Warwickshire County Cricket Club Accounts 2023

Two good years in a row!

Warwickshire County Cricket Club (WCCC) have published their accounts for the period to 31 December 2023. This post is a review of these accounts. I’ve been doing these reviews since 2018, the 2022 review is here.

Summary

This shows my two financial measures for the years 2018 - 2023. The profit measure is an after all items pre tax profit / (loss) less current tax payable. The cash measure starts with the profit (as defined above), adds depreciation, an accounts measure of the cost of wear and tear on assets such as stands etc., and instead deducts the cash cost of assets acquired in the period. Neither approach is really right or wrong but you’d hope that both would be positive and that’s what we have for 2023. Admittedly, both profit and cash are down on 2019 and 2022 years but both of those periods saw WCCC host games for 3rd parties, in the 2019 ICC World Cup and the 2022 Birmingham Commonwealth Games.

And the detail of the 2023 figures provides grounds to be optimistic about the WCCC’s future financial performance. Firstly as shown in the graph cash profits were low in 2023 but this was due to a high level of expenditure on additions relating to the Piazza and Skyline West. With this work largely complete the cash position should improve in the next couple of years before WCCC starts on the next major ground redevelopment project.

Secondly the county repaid a lot of debt in 2023. Interest bearing debt net of cash was down from £17.5m at 30 September 2022 to £12.3m at December 2023. The comparison isn’t perfect as WCCC had a 15 month 2023 accounting period, shifting its accounts date back to 31 December but hopefully, the county will (finally) continue to pay off the debt incurred in rebuilding the pavilion end of the ground.

Thirdly the ECB is intending to sell a 49% stake in the Hundred entities with the money being split 19 ways between the counties and the MCC with the remaining 51% of each team being given to the relevant staging county. There seems to be an expectation that the total value of The Hundred franchises might be £400m (I’ve seen some much higher figures quoted but not sure how realistic they are). If £400m is accurate Warwickshire will have a windfall in the region of £35m. (i.e(£400m*49%/19)+(£400m*.51/8)

Finally there is a comment in Craig Findall’s Chief Operating Officer Report, “The Club continues to see growth in domestic short format cricket with both T20 Blast and the Hundred ticket revenue increasing in 2023 compared to 2022.” Unfortunately WCCC provides the absolute minimum amount of financial information to its members in its annual report and there is no break down of the improvement. Just by going to a few 20/20 games I’d say Warwickshire has managed to keep 20/20 attendances pretty constant despite the competing attraction of The Hundred. Additionally T20 Blast Off and the Worcestershire match seem to have gained some traction as special events with bigger crowds. Steeping away from the purely financial I’d say the crowd, even at championship and Royal London matches is (a bit) younger and more diverse.

In conclusion the county is doing a lot of things right and I’m reasonably optimistic about WCCC’s future.

But….

There’s always a but in a sideonview report, well normally there’s a few of them. A couple of issues are identified below.

2023 was always likely to be a good year with an Edgbaston Ashes test and the match against Australia going to the end of day 5 will have boosted revenues. In that context the level of profit is perhaps slightly disappointing. Administrative costs increased by almost 40% (£6.7m to £9.3m). But much of the increase was down to a 15 month accounting period rather than the customary 12, and the impact of inflation.

Secondly the county has secured funding for the redevelopment of the Raglan and Priory stands and building a hotel, which does make my heart sink. Some of this is just selfishness - I like watching cricket at Edgbaston but it’s hardly the best spectator experience and the ground being turned into a building site won’t help.

There’s also a wider point that I worry about how the new build will be financed. Although there’s no proper analysis of profit and loss provided in WCCC’s accounts my (educated) guess is that the redevelopment of the pavilion end of the ground has been a loss maker. Yes there have been revenues from international matches, The Hundred, conferences and venue revenues that wouldn’t have been available without the pavilion. But subtracting: the cost of keeping the facilities up to scratch, interest on the £20m borrowed from Birmingham City Council, a realistic cost of capital on the land sold to fund the works (including the associated additional capital spend on the piazza) and the £0.75m or so a year we pay to Compass as their share of catering joint venture, I’d guess there’s never been a year when the pavilion redevelopment has paid its way. If that’s correct I do struggle to understand why the county is so keen on large scale redevelopment especially in the current high interest rate environment.

What has allowed WCCC to absorb the pavilion costs is a sharp increase, in real terms, of payments from the ECB. But its unlikely that there will be a similar increase over the next ten years.