The much-derided ownership model of most county cricket clubs has given them the best chance of surviving the Covid-19 pandemic, according to Surrey’s chief executive.
With some now advocating English cricket adopts a similar finance model to that seen in the IPL, Richard Gould believes that it is the continuing predominance of members’ clubs – where no shareholder claims dividends and all profits are invested back into the club – which has afforded them a chance to “weather the storm” of recent months.
And he believes many IPL clubs are “striving” to create such a healthy structure.
Gould made his comments while unveiling record financial returns for Surrey. Against a turnover of more than £45m, Surrey declared a pre-tax profit of £6.3m. The profit is a 112% increase on the £2.75m made in 2018 and a 42% boost in year on year turnover. The club also has 13,500 members and a squad containing 13 England internationals, eight of whom developed through the club’s academy. The news comes days after Lancashire declared almost as impressive returns.
While both clubs are benefiting from a 2019 season which included hosting an Ashes Test and numerous World Cup games, they are now heading into a season in which incomes are going to be hit severely. But Gould believes that Surrey’s survival through 175 years underlines the benefits of its ownership model.
“I find it interesting to look at the ownership models of other sports,” Gould said. “With county cricket largely featuring members’ clubs, you know that in years when money is made, it’s not being taken out of the sport by shareholders or used to re-finance the purchase of the club, which seems to be the American way of doing things.
“When cricket makes money, you know it goes right back into the sport. We build bigger capacities to get bigger revenues or we invest in developing players. So the money we’ve been making at Surrey has gone into cricket – men’s and women’s cricket – and we take a lot of pride in young Surrey players going on to play for England.
“I’ve worked in football and I’ve seen the different models of team ownership. The issue for me is team versus club. Pop-up teams are all well and good, but clubs do so much more for their community and their environment.
“Teams in the IPL are actually striving to get what we have now. Look at Rajasthan Royals trying to create its own academy set-up. We take it for granted we’ve got an academy we invest in heavily. That’s what you get with clubs.
“There is a role for teams, even pop-up teams, but when it comes to it, celebrating our 175th anniversary this year, the long-term value both for the sport and the community rests with clubs.
“Although the ongoing Covid-19 pandemic will clearly be damaging to the club, the successes of last year have enabled us to approach the situation with confidence and resiliency. Our finances do give us a little bit of a cushion which should help us weather the storm.”
Gould also cautioned against simplistic valuations of the game. Michael Vaughan, the former England captain, recently used his Telegraph column to claim that County Championship cricket ran at a financial loss but, as Gould sees it, those games help create the Test team which contributes heavily to the broadcast deals.
“People say the championship loses money but I don’t think it does,” Gould said. “Most of the value from the Sky broadcast deal is from Test matches which is fed by the county system delivering quality players. I can do you a P & L on a Championship match day and say it loses money but it doesn’t if you look at all of the money coming into the game.”
Despite Gould’s long-term optimism, he has warned that county cricket has a “specific issue” which makes it even more important that play resumes this summer. For if there is no county cricket this summer, clubs would go into the 2021 season having not welcomed spectators for 18-months.
“Cricket has a specific issue,” he said. “We’ve been talking about whether we can get crowds in towards the end of this year. We’re not going to be suggesting anything other than following very strictly the government guidelines. But we hope at some stage they will allow some crowds in.
“If that doesn’t happen, we’re in a unique position. There’s no other sport, industry or leisure sector that has the risk of going a year-and-a-half without anybody in the ground.
“Around 10 percent of our revenue comes from the Sky broadcast deal, 90 percent comes from people coming into the ground. It makes sense we’re protecting the Sky contract first. But our greater risk is going a very long time without people coming into the ground. There have to be baby steps at some stage to get back to some sort of normality.”
Gould also suggested there would have to be a review into the spending involved in launching The Hundred. In particular, he cautioned against excessive spending in case it resulted in cuts to county staffs. Some 134 male county players are out of contract in October.
“We’ve been told there are no sacred cows and all elements of the game are going to be evaluated in terms of costs,” he said. “Can we afford it? I don’t know what we can afford next year. Whether it’s The Hundred, county cricket or international cricket. I know the ECB are doing a lot of work on the finances to understand the options.
“There are nearly 150 players out of contract at the end of the season. We have to make sure that there is enough money to keep every player in the game who is worthy of another year. We need to make sure money is used appropriately.
“It would seem incorrect for clubs to have such money difficulties that they have to let more players go than they otherwise would when we’re creating another tournament where even more money is going in. But I’m sure that balancing act will be done over the next three or four months.”