County Championship Salary Cap

This is post about salaries in county cricket.

The first class counties are subject to a cap and a collar on amounts paid in wages to cricketers.  They must pay above a collar, currently £0.75m, and below a cap, currently £2m. There is an agreement for both the collar and the cap to increase over the next funding round to 2024. In 2024 the collar will be £1.5m and the cap £2.5m

What is less clear is what payments count towards the cap and collar.  I assume employers' national insurance (a 13% tax on wages) isn't included.  Similarly I assume payments to coaching staff don't count towards the cap as if they did, Somerset, Lancashire and Yorkshire would all be over the current £2m cap. 

I've gone through the accounts of the first class counties to see what, if any, disclosure, they include on players' wages.  What gets disclosed varies enormously, quite a lot for some counties, nothing for others.  Additionally there is a possibility the information included in the table below isn't consistent between counties.  That is two counties might disclose a figure for "professional cricket expenditure" but that doesn't mean they are defining "professional cricket expenditure" the same way.  Where possible I've tried to pick comparable figures but it's far from an exact science.  

One important issue of consistency is what counties do with the salaries of centrally contracted players.  Although these players have county contracts, they are paid by the ECB and no wage cost is incurred by the county as long as the central contract continues.  This could be disclosed in one of two ways.  Firstly the salary under the county contract could be disclosed as salary with an equal and opposite amount shown as income.  Or the salary paid to a centrally contracted player might be left out of account.  It looks to me as if the latter approach is used, but I don't have anything conclusive on this.

With all those caveats, here is the information in table form, if a county isn't included there was nothing I could find on player salary costs.

		Playing staff#	Coaching staff#	Total Cricket Staff#	Salaries Players £	Salaries coaches£	Total cricket staff salaries£	Total Cricket Operations £
Durham				37
Essex		23	7	30				3,232,400
Glamorgan								2,161,874
Gloucestershire		25			1,633,000			2,473,000
Kent		20	6	26
Lancashire				32			2,829,442
Leicestershire (2017)					1,437,522	352,008	1,789,530	2,136,664
Northampton		19	8	27
Nottinghamshire (2017)				29				3,227,474
Somerset							2,332,010	2,974,817
Surrey (2017)		22
Sussex		23						3,055,000
Worcestershire							1,704,633	2,384,778
Yorkshire							2,585,810	3,385,581

I think it's possible to draw a few, tentative, conclusions from the data. 

Conclusion 1.  Player Numbers

Although the cricket wage costs of the counties vary quite a bit, playing numbers are more consistent and not particularly linked to salary costs. Accordingly, it's likely counties with high salary costs are paying higher individual salaries rather than the difference between them and lower paying counties being due to the number of players. Playing staff numbers are bunched between 19 and 25 and where disclosed counties have between 6 and 8 coaches.  Durham look like an outlier on 37 total cricket staff but that includes ground staff, strip those out and they would probably come back to a number of about 30.

Conclusion 2. The Salary Collar 

Leicestershire are shown with total player salary costs of £1.4m.  If we assume 13% of that represents employers national insurance that gives us wages paid to cricketers of £1.3m.  This is well above the £0.75m level of the existing collar but under the 2024 collar of £1.5m.  Worcestershire and Glamorgan have an overall cricket cost roughly comparable to Leicestershire so presumably have about the same wages bill.  Gloucestershire are slightly higher with salary costs (net of employers NI) of £1.45m but still well below the current £2m cap.

It is possible raising the cap to £1.5m might have an impact on the wage costs of the smaller counties.  But there is no indication that the current £0.75m collar has any impact, and the effects of the increase to £1.5m are likely to be small.  Inflation might have lifted salaries to the £1.5m figure by 2020 without the cap being increased and, if salaries do go higher than they otherwise would, the additional amounts will be small.  The counties, who will have the benefits of the ECB's additional funding of £1.3m (an inducement to accept the Hundred) should be able to pay for any increases.

