Exclusive: Yorkshire confident of heading back into the black

Yorkshire have arrested their slide towards financial meltdown and are predicting a profitable future.

The county cricket club recorded a deficit for the second successive year in 2011.

But after losing £2m in 2010, Yorkshire reveal in their published accounts today that they lost only a quarter of that sum last year.

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Yorkshire budgeted for a deficit of £1.08m in 2011 but the actual figure was £460,103.

They are still saddled with debts of £19m due mainly to the £21m construction of the Carnegie Pavilion, which was opened in 2010.

However, the return of Test cricket in each of the next eight years will prove central to turning around the club’s financial fortunes.

An annual return to profit is expected in 2012 when Headingley Carnegie hosts a Test match between England and South Africa (August 2-6) and a one-day international that will see Alistair Cook’s side entertain the West Indies (June 22).

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And, as part of the staging agreement the county have with the England and Wales Cricket Board (ECB), Yorkshire will host six days of international cricket every year until 2019.

The last time they staged so many days of England cricket – in 2009 – Yorkshire made a profit of nearly £700,000.

Their deficit in 2011 was due primarily to the fact that they did not host a Test match during that summer, which emphasises the role international cricket plays in sustaining the county game.

A reduction in general overhead costs, such as ground operations, commercial and administration factors also contributed to Yorkshire’s losses dropping significantly.

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The county’s financial peril was first laid bare in 2010 when they recorded a loss for the first time in five years.

The drastic downturn was caused by the decision to trade an England versus Bangladesh Test match for the staging of Pakistan’s neutral Test fixture against Australia, which turned out to be a gamble that cost the club £1m due to the lack of public support.

Last year’s revelations forced chairman Colin Graves to concede that Yorkshire would be pulling out of the race to host lucrative Ashes Test matches in the 2013 and 2015 series.

However, the release of these new figures suggests Yorkshire could be ready to re-enter the race ahead of the 2019 series.

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The annual loss of nearly half-a-million pounds in 2011 has seen Yorkshire’s overall debt rise from £18.5m in 2010 to £19.1m at year end, 2011.

The county’s primary creditors remain Leeds City Council, who are owed £7.76m for a loan to the club to aid construction of the Carnegie Pavilion.

The anticipated return to profit this year will see Yorkshire begin to make significant inroads into clearing their debts.

Charles Hartwell, Yorkshire’s finance director, said: “We are out of the woods and with a Test match and an ODI every year from now until 2019 we will continue to push forward.

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“Granted, the debt has risen, not in terms of loans per se, but due to our income and expenditure.

“But we have seen a significant reduction in the deficit.

“We knew the last two years would not be great financially and we knew in particular that 2011 would be tough.

“We expect to return to profitability in 2012 because we are hosting a Test match.

“That’s when we will make enough cash and profit to start servicing the debt. We haven’t reduced our capital debt in 2011 because we haven’t made any repayments.

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“But our deferred income has gone up because of how well Test match tickets and hospitality packages have been selling ahead of the visit of the West Indies and South Africa this summer.

“The Test match is selling exceptionally well and we will put our domestic package of Yorkshire tickets on sale in the next few weeks when we will reveal a new plan for the sale of Twenty20 tickets.

“The bottom line is the finances are better than we budgeted for and forecast. We encountered no unexpected nastiness in 2011.

“I’m expecting the club to record a profit over the next eight years unless something drastic happens, like nobody watching England play cricket any more, but that hasn’t happened for decades.”

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To further underline confidence that they are over the worst of their financial troubles, Yorkshire do not expect that relegation to Division Two will have an adverse affect on income.

Andrew Gale’s men may have under-achieved last year following their title challenge in 2010 but the club have shaken up their coaching staff with the appointment of former Australia fast bowler Jason Gillespie being the most eye-catching addition.

They have also recruited a new frontline batsman in Phil Jaques.

Hartwell said: “As far as we can say now, we do not think relegation will have too much of an impact.

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“The membership renewals last year were up significantly because, with the VAT rise, people bought early. So that has impacted on our early figures.

“We have yet to see what the final figure will be, but we do not foresee it being too much of a decline, if any at all.”

Headingley Finances

Income 2011

£5.43m (£5.58m)

Expenditure 2011

£6.16m (£5.91m)

Deficit inc interest, tax, etc 2011

£-460,103 (£1.86m)

Existing Debt

£19.1m (£18.5m)

(Numbers in brackets denote figures in 2010)