Durham County Council have agreed a financial rescue package to secure cricket in the north east and avoid the club going into administration.
Avoiding the “significant risk” of administration means the Council had little option but to agree to an ECB recommendation that the £3.74m the council is owed is converted into redeemable preference shares as part of an “all creditors solution”. The council owns the land the club’s Riverside ground is built on, and leases it to them and would have struggled to recoup any of the money it is owed without today’s decision.
This should allow the council to recover its loan over time, with the expectation that Durham will be turned into a profitable enterprise. The Council will also receive a share of any “special fee payments” due to the club in the coming years. Durham will not receive these until their £1.8m debts to the ECB have been cleared.
In early October the ECB had agreed a £3.8m rescue package with penalties, including relegation from County Championship Division One and a 48-point deduction for next season.
The council had been told that “the club is effectively insolvent and not viable in its current state”. The council has loaned the cricket club £4.3m in two tranches, and been paid back around £680,000 in interest since 2009.
In September their accounts revealed debts to be £7.5m with the cost at servicing that debt estimated at £1million each year. at that time Durham became a community interest company, allowing it to distribute up to 35% of profits to shareholders.
In a statement Durham CCC said it: “Welcomes the support of the partnership of stakeholders, notably the ECB and Durham County Council, that has come together to invest in an important regional asset and secure the future of First Class and International cricket in Durham.
“The Club is pleased that this has been achieved without the need for significant public debt write off as has been the case elsewhere in cricket,” the statement continued.
“The Club’s difficult financial position was brought to a head earlier in the year by the unexpected calling in of a long term loan and the challenge of securing, in time, private development investment.
“Durham CCC now looks to the future and to cricket success in a sustainable business.”
SEE ALSO:
- Durham relegated and receive 2017 penalties after ECB agree financial support
- Rob Dixon: A Durham fan disappointed & disgruntled for his battling team
James Buttler
As the editor of Cricket Badger he is intent on building the website to give quality coverage of the domestic game around the world.
James was the full-time Media Manager at Yorkshire County Cricket Club between 2007 and 2010.
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