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Worcestershire CCC Chairman's Report 2019

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My first full season as Chairman has been an enjoyable one, with many highs and challenges. It has been a pleasure getting to know as much about our Club as possible, how it operates, the personalities, all staff/players and all other aspects that make WCCC quite so special and unique.

I am confident that we are in a very strong position to compete, grow and develop irrespective of whatever nature throws at us – which of late has been really quite considerable.

Cecil Duckworth in his first year as our President has, as we expected, been a calm voice of professionalism, experience and wise counsel. A particular thanks must also go to our Vice Chairman, Paul Pridgeon who has worked effectively and tirelessly chairing the Cricket Steering Group.

All Board members have contributed hugely for which I am very grateful. It is pleasing that new Board members have also added expertise in a very short period of time. David Baker deserves special thanks for his work on managing the tenders for much needed IT improvements at WCCC. As does Richard Law for his forensic approach to land and insurance matters.

Emma Hallam has already brought a wealth of credible, commercial experience to our Board, having been co-opted last year. The Board recommends that she be appointed as an Elected Director in accordance with rule 17.5.

Elaine Chandler, has previously held senior HR roles at Worcestershire County Council, and is currently head of HR at Universities and Colleges Admissions (UCAS). She has helped us in the short period that she has been co-opted on to the Board per rule 17.14.

We thank Meriel Harris for her long-standing commitment to our club as she stands down from the Board having reached her maximum term. Meriel joined our Board in October 2003, and I am really pleased that the Board unanimously recommended that she be appointed an Honorary Life Member.

I am pleased that the Board also unanimously approved the recommendation that Tim Curtis and Stephen Taylor become Honorary Life Vice-Presidents.

Finally, our Members overwhelmingly approved (by 95%) our new constitution in 2018, which was adopted by the FCA in 2019. This is a ‘living document’ which may need constant review as the modus operandi of the club changes.

A REVIEW OF 2019

1. Cricket ­— WCCC Performance

In the last two years we have completely reset our expectations. Our aim is to consistently reach finals and hopefully win them, as well as becoming a sustainable first division side. We have clearly not achieved all our goals in 2019.

With respect to white ball cricket, whilst we did not emulate the achievements of 2018 – when we won the T20 Vitality Blast and reached the semi-finals of the Royal London One-Day Cup – we came very close.

On the pitch some of our white ball performances have been exceptional; convincing homes wins against Durham in T20, our quarter-final away performance against Sussex Sharks and our win against Notts Outlaws in the semi-final at Edgbaston will all live long in my memory. We came agonisingly close to creating history by retaining the Vitality Blast trophy, however we were pipped by Essex, who were worthy winners. We also lost in the quarter finals of the Royal London One-Day Cup to the eventual winners Somerset.

We were pleased to see our players and staff getting deserved International recognition, with Pat Brown and Sarah Glenn achieving full call-ups to add to Moeen Ali’s sustained success with England. Ben Davies, our Head of Science and Medicine, travelled with England Lions to Australia. We were also pleased to see Ben Cox get called up as a replacement to this England Lions squad.

We take pride and will continue to focus on developing our own talent. More than half of our squad has been capped since 2017, and in 2019 we awarded new caps to Jack Haynes, Josh Dell and Adam Finch. In 2018 it was to Dillon Pennington, Ben Twohig, Alex Milton and Ollie Westbury. Pat Brown and Josh Tongue were capped in the previous year. We anticipate substantial increases in Academy spend in this coming year, emphasising our commitment to developing our own talent, wherever possible. We are no longer constrained and have ambitions to excel, meaning we will look to bring in players if and when necessary.

Our red ball performance disappointed us all – we had targeted promotion and we failed to achieve that. Our goal was - and still is - to become a sustainable first division red ball side. For us to achieve this, we’ve clearly more work to do.

