LONDON: Lancashire County Cricket Club is looking to build on a record-breaking financial year to grow its “India connect”. This is despite the the severe financial drag that is expected as a fallout from the coronavirus pandemic.
Lancashire Cricket Club Monday reported the best-ever Ebitda (£7.6 million) for a First-Class County in its annual financial report for the year ending 31 December 2019. The Red Rose also reported record turnover of £34.0 million and net profit of £5.0 million, with all figures representing new benchmarks in the club’s history.
At £7.6 million, Ebitda for the Red Rose has seen a tenfold increase since 2015.
The results were underpinned by international match revenues of £17.5 million and growth in the club’s conference and events business to £8.4 million.
“Investment in talent and the infrastructure crucial in delivering success, but tough times to come,” says Lancashire Cricket chief executive, Daniel Gidney.
The Emirates Old Trafford-based cricket club has seen operating profit grow tenfold in the past five years from £763,000 in 2015 (delivered on a turnover of £14.0 million), as Lancashire Cricket’s management successfully completed their strategy of continuing to diversify its business model, recruitment of best-in-class talent and targeted investment.
The 2019 cricketing summer was dominated by the ICC Cricket World Cup and the Specsavers Ashes Test series, with Emirates Old Trafford hosting twelve days of top level cricket, including the second day of the CWC19 semi-final after the first day was rain-affected, each in front of 23,500 capacity crowds.
Following the £60 million decade-long redevelopment of Emirates Old Trafford, the club was able to maximise its revenue returns from these high-profile fixtures across the summer. In particular, the world-class hospitality space, including the 150-bed on-site Hilton Garden Inn hotel, with 85 pitch facing rooms, providing high quality visitor experiences throughout the Cricket World Cup and Ashes Test. Overall revenues across these internationals exceeded £17.5 million.
Lancashire Cricket also saw a remarkable growth in last summer’s Vitality Blast attendances, increasing ticket sales by 34 per cent over the course of the campaign, compared to 2018. The club sold out the Roses Match against local rivals Yorkshire for the sixth year in a row and broke the record attendance for a non-Roses three times during the season. The club also achieved challenging budgets for sponsorship and combined hotel and conference and events sales. Lancashire Cricket continues to develop an enviable commercial partnership portfolio which includes global brands Emirates, Hilton and Heineken.
The returns from international cricket were supplemented by £8.4 million of revenue from conference and events activity at Emirates Old Trafford in line with its continued growth as a national venue of significance, with the Hilton Hotel, in only its second full year of trading, growing its average annual occupancy from 71 per cent to 78 per cent.
The club continued to invest in its facilities to help protect and grow commercial revenues and improve the fan experience for match attendees. From a cricketing perspective, the main areas of investment were two new electronic scoreboards and replay screen, combined with the LED ribbon running in front two major stands, a first in cricket in the UK.
During the year, the club successfully secured new long-term banking facilities with Metro Bank plc and in doing so consolidated all its existing debt, significantly extending the repayment profile and reducing the annual interest burden.
For the first time since 2010, and years of stadium re-development, the club has returned to a positive reserves balance of £1.7 million. The club has also reduced its net current liabilities position in the year from £8.7 million down to £489,008, whilst also reducing its reliance on advanced cricket receipts by a further £4 million.
Gidney commented: “2019 was a landmark year for the club when years of investment in talent and the infrastructure of Emirates Old Trafford was rewarded and truly reflected in our financial results. I’m delighted that all key business streams performed ahead of expectations.
“To generate in excess of £30 million of non-broadcast revenues is truly remarkable and, to put it in perspective, better than some Premier League clubs. These results are a record for published accounts, excluding minority interests and legacies, for any First-Class County and make this a proud day for the Red Rose.
“Clearly, these are now tough times as the club navigates its way through the current COVID-19 pandemic, but these results at least help relieve that financial burden. Our priority now is to work with our stakeholders to find a way for cricket to return as quickly as it is safe to do so. This will help us protect future revenues as much as possible and allow us to continue to invest in our infrastructure for the benefit of our Members and supporters.
“I would also like to personally thank all of Lancashire Cricket’s stakeholders for their continued and overwhelming support, not only in the last few months, which of course have been hugely challenging for everyone involved with the Club, but also over a number of years too.”
Finance director and club secretary, Lee Morgan, added: “The club, through its re-financing with Metro Bank, its record 2019 revenues and raised level of core underlying trading, has created the best platform possible to manage and survive the uncertainties created globally by COVID-19.
“The club has the venue in Emirates Old Trafford, talented people and recent track record of trading to demonstrate that, as well as being a much-loved local sporting institution, it is also a strong viable business with a platform that will enable us to return to our growth trajectory once we have navigated through the current crisis that is impacting our society, sport, leisure and events within that, so deeply.”
India the ‘next frontier’
But the most intriguing project for the club is to grow their brand in the world’s biggest cricket market, Reuters reports.
“We have a big growth plan for India,” Gidney, who noted the success of the India v Pakistan World Cup game at the venue last summer, told the newswire.
“We want to make Lancashire Cricket the second favourite team for all Indian fans. It is about raising our profile in India and obviously broadcast is a way to do that and we want to launch Lancashire TV and get as much Lancashire cricket content as we can broadcast in the sub-continent. That is very much part of our growth strategy,” he said.
Signing Indian players would be an obvious route to popularity and although the BCCI has restricted Indian players from playing in Twenty20 competitions abroad, players can still play in first-class cricket in England.
Lancashire held a training tour in Mumbai in February during which Gidney met with Indian business executives along with former India and Lancashire player Farokh Engineer, Reuters further reports.
The tour followed a number of initiatives aimed at welcoming Indian fans to future internationals in Manchester.
British fans of Indian heritage are also a part of Gidney’s strategy along with fans of the India team, who travelled in huge numbers for last year’s Pakistan match.
“To start with it is about encouraging people to travel more to watch India play in England, touch wood India are playing at Emirates Old Trafford in both 2021 and 2022. That is a platform.
“The passion for the game in India is enormous and unrivalled.”
