ECB 2024 Accounts
The ECB and grassroots cricket
I do an annual review of the ECB accounts (i.e. the England and Wales Cricket Board - if you’re looking for analysis of the European Central Bank you’re in the wrong place). The post for the 2023 accounts is here and what follows is an update for the accounts for the period to 31 January 2024.
I’m (more than) a bit late with this year’s review but I’ve taken an in depth look at the ECB’s relationship with The England and Wales Cricket Trust which is a charity, controlled by the ECB and included in the ECB’s consolidated accounts. I believe that the funding of grass roots cricket in the UK is going to decline significantly post the introduction of The Hundred 2.0.
But before we get into that let’s have a
Quick Review of the Year to 31 January 2024.
This is a graph showing the ECB’s administrative expenses from 2014 to 2024.
This shows that the very significant ramp up in administration costs, culminating in the “party year” of 2023, levelled off in 2024. The ECB’s 2024 gross profit of £269m was slightly ahead of 2023 and, with interest income sharply up to £7m, profit before tax for 2024 was £28m and profit after tax was £23m, compared to £13m in 2023.
But what I wanted to focus on was
If you go to the “about us” section of the ECB’s website the first words you see are these: “The ECB runs successful England teams, oversees domestic and recreational cricket, and runs participation programmes that get children active and playing cricket. Through cricket we want to improve lives and connect communities.”
The international teams part of the ECB’s operation is a kinda / sorta business concern whilst the improve lives and connecting people part of the mission is charitable. So the ECB is organised as a limited company which runs the England teams and controls The England and Wales Cricket Trust (The Trust) which is a charity for grass roots cricket. The ECB uses profits from it’s commercial operations to fund the Trust.
When I talk about the ECB’s accounts I’m talking about the consolidated accounts which include both the limited company and The Trust1. The surpluses from international cricket and The Hundred fund donations to The Trust. As the donations are between “ECB” entities they are not included in the consolidated accounts. But when the Trust funds charitable cricket activities those amounts are included in the consolidated accounts, presumably, within administrative expenses. As The Trust produces stand alone accounts we know that charitable expenditure for the last 11 years is:
What’s apparent here is that the sharp increase in administrative expenses for 2021 - 2024 is mirrored by an increase in expenditure on charitable activities. Charitable payments over the period 2014 - 2024 have increased by over 200% compared to 150% or so for other non - charitable administrative expenses.
This is both good news and bad news
The good news is that the grass roots game was a significant beneficiary of the increased revenue from the Sky TV deal which expires at the end of this month. The bad news is that it seems it will be impossible to maintain, far less increase, this level of expenditure in 2025 and beyond. There are two reasons for me believing this.
The ECB’s decision to give 51% of each Hundred franchise to the hosting, county / private member’s club / privately owned company will put a strain on the ECB’s finances that will reduce its capacity to fund grass roots cricket. For 2025 it seems as if the ECB’s profit from The Hundred will be £5m compared to the £15m it claimed to make in 2024. At the same time an additional £16m of TV income from the Sky deal will be allocated to The Hundred “pot” but the 2025 - 2028 Sky deal is on similar terms to the current TV contract. That adds up to a total strain on ECB finances of £26m, pretty much equal to 2024’s total profit. Without ECB commercial surpluses there is no scope for grassroots funding and the proposal that 10% of the proceeds from the sale of 49% of the Hundred franchises goes to the grass roots won’t do much to fill the gap. As set out in this cricinfo report the ECB is currently expecting to sell the 8 franchises for £350m, that is way in excess of the £140m or so that I thought a rational financial investor would pay but lets take it as accurate. The proposed revenue sharing of the 49% sale sees only 10% going to the grass roots, so £35m if the ECB achieves its £350m target. But grassroots spending for 2024 was over £25m and £35m isn’t going to go very far.
Secondly, we can see the ECB has already changed the way that commercial surpluses are used to fund grass roots cricket. Up to 2022 the ECB limited would donate (more or less) all of it’s commercial surplus to The Trust. As those charitable donations were tax deductible for ECB Limited and The Trust isn’t subject to tax, the ECB as a whole didn’t pay tax and there would be a reserve built up in the charity to ensure funding could continue through …. oh I don’t know, a pandemic or something. But in 2023 that approach stopped, now a proportion of the surplus isn’t paid as a donation but is instead retained in the commercial organisation. The Trust’s current reserves of £35m are about as low as they have been in any period since 2014 and the defunding of the grassroots is already underway. Additionally as the surplus is retained within the ECB limited that organisation has paid tax in the last two financial years further reducing the total amount available to fund cricket.
I presume the response to this would be that the eight Hundred hosts, enriched by their 51% gift of their respective franchises, will step in as grass roots funders. But this seems unlikely. Yorkshire, Glamorgan and Warwickshire all have their own financial worries. Hampshire are owned by an Indian private company who might not be too keen on charity. Surrey and MCC are already well off but neither does much to fund cricket at the grass roots.
If the ECB wanted to “improve lives and connect communities” it wouldn’t be gifting the benefits of Hundred 2.0 to the eight hosts and it’s hard to see how grass roots funding won’t decline from 2025 onwards. Hopefully I’m wrong - but I rather doubt it.
The ECB has other subsidiaries being its current 100% holdings in the Hundred franchises but currently these just recharge costs plus a small mark up to the ECB Limited which, for the moment, contains the significant element of the profits from The Hundred.