ECB 2019 - 2020 Financial Statements

This is a post on the ECB's financial statements for the year to 31 January 2020.  Previous posts on the ECB's accounts are 

2017  

2018

2019 

The Mystery of the World Cup Payments 

The 2020 accounts show a profit for the period of £6.9m.  This is disappointing, for a year that included an England World cup and an ashes series.  You'd expect a substantial surplus to fund other, less profitable, years.  But the strategic report for 2020 provides a (partial) explanation for the lack luster performance.

"The group's administrative expenditure at £164m was an increase of £22m as compared to the prior year at £142m, the increase was largely due to the £1m paid to each of the Counties in respect of CWC 19."

That's a pretty good reason isn't it?  The ECB has distributed a share of its revenues from the cricket world cup to the first class counties, explaining the low profit for the period.  It's such a good reason the ECB have used it twice.  The 2018  strategic report included the following "

A further special fee distribution of £1m is scheduled to be paid to each First Class County in 2018 or 2019, relating to Cricket World Cup 2019.  These previously unprecedented contributions, coupled with continued significant investment in strategic and Participation and Growth initiatives, including the expansion of our first nationwide entry - level programme resulted in a loss for the year of £30.2m." 

So .... the payment of  £1m to each county in respect of the 2019 World Cup, caused a loss in the year to 31 January 2018 and was also responsible for the high level of administrative expenses in the year to 31 January 2020.  There's either been two separate payments of £1m to each county for CWC 2019 (which doesn't seem to be the case)  or the ECB's accounts aren't accurate. 

The Wider Picture

With no spectators and increased costs, the coronavirus pandemic has already had a severe impact on English cricket's finances.  Colin Graves, the departing ECB chairman, has suggested 18 county first class cricket might not be sustainable in the new normal. 

It's difficult to get a handle on how the ECB is spending its money. In the period to 31 January 2020 there was total expenditure of £222m, but there is no proper analysis of how this amount was spent.  Distributions to the counties certainly make up a good chunk of the ECB's expenditure but has it paid as much as is implied in the strategic reports for 2018 and 2020? The ECB also spends a lot of money on the ECB.  This post estimates upwards of £40m is spent on administration each year, so if cuts have to be made, can't they be aimed at the administration spend rather than payments of £4/5m a year to each first class county? 

Directors' Pay

In the year to 31 January 2020 the salary paid to Tom Harrison, the ECB's chief executive, declined from £719k to £580k, a welcome reduction of 20%. However, overall director's pay remained broadly flat at just under £1m.  2020 marked the first period where non  - executive directors were paid and these amounts pretty much made up for the reduction in Harrison's salary.  There were 10 non  - executive directors as at 31 January 2020 and the incoming ECB chairman, Ian Watmore, will be paid £150,000 a year for what was previously an unpaid role. 

The mysterious "Long term incentive plan", paying £2m to an anonymous group of employees in 2022 for, well nothing very much, remains in place.

Conclusion   

The ECB gets a lot of stick for its running of cricket in the UK.  Perhaps a bit too much stick.  There are positive aspects to its work.  The accounts to 2020 show a significant contribution to grass roots cricket, a £15m donation to the ECB's in house charity, The England & Wales Cricket Trust, plus £3m to Chance to Shine and a combined £7m to, the county, Scottish and Irish cricket boards and Professional Cricketers' Association.

The ECB runs the various English national sides and, in my opinion, does a reasonably good job of this.  The ECB negotiated a lucrative media rights deal   for 2020  - 2024.  Just as importantly its ability to stage international matches in a pandemic have enabled cricket to avoid the doomsday scenario of a loss of £150m set out in note 1.2 to the accounts.

But but but.  Even the ECB  accepts it has not been successful in its aim to make cricket accessible and engaging.  In 2017 the Lawn Tennis Association announced a £250m spend to expand and improve facilities.  In part because of the spend I have excellent indoor and outdoor tennis courts within 15 minutes walk of my north London home.  Football pitches and netball courts are just as close.  But the nearest cricket pitch to me is 3 miles away.  Cricket can't hope to thrive whilst tennis and football are so much more accessible.  

To make up the gap with other sports Cricket has to make the best use of its resources.  The first step to achieving this is to properly account for the money it is spending, but the ECB is failing to do this.