LEEDS City Council is set to write off almost £1m in debt it is owed by Yorkshire County Cricket Club, in a move to help streamline the club’s finances and safeguard the long-term future of Test match cricket in Leeds.
The club borrowed £9m from the authority in 2005 to help buy Headingley stadium, and still owes £7.4m.
However it has now made an offer to pay a £6.5m lump sum in full settlement of the loan, 10 years early but £900,000 less than the full amount owed.
A new report, which is expected to be approved by the council’s decision-making executive board next week, recommends that the authority accepts the offer.
But it stresses that despite the seemingly cut-price deal, the city’s taxpayers will not be left footing the bill.
“The club, as part of a major financial restructuring which is designed to improve the financial viability of the club, has approached the council offering a payment of £6.5m in full settlement of the council’s loan,” the document says.
“While the offer from the club is less than the current principal outstanding, taking account of the actual costs of interest that the council has incurred to date in servicing the debt...it can be shown that the cost to the council of the loan has been fully met”.
The report adds that “accepting the offer would also remove the risk of the loan not being repaid in the future” and it would help the club to be “more financially sustainable, which will be crucial if the club and indeed the city is to retain test and international cricket beyond 2019”.