Sage comments from the south - Financial issues for Derbyshire

Thanks to David for alerting me to a message on the Forum from ‘Sussex Shark’, in response to my reference to that county’s parlous financial returns. I don’t post on there, Shark, for a variety of reasons but am more than happy to respond here, as well as printing your worthwhile comments in full.

Peakfan – I saw in your midweek musings you mentioned about Sussex recording a loss of £630K which raises a number of questions / concerns from me:

Loss of £630K compared with £325K in the previous year. How did we manage to make such a big loss in a year when we had the Aussies and also had good weather for the Twenty20? In 2014 we have the World Cup and if the last six weeks are anything to go by, the weather may not be as good this year. Then what? Could we see a seven figure loss?

Commercial and marketing departments have had a shocking year. Presumably if we are going to employ an external team to do the marketing the current marketing team will be made redundant. No point having two people doing the same job! Plumpton use an external marketing company.

Who are the sponsors who are defaulting on paying £87K? Farnrise?

Why have wages and salaries gone up nearly 10% at a time when most people are getting nothing or very little in the way of pay increases? Two extra players?

Talk of creating £1.5-£2m of off-season revenue is optimistic to say the least. If it was that easy how come no one has managed this at anytime up to now?

Jim May tried to justify the loss by saying there was only 40 days of cricket. However, I don’t accept this excuse as one look at Plumpton Racecourse accounts for last year shows they made a healthy profit from just 16 days of racing a year by keeping a close eye on its costs and maximising off-season revenue through events and sponsorship.

Sussex have been operating beyond its means for some time and without Spen Carma’s money and ECB handouts would have gone bust.

Horsham festival is now under threat unless the sponsors raise £15,000 in the next two weeks. Currently they have raised just £100. If this is not met, the Warwickshire and Nottinghamshire games will be moved back to Hove.

Your informed insight into that county’s finances are appreciated, but worrying for anyone who follows and cares about the county game. Any business losing the best part of a million pounds over two years would have to be concerned and it seems to me as if the county – like a few others – are conducting their financial affairs with the assumption that they will continually be bailed out by the ECB if things go wrong. It is not, by any means, a sustainable business model. 

Sussex are no different to Leicestershire, Kent, Surrey, Warwickshire or any number of other counties. They have to learn to cut their cloth to suit – and fast. How many people, if they earn £20K a year, go out and spend £30K?  Derbyshire as a county has led the way in prudent financial management and Northamptonshire’s success last summer came after they had undertaken a major cost-cutting exercise based on our own. 

I totally agree that talk of generating two million pounds in off-season revenue seems unrealistic, even on a southern weighting. Maybe if you held major concerts on your ground it would be feasible, but how many clubs do that, or would want to, in the winter months when the likely damage to the outfield would be considerable?

It does make it all the more surprising that the county has engaged a second overseas player in Yasir Arafat for the T20. As for the salary increases, it is a double-edged sword. Again, you should only pay what you can afford, as Derbyshire do and then hope that players buy in to the club’s ethos and ambition.

There are a good few examples of counties who are paying over the odds for players to retain their services, presumably on the rationale that if they don’t, someone else will. Sadly, such players and their agents are bleeding the game dry, as there’s simply not the money to go around.

I suppose that is the underlying rationale behind the ECB incentives. Such contracts can only self-perpetuate for those who are producing on a regular basis as they get older, thus improving the overall standard of the competition.

But by the same token, should only do so if they are affordable and are not taking the club to the brink of penury. I’ve said before that I’ll take slow and steady consolidation at Derbyshire over a five-year spending blitz that jeopardises our long-term future.

I’ve not changed my mind on that one.