County news January 30, 2016

Leics announce profit but debt remains cause for concern

The planned construction of floodlights at Grace Road is expected to increase T20 attendances © Getty Images

Leicestershire have reported an increased turnover for 2015 and a small profit - compared with a loss of £225,000 last year - but the auditors of the club's accounts have warned of a level of debt that could threaten their future viability.

Last season saw Leicestershire win their first Championship game since 2012 amid renewed optimism at the arrival of Wasim Khan as chief executive. While income increased by more than £600,000 (largely down to a bigger ECB grant) and the club recorded a surplus of £4315, the club's "net liability" stood at almost £350,000.

In Leicestershire's annual report, independent auditors Grant Thornton UK have noted the club's reliance on a bank overdraft arrangement with "no specific renewal date", the withdrawal of which could threaten their ability to continue as a business.

"These conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Club's ability to continue as a going concern," said the report.

Leicestershire's accounts for 2014, when the club's debts were around £300,000, contained a similar note. The lifting of a covenant on Grace Road in the same year does, however, give the county greater security, with the ground valued at £3.65m, and Khan was confident that progress is being made.

"Leicestershire County Cricket Club has had an excellent financial year," Khan said. "While accepting that it is a challenge when ECB funding makes up a significant amount of our revenue streams, these challenges are widely faced around the county circuit.

"The lifting of the covenant on the ground has given us financial security and, comparatively, our liabilities are pretty low. We have no medium to long term debt that needs servicing and the bank overdraft facility, which is part of our net current liabilities, is used purely for operational purposes as and when required.

"Our accounts show a significant turnaround from a deficit of £225,153 in 2014 to a surplus of £4315 in 2015 and our current cash flow is as strong as it has been in five years. Notice of a Special General Meeting has been given purely in relation to the club rules. It is not related to the publication of our financial performance in the last year."

Khan recently referred to Leicestershire's precarious position during the process to secure planning permission for floodlights at Grace Road, saying if the club could not run as a sustainable business "we might not be here in five years' time".

Earlier this month, Leicestershire secured approval for floodlights, which will enable them to play NatWest T20 Blast fixtures in the evening. The development's significance is reflected by the fact match receipts actually fell in 2015 - largely due to income from an India tour game the year before - at a time when T20 on Friday nights has become in increasingly important revenue stream for counties.

Another boost to the club's financial position came on Friday, with the announcement of a five-year naming rights agreement for Grace Road with local company Fischer Future Heat - the first time in the ground's 137-year history that it will carry the name of a sponsor.

"The club had an excellent commercial year in 2015 and further major developments have been announced," Khan said. "Planning permission has been gained for the installation of floodlights, which will allow us to start NatWest T20 Blast fixtures at a later time and help us to build on encouraging figures for 2015. A 48% increase in our NatWest T20 Blast attendances was bettered only by Yorkshire.

"Leicestershire County Cricket Club also signed a five-year deal with Fischer Future Heat, who became our first ever official ground naming rights partner on Friday. Elton John is also set to perform at the Fischer County Ground, Grace Road on June 11 and that will have a hugely positive impact on the city of Leicester as well as the club."

The club's annual report has been sent to members and a Special General Meeting has been called alongside the Annual General Meeting for February 24.

Alan Gardner is an assistant editor at ESPNcricinfo. @alanroderick

Comments have now been closed for this article

  • py0alb on February 1, 2016, 13:10 GMT

    "only play T20 games? Do you think they could survive on 8 home games a year?"

    Given that they LOSE money in huge quantities for every CC game they play, then yes, even just playing 8 T20 games a year would be a huge financial improvement in that. But 8 home games a year is absurdly low - it should be at least 12-15.

    A first class structure where the bottom 5-6 teams waste stupid sums of money paying mediocre players to just go through the motions each year in front of barely a few hundred fans is about as far from healthy as its possible to be.

    The fair thing to do would be to give teams like Leicester and Derby the choice: enter only the competitions you want to enter.

  • siltbreeze on February 1, 2016, 10:55 GMT

    PY0ALB - only play T20 games? Do you think they could survive on 8 home games a year? Or who else are they going to play? A string of 2nd XI teams? That's hardly going to bring in the crowds. Such a shame so many people seem to want to destroy our first-class structure rather than celebrate it. It's a lot healthier than most countries.

  • Peakfan on January 31, 2016, 20:14 GMT

    Ridiculous comment Chris Amys. And who will want to watch such a geographically spread side? I note that no one is blaming the county game after the win in South Africa, featuring two ex-Leicestershire players.... Northants have their financial issues but Derbyshire are a model on how to run a small, non-Test ground county. Small membership, but continually in profit and producing a number of good young players through an impressive Academy

  • Chris Amys on January 31, 2016, 16:46 GMT

    merge Leicestershire Northamptonshire and Derbyshire into a single joint Midlands cricket club. number of counties reduced from 18 to 16 creating less fixtures and space in the schedule.

  •   Bryan Kirby on January 31, 2016, 16:11 GMT

    Wind them up? Where would Notts get their players from then?

  • py0alb on January 31, 2016, 8:44 GMT

    If they only played T20 games, they would probably halve their running costs whilst seeing only a small drop off in their revenues. They'd be a fully viable business again in no time. It seems like a complete no-brainer.

  • Stumay on January 30, 2016, 22:32 GMT

    Stop messing about and just wind them and Northants up. Floodlights or not, it makes no difference.

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