On the face of it, it could be argued with some candour, we’ve had a large challenge for a long time. In 2015 we were relegated from Division One, in 2016 we did not get promoted. In 2017 due to a strong finish to the campaign we were promoted. Just as the table in 2018 when we got relegated didn’t lie, neither does the table in 2019 when we finished a disappointing 9th. In the last five years we have won only 23 out of 74 games

There are no excuses for 2019 performance but the path to achieving any goal is rarely linear and not immediate especially in sport. The Cricket Steering Group (“CSG”) led by Paul Pridgeon, have reflected and been very self-critical. There have been changes and the expectation and hope is of improvement in the coming year. The changes made are widespread and are being addressed and managed by Alex Gidman, Head Coach (in only his first season) and his support staff.

The appointment of a dedicated Second Team coach, Kadeer Ali, in October 2019 is an important development for us at WCCC. We have expanded the role of our Sports Psychologist, Camilla Henderson, and also hired additional strength and conditioning support. Elite sport has many challenges and we at WCCC are fully committed to the physical and mental well-being of all our staff.

Perhaps one of the key roles of the CSG is to retain and attract new talent. We’ve recently extended contracts for Joe Leach, Daryl Mitchell and Pat Brown. Whilst we are hopeful of more contract extensions shortly, we are comfortable with the contractual position for all our current players. We have also attracted talent: Hamish Rutherford, bringing continuity and consistency, returns for all formats for the whole season, Jake Libby joined us from Nottinghamshire, and Ashton Turner is with us for the Vitality Blast campaign.

2. Dealing with flooding/weather

2019 was not helped by the disruption caused by flooding. Whilst regrettably these issues are not unprecedented, the increased regularity, on the face of it, is of concern. Since the end of October 2019 our ground, at the time of writing, has been under water for 62 days. Since 1899 there has only been three occasions that we have flooded five times in a calendar year - in 2007, 2012 and 2019.

All three examples of five floods involved a summer flood, which is particularly costly and challenging. We moved to Kidderminster Cricket Club (“KCC”) at short notice and played two County Championship games against Sussex and Derbyshire last year. Both away teams were complimentary of how KCC coped and we at WCCC were also very appreciative. We recognise that there is scope to improve our offerings to members and supporters when we are forced to move, and the club has been working closely with KCC, especially in terms of seating, transportation and marquee access. KCC have been excellent partners and we are delighted to have extended and deepened our relationship with them for 2020 and 2021.

In early January 2020, the working assumption was that our first County Championship game against Sussex on 25th April 2020 would still go ahead at home. Sussex were not able to swap our fixture to their ground. Having endured two floods already in 2020, our first game will now be at KCC.

The financial implications of a summer flood are significant – we estimated the cost in the region of £250,000 for the move to KCC. We were grateful to the ECB for assisting us when required in 2019, as we are of offers of help from other counties. A flood in the off-season has a limited impact – we estimate this to be in the region of up to £60-70,000, principally in clean-up costs. New flood policy procedures implemented in November 2019 reduced our exposure. It is important to differentiate between floods that occur during the season and during the off-season.
The message we would like to convey is that even during the floods, we remain open for functions – the only impact we had this year from the unprecedented levels of flooding is when New Road was closed for a day.

Whilst we are adept at dealing with flooding, and one of the highlights was how quickly we recovered to get the ground ready for the Birmingham Bears Vitality Blast game, heavy rain regrettably impacted four of our home fixtures. We insure wherever possible, and that more than mitigated the costs of ticket reimbursement and lost catering income for those fixtures.

Due to the assistance from the ECB and our insurance policies, our results were not negatively impacted by flooding in 2019. That said we cannot continue to rely upon others to assist us. As I stated last year, “I am keen under my Chairmanship that we have sufficient flexibility and reserves to make sure we are never beholden to anyone.” We are close to being at that point, due to impressive debt reduction over the last three years, but not quite yet. Our focus in the next year is to mitigate the losses of flooding by making sure our cellars, retail, disability access and museum are all above the flood plain.

We need to do all we can to make sure we are a sustainable business and not impacted needlessly by poorly designed facilities below flood plains. To mitigate costs being wasted and to improve access and our facilities, we anticipate an extension to the Graeme Hick Pavilion, subject to planning. The Board is producing a comprehensive master plan for cricket across Worcestershire, as part of ongoing dialogue with the ECB and other partners.