Conclusion 3. The Salary Cap

Somerset, Lancashire and Yorkshire all show total cricket staff costs of £2m+.  However, these costs include coaching staff and 13% employers NI.  Working on a ball park assumption of 20% of total cricket wage costs being for coaches (based on numbers and Leicestershire disclosure) that gives us costs of £1.7m for Somerset and £1.8m for Yorkshire.  Lancashire's wages costs include travel and medical costs, which are disclosed separately for Somerset and Yorkshire.  Making a 10% assumption for these gives a (by now very approximate) figure for Lancashire players wages of £1.8m, roughly the same as Yorkshire.

Generally when a good county player who isn't on an ECB central contract switches counties they end up at either Surrey or Nottinghamshire, where they promptly become less good.  This is, perhaps, an indication that Surrey and Notts are paying more than Lancashire and Yorkshire and are at or close to the current £2m salary cap.  It would seem sensible for Surrey to be at the cap as they make decent profits, pay tax and are, presumably, on the look out for ways to spend their money.  If the cap is a constraint for some counties then we can expect their wage bills rise to the £2.5m cap figure for 2024.  Counties such as Lancashire and Yorkshire with a bit, but not much, cap room will have to decide whether to follow them.  

I hate to sound all reasonable but the increase in the cap seems quite proportionate to me.  It may increase wages for top end county cricketers, but I've always felt a bit uneasy about the possibility the salary cap might depress wages, which doesn't really seem fair.  But the increase is only 25% over 5 years which is modest compared to the increase in the ECB's revenues from its 2020 - 2024 TV deal.  But if 2020 - 2024 is a high point in the TV rights cycle, English cricket only has a small window to invest in its long term future.  Paying all that money away to county cricketers would be hard to justify.  

 

Perhaps the losers from this will be counties such as Somerset and Essex.  Successful non - test counties such as these have the least to gain from The Hundred.  For small counties, who only have total current revenue (ECB funding included) of £5m or so, the £1.3m guaranteed payment for The Hundred is likely to outweigh any income lost from the downgrading of the three other county competitions.  For the 8 counties staging The Hundred, as well as the £1.3m there will, presumably, be hosting fees (although how they work is another grey area.)  But Somerset and Essex have done a good job in attracting members and making 20/20 work for them.  Accordingly, the income they lose from the downgrading of county cricket will eat into, and perhaps eliminate, the £1.3m inducement payment without any compensating hosting income.  If their salary costs rise towards the £2.5m cap they will be in a difficult financial position, but spending less is likely to reduce on field success.

Conclusion 4. Total Cricket Costs

The table shows total cricketing costs.  As ever the definition may not be consistent across counties but I have tried to get a cost for "professional cricket" plus running an academy, youth teams and so on.  I've excluded ground costs as they vary so much between international hosting grounds and others.

As can be seen the smaller counties incur cricket costs of £2m plus, which rises to over £3m for the larger sides.  This compares to current ECB funding of £2.0 to £2.5m.  This takes me back to an earlier blog post.  ECB funding is often referred to as a hand out.  Well it's certainly important, vital indeed, for the financial health of the counties but I'm not sure its best characterised as a hand out.  All test playing nations need to run  domestic first class and 50 over competitions.  The ECB would have to fund something even if the counties could be wished away, and what it currently spends per county doesn't cover the cricketing costs of most of them, especially if you factor in some ground costs.

What makes up the difference is the additional revenue streams developed by the first class counties.  Staging international games is one such stream (it's another area where the ECB is very hands off).  But those counties that don't stage internationals raise funding from: members ticket sales, the near ubiquitous conference businesses and more individual ventures, from Gloucestershire's gym to Sussex's pub.  And it was the counties that introduced 20 / 20 cricket to the professional game.  Sadly (well sadly in my opinion) county cricket as I know and love it, is on its last legs. But cricket owes a lot to the slightly weird entrepreneurialism of the English first class counties.