“THE whole of the future of Yorkshire cricket and Headingley as an international ground is predicated on the building of a new main stand. That is fundamental.”
Mark Arthur, the Yorkshire chief executive, could not be more explicit after the club called an extraordinary general meeting for next month to discuss with their members a plan to raise the club’s borrowing powers to £43m to help finance the project.
Told by the England and Wales Cricket Board that Headingley is no longer fit for purpose to host international games, and that it will presently not be considered for the next allocation of matches from 2020 onwards, Arthur believes that Yorkshire have arrived at a “pivotal moment”.
Last month, Leeds City Council brokered a deal that would see a London-based private financial services company invest £35m to help fund an overall £40m redevelopment of Headingley stadium.
This will enable the new main stand to be built, shared with neighbours Leeds Rugby, who are also building a new south stand and raising the other £5m.
Initially, the financial services company would own the main stand and lease it to the council for 40 years.
The council would then grant a 40-year sub-lease to a joint venture company owned equally by Yorkshire and Leeds Rugby, which would afterwards acquire full ownership.
Yorkshire, who are circa £26m in debt, would effectively be paying £17m in rent and Leeds Rugby £18m, with the redevelopment essential not only for saving international cricket in Leeds, but also keeping the city at the forefront of international rugby.
Having made members fully aware of the club’s outline proposals and the urgency of the situation at the club’s annual meeting in March, Arthur is now confident that they will back the board’s plans at the EGM on June 26, which will take place at noon in the Long Room before day one of Yorkshire’s day/night County Championship match against Surrey.
“We are very confident that our members will support us because we are very confident in the proposal,” said Arthur.
“We’ve been open and transparent with our members throughout this process, and this EGM will update them further.
“We know that the income that we generate from this new facility will help to pay down our existing creditors that much quicker than if we didn’t build it, and obviously if we didn’t build it, the other sting in the tail is that we wouldn’t be hosting international cricket in the future.
“It’s absolutely the right thing to do.”
Yorkshire will give a fuller financial picture at the EGM as they work to sign off the deal by the end of next month.
That would ensure that Headingley’s name is in the hat for the next allocation of international games for the period 2020-2024, which will be allocated by ECB later this summer.
“All the ins-and-outs of the finances are currently being finalised,” said Yorkshire’s finance director Paul Hudson.
“But we’re not taking on extra debt. The easiest way to think of this is as a repayment mortgage for 40 years, and at the end of it we’ll take ownership.
“There is no extra debt that will come on to the club’s balance sheet.”
The new joint venture company would own trading rights for the new main stand, including catering and pouring rights, along with stadium naming rights.
Steve Denison, the Yorkshire chairman, said: “Based on forecasts prepared by ourselves and Leeds Rugby, we believe the cash flows from these assets will be sufficient to fund the lease payments over the 40-year term and commence repayments to our current loan creditors from the end of 2019.
“If, over time, opportunities for cheaper funding arise that would involve borrowings coming on to the club’s balance sheet, the board would like to be in a position to act quickly to secure the benefits for the club.
“This opportunity will allow the club to retain international cricket at Headingley beyond 2019, including seeking to be awarded an Ashes Test in 2023.
“It will also allow us to retain the right to stage the already-awarded World Cup matches in 2019 and underpins our aim for Headingley to be chosen as a host venue for the new ECB T20 competition from 2020 onwards.”
With work on the new stand now earmarked for the later start date of September, ahead of completion by June 2019, Yorkshire have released 1,600 extra tickets for each day of the Headingley Test and for the NatWest T20 Blast match against Lancashire, both in August.