The financial clouds of the past have now hopefully lifted via sharply increased ongoing funding from the ECB between 2020-24, as well as strategic investment pots for creating sustainable business models at First Class Counties. Recent discussions with the ECB indicate flood lights, at this stage, are not deemed a necessity.

We recognise that many individuals in the county have been particularly hard hit by the floods in February 2020 – with around 500 homes flooded – some for the first time. Businesses have also suffered. We note, and have seen first-hand the excellent work that the Environmental Agency, the County Council, the City Council and our emergency services perform during these difficult periods all to keep Worcestershire operational. We will clean up, repair, re-seed and go again. In 2020 we will invite families impacted by flooding to our ground for free, for either a red ball or white ball game to watch glorious cricket - hopefully with the sun shining.

3. Operational performance in 2019/Restructure

Both on a statutory and on an underlying basis, we viewed 2019 commercial performance as disappointing.

As I mentioned in my last AGM report we viewed performances in 2018 as “mixed with much still to focus on”. We had hoped that the additional investments made in all business areas – resulting in an overall commercial decline of £171k in 2018 - would have resulted in improved performance in 2019. We also said “operationally in 2019 budgets have been set for WCCC, which are predicated on improvements in every area”. Regrettably these improvements did not occur.

On a statutory basis we recorded a loss before taxation of £89k in 2019, which is £213k worse than the £124k profit recorded in 2018. On an underlying basis our performance was more adverse. Using our management accounts, to get to underlying performance we eliminate the impact of flooding, the positive effects of reaching the Vitality Blast Finals Day, our share of gate receipts from the Sussex quarter-final and also charging members for the Australia tourist match for the first time. This enables us to compare like-for-like performance. We estimate on an underlying basis that for 2019 the loss increases to £492k which is a very sharp £627k decline in profitability compared to 2018 results.

Sarah Gluyas, our Company Secretary and Finance Manager will go through statutory performance in more detail. Our management accounts indicate that of this £627k decline, ECB income on an underlying basis declined by £249k, cricket costs increased (albeit at a sharply lower rate than in previous years) by £139k, accounting depreciation rose by £66k with the net balance of £173k a direct result of a worse commercial contribution. This despite a very strong performance from Catering (up £113k) from principally good cost control.

There is much to be done to improve the commercial performance at WCCC – through events outside of cricket such as concerts, increasing utilisation of our facilities, car park income and sponsorship. We need to improve cost control and efficiencies. We also need to market and promote all forms of cricket played at Blackfinch New Road.

Any new commercial improvements, we feel, should not, wherever possible, be through charging members more. If anything, new commercial deals secured such as with drinks suppliers, will be passed on to our members in terms of cheaper services and offerings.

The downward commercial trends of 2019 prompted a decision to restructure; with a simplified structure with more focussed, specific roles and responsibilities.

Excluding players, there are 45 full-time employees at WCCC, in what appears to be a relatively straightforward sporting model.

The reporting structure is as follows:

• Sarah Gluyas was promoted to Company Secretary in January 2020, and reports directly into the Board. Sarah joined WCCC in July 2017 as Finance Manager, is a Chartered Accountant and fellow member of ACCA and AAT. She has many years of experience in a variety of sectors including industry, banking, construction and manufacturing.

• David Hoskins is directly responsible for all commercial activities and reports directly into the Board. David joined us in November 2019 as Commercial Manager having been at Luton Town Football Club for 11 years. During this period he trebled commercial income, implemented business efficiencies and increased utilisation of catering.

• The Cricket Steering Group, chaired by Paul Pridgeon continues to report directly into the Board. This group includes Alex Gidman, Alan Richardson, Kevin Sharp and Kadeer Ali. Collectively this group makes all the substantive cricket decisions at our club.

We will continuously review matters at WCCC. Our working assumption at this stage is that we will not hire a CEO.

