Following West Indies Cricket Board & Cricket Australia - ECB and MCC in governance and financial meltdown
As the ECB Board this week approved £35.7million expedited core payments: we ask again – Was Cricket properly insured?
Why are these core payments being expedited and why are the ECB, MCC and most of the 18 First Class counties in such dire financial difficulties? – we ask the question again: Was Cricket properly insured?
The ECB Board has agreed to expedite core payments that were due to MCC, First-Class Counties (FCCs) and County Cricket Boards (CCBs) between August 2020 – January 2021 – click here for details
ECB Chief Executive Officer, Tom Harrison, says: “It is the ECB’s responsibility to protect the whole game’s future during the financial uncertainty we face as a sport.
“We continue to work closely with all levels of the game to understand the challenges that are being presented and to map out a plan for the future. While I am pleased the ECB Board has been able to approve this financial support package for the remainder of this year we are still only at the beginning of addressing the impact of this crisis on cricket”
Surely it was the ECB’s, MCC’s and all the FCCs responsibility to make sure that they were either individually, or collectively, adequately and properly Insured and 'fit for purpose'?
We asked the insurance industry for their views, and veteran Sports & Leisure broker Colin Mico commented as follows:
‘It is standard practice when you are Insuring large sporting events, to include all revenues including Sponsorship and TV rights.
When I was working for Alexander Forbes in the early 2000s I was involved with putting together the cover for FIFA for the 2002 Football World Cup in Japan / Korea – the Sum insured for which was over $ 12,000,000,000 just for the TV rights.
I was also involved with cancellation insurance for the Counties in the early days of T20 (before advance ticket sales), and insured the Test Match 5th day (Early Finish) exposure at the Oval, including getting the claim paid for the infamous Test against Pakistan which was abandoned due to ball tampering allegations.
I am not sure what the ECB receive in broadcasting revenues for Tests / ODIs / IT20s / Vitality Blast/ Royal London / Hundred from Sky/BBC etc, but if there is a penalty clause which states that money must be returned to broadcasters in the event of cancellation of the televised matches, then that loss of income should also have been insured against the risk of cancellation due to Communicable Diseases.
One of the issues appears to be that they have focused purely on the weather day ticket refund exposures and perhaps have lost sight of the other income streams that needed protecting, as their needs have changed.
I am not sure what advice has been given to the counties.
If they were insuring their exposures along with the ECB, you would have thought that they should also have been advised about insuring their exposures against the risk of cancellation of events due to Communicable Disease. The Vitality Blast & Royal London Cup have been big revenue generators in recent years. ”
So, as professional cricket scrambles to get back into action, they are seemingly doing so by using funds set aside for the upcoming financial year - What if there is no measurable difference in ‘covid-19 lockdown measures’ in 2021 and will fans still want to watch cricket? Will the Hundred deliver on its promise?
The MCC is facing a similar financial crisis with loss of revenues and, as I wrote in my previous article ‘it appears that the ECB, the 18 First Class Counties, the MCC and recreational cricket clubs ( through preferred ECB broker insurance cover) were not properly Insured for business interruption and, in the case of recreational cricket, there are only 350 clubs, throughout the UK, (around 5%) that have the chance of recovery of their business interruption claims via their Hiscox policies, where all others (including Allianz via MW, Aviva, Zurich, NIG, RSA) have said “No cover” from the start.
Without the Government intervention (including ‘furlough’ and ‘grant’ funding) Cricket, in the UK, would (and still could) be decimated in the ‘professional’ game, with the recreational game (although largely protected financially by government intervention) left struggling to create engagement for future generations.’
(In Leicestershire, 120 clubs have benefited to the tune of £528,126 – only £2,126 coming from the ECB – the rest from Government and Sport England)
The ECB and FCCs are seemingly using funds to secure some negation of TV rights exposure, which should have been insured against anyway; by try trying to play ‘bio secure’ professional cricket (at an enormous cost) starting with Test cricket on July 8th and some sort of County/Domestic cricket due to commence on August 1st
Dr Nigel Knott , a long time MCC Member and watchdog on MCC governance has stated that ‘this year's AGM arrangements are unlawful and in a word taken from the Club Rules "Repugnant". The MCC Committee intends to extend its powers of governance far beyond what is acceptable in any democracy.'
As a longstanding MCC Member myself, I would now question the validity of the 2020 AGM and the Resolutions, as presented to the Membership in their postal notifications, and subsequently, after the inept 'Virtual Q&A Webinar' fiasco last week , i would recommend to all Members to vote NO on all the Resolutions, support a SGM and support a move for proper governance at the Club, with complete transparency and corporate responsibility.
In my lifetime, I have not seen Cricket in such a ‘governance’ meltdown with Cricket Australia, West Indies Cricket Board, India (+IPL), USA, Sri Lanka, South Africa and MCC all with current or recent past issues.
Change is needed and change will come.
Please do contact me with any queries or comments - [email protected]
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