Yorkshire CCC confident of easing their debt in next 10 years
YORKSHIRE believe they could clear their crippling debts within 10 years.
The club owe circa £24m, a figure that would rise to around £40m if they build a proposed new main stand.
Yorkshire say the construction of that stand – vital for retaining international cricket and for ensuring that Headingley is a host ground in a proposed new city-based T20 franchise tournament – would increase cash flow and expedite repayments.
Steve Denison, the Yorkshire chairman, said the club are unlikely ever to be completely debt-free as they would always be eyeing potential developments, and that “you end up in a cycle of always having a certain level of borrowings”.
However, he told The Yorkshire Post: “We would hope to have paid our current borrowings in circa 10 years.
“We are solvent, and we have got a plan to repay the existing borrowings even if we don’t do anything with the stand, and even if the new T20 competition doesn’t happen.
“If we do do the stand and the T20 competition happens, then we can repay really quite quickly all of our total borrowings.
“When you factor in those things it transforms the cash flow of the club, and that is what would give us confidence to say to the members, don’t worry unduly about the level of debt.”
Some Yorkshire supporters are concerned that the club are struggling to pay off their existing debts, around £19m of which are owed to trusts set up by former club chairman and current England and Wales Cricket Board chairman Colin Graves.
It is only Graves’s munificence that has kept Yorkshire afloat, but the Headingley hierarchy face a constant battle to preserve the ground’s international status, which can drive the funds needed to get Yorkshire out of danger.
The urgent imperative is the raising of £4m within the next few weeks to ensure that Yorkshire can finance the £16.5m needed for the new stand, with the ECB having already told them that Headingley no longer complies with International Facilities Policy.
As such, Yorkshire face losing four World Cup games in 2019 predicated on the stand’s construction and would lose international cricket full stop after that year, when their current staging agreements ends with the ECB.
“We need to get that stand built,” said Denison.
“We could survive without it, but we’d be surviving without international cricket and we don’t want to go there.
“It’s inconceivable (losing international cricket). We can’t even begin to imagine how bad that would be.
“We’re remaining positive, we’re in dialogue all the time with various parties, and hopefully we can get a solution.”
Denison admits that Yorkshire have been “putting sticking plaster over aspects of the ground for a while, particularly the main stand”.
Yorkshire had hoped that the outstanding £4m would come by way of a grant from Leeds City Council only for that proposal to gain insufficient support from councillors.
“The rest of the money needed (£12.5m) has been the subject of discussion and an area in which the council have been very helpful in terms of coming up with potential solutions,” said Denison.
“The balance as far as the cricket club is concerned will be funded through debt, and we’ve already got plans for that and are well down the line as far as that’s concerned.
“It would be at a really very attractive rate of interest and we would agree all the detail back to our members in full technicolour at an extraordinary general meeting if we do come up with the other £4m.
“What we need from somewhere, though, is that £4m, which is less than 10 per cent of the overall cost of the aggregate redevelopment taking place at Headingley at the moment that involves ourselves and Leeds Rhinos.”
On the subject of Yorkshire acquiring more debt, Denison clarified: “Our borrowings are predicated on the cash flows that we can generate, and the cash flow between now and 2019 is going to be really tight.
“The reasons for that are many and varied and include things like – we don’t own our catering rights, we’ve had international games that haven’t been the most favourable, etc, etc, but things start to change very significantly after 2019.
“We’ve got an Ashes Test that year, which will be a bonanza for us; we’re set to get the catering rights, which means that we can make money out of everything we sell in the ground, and the new T20 competition (set to start in 2020) would guarantee us an extra £1.3m a year for the first five years, regardless of whether we’re a hosting ground.
“In addition, we would be able to sell hospitality for that tournament as a hosting ground, and it would be akin to staging another four one-day internationals a year, so we would have a very good degree of certainty going forward.”