4. The Cricketing Landscape/Expectations in 2020

The landscape in 2020 for cricket in general and WCCC is changing.

Inspiring Generations – Cricket Partnership Agreement
At WCCC working alongside the Cricket Board, we will be launching a co-ordinated strategy for Worcestershire between 2020-24, aiming to inspire generations to discover and share a passion for cricket. This all-encompassing strategy links Community and Leagues, Professional Cricket and our facilities here at Blackfinch New Road. Our collective aims are large; to extend reach to 100,000 by 2024 (from 40,000 at present), to grow our playing base to 20,000 (from 12,000 currently), to create England players, to excel in the professional game and to boost membership to 10,000 (from 3,153).

West Midlands Regional Women’s Cricket Joint Venture with Warwickshire CCC
In 2020 we will create a joint venture with Warwickshire CCC aimed at managing West Midlands Women’s and Girls’ Cricket. This is a partnership aimed at developing cricket alongside Herefordshire, Shropshire and Staffordshire. This is a priority for WCCC and the region in terms of reaching new audiences and inspiring more females to play and enjoy cricket.

The Hundred Commences
This year sees the start of The Hundred tournament with eight regions competing against each other. The Birmingham Phoenix team is jointly run by ourselves and Warwickshire CCC. From our own perspective we will host two women’s Hundred events at Blackfinch New Road. Much has been debated of this new competition which I would prefer not to repeat here. The key challenge for the game, or indeed any sport, is to remain attractive and relevant to existing and new audiences from other competing activities.

One of the key slides I have seen from the ECB is the expectation that all formats of cricket will grow in 2020. I hope that is the case but this needs to be supported by active marketing and promotion of all formats of the game. Seven of our players were selected for the Hundred competition which is a testament to the talent we have in the white ball format. This will create opportunities for those not selected - established players, international players, and some of our emerging talent - to demonstrate capabilities during the Royal London Cup. Your attendance at these matches and your support will hopefully add credence to those ECB slides indicating greater gates are likely for all formats. We will aim to be very competitive, led by Alan Richardson, in this tournament.

For the record and as an aside, I do not believe the Hundred is the determinant of financial success for Cricket as it is portrayed, it is merely a possible contributor. The often sighted laudable aim is to open the sport up to new audiences. The new TV rights deal secured for 2020-24 at vastly higher levels than the previous agreement (a credit to the ECB) shows that the Hundred accounts for a relatively small component of secured TV revenues (<14%) it="" is="" however="" pleasing="" that="" some="" cricket="" at="" least="" will="" be="" shown="" on="" terrestrial="" tv="" p="">

The justification often mentioned when discussing the impact of the new Hundred competition is the additional income of £1.3mn per year between 2020-24 which all first class counties like ours are guaranteed to receive. The economics of The Hundred over this period (at least) will not support these levels of payments – it is unlikely to generate enough to pay each county £1.3mn. Therefore cross-subsidisation is occurring through other income streams secured by the ECB (of which other TV rights accounts for 86% of revenues). My calculations indicate approximately 40% of these additional payments to counties are from other ECB income.

The largest and most important component of income for the ECB and therefore for ourselves is currently through red ball, test cricket. To the purist, hopefully this supports the need and our desire to preserve this format of the game as well as the ongoing need to invest in county cricket. As an aside we do not, for the record, support a shortening of five-day test matches and have made our position known to the ECB.

Our Expectations for 2020
We are as excited about the future as we have ever been, irrespective of the overall challenges cricket and we specifically face. We finally have, as we hoped, our balance sheet under control with debt falling dramatically from a peak of £5.6m in 2015 to £4.3m at the end of 2019. We continue to believe that we have the flexibility to halve debts in the next three years.

This provides us with significant flexibility to improve everything that we do and gives us commercial and strategic options. We have a capable squad of players with an enviable mix of international, emerging and established talent. We have an expectation to compete in all formats of cricket and we are hopeful of achieving the same in the years to come.

It will be a very interesting period ahead, thank you once again for your support.