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Invaluable council

As counties struggle to adapt to changing economic times, their local councils have become important allies

Chris Stonor
A Hampshire groundsman mowing the square, Ageas Bowl, April 8, 2013

Hampshire's Ageas Bowl ground, where a Hilton hotel is under construction, is owned by Eastleigh Borough Council  •  Getty Images

It was the golden summer the ECB promised us. As the sun glistened over England's green and pleasant land, the Ashes were retained with a comprehensive 3-0 win in front of packed crowds; the Friends Life t20 tournament bathed in a 70% attendance rise from last year; and even the maligned Championship savoured above-average audiences.
Yet this summer's cricketing exuberance may never have occurred if it had not been for the unsung heroes of the sport - English councils. Often the lenders of last resort, during recent years they have not only financially supported the redevelopment of the Test match grounds but even saved some counties from almost certain bankruptcy. Gordon Hollins, the ECB's Managing Director of Professional Cricket, readily concedes: "We owe councils a big debt of gratitude. They are important allies."
Hampshire are a prime example. They have much to thank Eastleigh Borough Council for. They were once insolvent to the tune of £1.2m, until entrepreneur Rod Bransgrove bailed out the club in 2000. He had a vision: create one of the best cricket stadiums in the world. Cost: £48m. The work began but the 2008 credit crunch put paid to his dream when banks stopped lending. The club was now in far greater debt than ever before. Enter the local council leader, Keith House.
"We concluded the project was excellent for the community and would make a sound return for the council. So we stepped in," he recalls. "Without this intervention, Hampshire would have fallen into economic difficulty."
More recently, Kent were staring into a fiscal abyss until John Gilbey, leader of Canterbury City Council, offered support - a £5.5m loan in two tranches. Unfortunate commercial decisions along with rising players' wages had crippled the club financially, leading to a £2.54m deficit over five years - a huge sum for a ground with no international cricket.
"If we had not done this, the club would have got into severe financial straits," Gilbey says. So why get involved? "The financial decision is about the impact a county has on the local community, the income and jobs gained or lost, and the well-being it can offer local residents."
When Durham City Council lent their county club £2.8m this year to increase the ground's seating capacity in anticipation of the Ashes Test in August, it was about the stimulation of commercial growth and jobs in the North East.
Neil Foster, a councillor holding the portfolio for economic regeneration, explains: "Research shows that just one major Test match can attract an additional £20m to the area, with hotels and restaurants particularly benefiting. Anything which commercially improves the local community and attracts new people to the area is worth an investment."
On the back of the Test, the council created a music festival and various family events where even the local records office was busy with Australians seeking their English ancestors.
House is more bullish. "The Ageas Bowl along with the four-star, 175-bedroom Hilton hotel, will create 500 new jobs and £50m extra annual revenue for the local economy," he says.
For county clubs, a partnership with their council is a no-brainer. Unlike banks or private investors, loans from councils are usually flexible, with payment terms often close to the sublime
For county clubs, a partnership with their council is a no-brainer. Unlike banks or private investors, loans from councils are usually flexible, with payment terms often close to the sublime. When Warwickshire borrowed £20m from Birmingham City Council, an agreement was made that the loan, along with interest, should be paid off over 30 years. Annual payments were £1.3m.
"We have as much debt as anyone but this doesn't keep me awake at night," Warwickshire chief executive Colin Povey says. "I feel comfortable with our deficit."
This stress-free slumber is due to a generous understanding with their council, which means Warwickshire are presently luxuriating in "a payment holiday".
Ian Ward, deputy chairman of Birmingham City Council, expands: "From July, we granted the club an 18-month payment break and extended the loan period to 32 years. Edgbaston was not given an Ashes Test for 2013 and this will have a detrimental effect on their income."
As no other Test generates as much money, the need to host an Ashes Test is extremely significant for a Test ground. But given there are just five matches in a series and two go to Lord's and The Oval, there are only three available for seven other TMGs - to use the ECB's terminology - to fight over.
"The competition is fierce," Ward admits. "But we're confident of the club's business model."
Foster, seeking similar rewards for Durham, says: "While Durham has an ODI next summer, we'll do everything we can to help the county host another Ashes Test. That is the event which attracts the most revenue to the area."
What offers comfort to councils is that a popular Test match is the biggest income-generating sporting event of all. It is like five major football matches in a row.
Yet some may argue that counties have councils over a barrel. Allowing a county to go bankrupt, especially if taxpayers already hold a large investment, could be deemed political suicide. Conversely, having an international venue at your doorstep is highly prestigious for the area.
"We may have further talks with Warwickshire down the road," Ward says. "Perhaps further payment holidays will be required. But we don't envisage a default."
Community is a key word for TMGs. The ECB wants clubs to interact more with their public. "County grounds must have a relevance within their community," Hollins says. "This has slipped in recent years."
Councillor Gilbey believes such community ambitions are essential. "We applaud the ECB's initiatives," he says. "This is a primary reason why we kept Kent afloat as it stretches beyond cricket."
When it comes to community involvement, Nottinghamshire are a shining example. Tracey Francis, Notts' head of community sport, is leading the way with her team's pioneering work. Notts cricketers must attend, as part of their contract, at least eight different community events a year. These may include meetings with juvenile offenders and discussions on bullying at local schools, to coaching youngsters, giving out awards and attending general Q&A sessions. Shy players are sent on public-speaking courses.
This contribution has helped to reduce local offences amongst the young by 75% and saved the Nottinghamshire constabulary over £500,000. "By interacting with our local community, we are attracting a new and larger audience to cricket, more sponsors and advertisers, while increasing our hospitality and conference business," Francis says. "It's a win-win for us."
As reward for this remarkable work, the ECB presented Trent Bridge with two Ashes Tests. Back in Birmingham, councillor Ward ruefully admits: "Nottinghamshire are a lesson for us all. We expect Warwickshire to make a far more positive contribution to their community in the future."
Meanwhile, there is no free tea, as Hampshire are discovering. After Eastleigh Borough bought the Ageas Bowl for £6.5m in 2012, and with the club now paying an annual £420,000 rent, Hampshire, like Middlesex at Lord's, are a tenant. But with a highly ambitious councillor like House at the helm, it is not inconceivable that Hampshire may one day find themselves overshadowed by bigger commercial fry.
"We are positioning the Ageas Bowl to become one of the world's top leisure and sports venues," House says. "Only 6% of the hotel trade will be for cricket. The majority is for conferencing and the local cruise liner and airport markets. We aim to promote an increasingly wide range of activities throughout the year, where cricket plays only a part role."
In part two, to be published on October 3, we look at the year-round business plans the counties have lined up and how the ECB is ensuring all 18 survive in a challenging financial landscape