Cricket: Counties warned to mind the gap

COUNTY CRICKET is facing a financial crisis, with rich and poor either side of a divide which is widening daily and will inevitably result in a Premier League-style breakaway.

A damning report into the financial state of the game in England and Wales claims that counties which do not stage Test cricket lean too heavily on the seven-figure hand-out they receive from the England and Wales Cricket Board.

The report has been compiled by Ambition Management, which represents a number of footballers and cricketers. The man behind the report is Robert Matusiewicz, a chartered accountant and lifelong fan.

An imbalance in the distribution of ECB monies means the amount received by the half-dozen counties which stage Test cricket does not reflect the effort and expense they put into setting up internationals. Matusiewicz's report concludes that unless something is done these counties could break away.

The report warns that the game cannot sustain the 18 counties in the present Championship, and says the number of clubs has to be reduced - or natural financial wastage will see several fold anyway.

Matusiewicz, who undertook a study of last year's accounts for each of the first-class counties, says that without the ECB hand-out most would be in the red. He states: "Although all clubs rely on the ECB distribution, some clubs are absolutely dependent on it to an extent that borders on the imprudent." Underlying the figures he sees "a widening gap between rich and poor clubs".

Matusiewicz believes a reduction in the number of counties is needed to concentrate the game's resources, allowing perhaps up to a dozen to survive in a single-division championship again, reversing next season's change to two divisions.

Unless that is done, he believes, those counties which stage Tests - Lancashire, Middlesex, Nottinghamshire, Surrey, Warwickshire and York- shire - will break away, possibly taking with them one or two of the wealthier non-Test counties.

"A merger between some of the counties is one option," Matusiewicz writes. "Overall though, the prognosis is somewhat gloomy for up to perhaps half a dozen clubs. The County Championship just has to be reduced. Then it can become a realistic and acceptable breeding ground for Test players."

An alternative would be to continue with two tiers. Matusiewicz writes: "A cynical view may be that the introduction of a two-tier league is the precursor to a premier league of, say, 12 counties, with a semi-professional second division comprising the remaining (and surviving) first-class counties with some of the stronger minor county or league teams."

Matusiewicz acknowledges that without a uniform method of accounting, it is difficult to make accurate analyses. However, he says, "Fundamental business principles have been ignored: don't spend more than you earn; don't borrow more than you can repay. Remain in control of your own destiny."

Matusiewicz pinpoints an area of potential conflict between the six counties with Test grounds and the non-Test counties. The report says: "The emergence of the Test Match Grounds Consortium, seeking additional reward for hosting Test matches, is surprising only in that this group has consented to the even distribution of Test match profits for so long." He forecasts: "The issue has the potential to create wide divisions and, taken to extremes, could result in a breakaway cricket `premier league' if not resolved."

According to the report, the gross income generated by Tests and associated activities in 1998 was pounds 51m, 57 per cent of the ECB's gross revenue of pounds 88m (pounds 11m up on last year). For 10 counties, income from the ECB accounted for more than 50 per cent of gross receipts, while 43 per cent of the counties' total income was produced by the six Test grounds.

The counties received an average hand-out of pounds 1,188,000, with Surrey picking up the greatest amount, pounds 1,404,000. The lowest went to Nottinghamshire and Derbyshire, who received pounds 1,097,000. Leicestershire placed most reliance on the hand-out, their share amounting to 74.3 per cent of their total net income, while Lancashire's represented just 26 per cent.

Sponsorship and marketing account for the largest amount of the counties' income. Membership contributes approximately 11 per cent, while gate receipts account for five per cent (members attend home Championship matches for free).

Counties owning their grounds hire out their facilities - including pitches - for private use, with many staging business conferences in the winter, while corporate hospitality adds a sizeable sum. Yorkshire, in not owning Headingley, are unable to reap the benefits that accrue to Lancashire at Old Trafford.

The report appears to suggest there is little or no incentive for the counties to generate income. There is a huge disparity between Lancashire, who generated in excess of pounds 4.2m last year, and Derbyshire, where commercial activities accounted for around pounds 250,000.

Matusiewicz puts a strong case against an equal share-out of ECB cash: "The argument that all clubs contribute to the league and therefore deserve a share of the distribution is valid; the issue of whether they deserve an equal share is more difficult to justify. If the safety net of the ECB distribution is used to mask poor management and provides an excuse to ignore commercial realities, then the attitudes of those counties that are professionally run will harden."

The ECB may harden its attitude and introduce a meritocratic system whereby counties receive a grant on the basis of how much income they have generated the previous year, ascheme perhaps akin to the Lottery funding system.

Right now, though, that is not the case and Matusiewicz warns: "The tragedy... is that... it will probably require the business failure of a cricket club to be the catalyst for change... In case this is dismissed as scaremongering, the financial analysis of the counties indicates that at least three clubs display some worrying symptoms of potential financial difficulties."

A copy of the report was sent to every county and to the ECB. So far Matusiewicz has had few responses, but those he has had have been generally supportive. The ECB, through spokesman Richard Peel, admitted: "Some elements of the report are useful. A lot of effort has gone into it and any valid research and any well thought-through report has to be useful." He stressed that the ECB had already launched a five-year initiative to get the counties into a more business-like shape.

Surrey's chief executive, Paul Sheldon, welcomed the report. "It crystallises the problems in one document," he said. However, he is more bullish about the future. "I think we have been quite commercial in our approach, but we have not maximised it yet," he said.

Matusiewicz says: "This report should not be dismissed out of hand. Prospective sponsors, for example, should heed it and consider the issues. Simple things should be addressed such as one-day county matches being restored to a day when people can actually attend them.

"It has to be accepted that attendances at Championship matches are never going to increase significantly, given that the matches are played when the majority of supporters are at work. But that is not where the money is anyway; it is in Test matches, one day internationals and domestic one-day competitions."

THE CASE FOR A TRANSFER MARKET IN CRICKET

Robert Matusiewicz, the author of a report on the financial state of cricket, believes that one of the many changes the sport will face in future years is the creation of a transfer market. "As the value of cricket sponsorship increases and TV revenues increase, the players will expect more, leading to the prospect of further pressures on financially stretched clubs," he states in his report.

"One of the by-products of a two-division championship [next year] will be a more aggressive outlook by counties keen to win the Championship or to avoid relegation. This will be strengthened by the inevitable desire of ambitious players to play in the top division.

"Over time it is probable that the standard of cricket in the top division will be of a higher quality. It is also probable that there will be a financial incentive to playing in the top division.

"As a consequence the ingredients for a cricket transfer market exist, namely the existence of players wishing to move, and clubs wanting to recruit better players to stay in the top division."

At present, the movement of players is strictly controlled under systems operated by the England and Wales Cricket Board, but Matusiewicz a lifelong cricket fan, is convinced that these could be challenged in the courts.

He also sees a potential clash between counties and the ECB if the board adopts the proposals of the Trangmar committee, which recommends that future England players should be contracted directly to the ECB and, in effect, lent back to their counties, who would also receive compensation - effectively a transfer fee - for the loss of the player.