Headingley. This continues to be my commitment to the Club.
I would like to state on record that in the (perhaps unlikely) event that any financial upside emerged from ongoing refinancing efforts for either myself or my family trust, these amounts would be donated in full into a charitable trust supporting Yorkshire recreational cricket, both men’s and women’s.
Call to action
Thank you for your ongoing support during my second tenure as custodian of YCCC. Rest assured that we are working tirelessly and are leaving no stone unturned in our efforts to ensure that the Club is sustainable for the future.
My ask to you is to fill cricket grounds throughout Yorkshire over the coming months; to get behind our teams and help spur our players to on-field success.
Off the field, please then be open to engagement – including around demutualisation – to ensure that the worst outcome is not forced upon us. As is the Yorkshire spirit, I am confident that with your support, we will be resolute and not let these issues defeat us.
Your Board’s ambition is aligned with members’ – to create a strong game throughout all of Yorkshire, with consistently successful teams that are regularly competing for trophies and generating pride across the county.
Colin Graves
