Cricket West Indies (CWI) is facing a “massive hole” in its financial affairs, according to the findings of a report, with president Ricky Skerritt stating the body is working hard to uncover “identifiable missteps or shortcomings of the past”.
The financial issues have been detailed in a report from external and independent auditor PKF, which was commissioned by Skerritt’s administration when he replaced David Cameron as president back in April 2019.
PKF was engaged for a six-month period to conduct a business situation assessment and review of the organisation’s financial management systems, and to provide recommendations for addressing any shortcomings.
Additionally, another Task Force was established, led by Senator Don Wehby. The remit of that Task Force was to review the governance system and practices of CWI, and to make recommendations to address any needed reforms. The final Wehby governance reform report is expected to be released in the near future.
CWI said that in carrying out its assessments, PKF uncovered “some illustrations of questionable executive standards and practices”. It verified and emphasised the need for “drastic operational reorganisation and realignment”, with an urgent need for improved risk assessment and cash flow management.
PKF presented their report in person to the CWI board in December; and their 28 recommendations were unanimously adopted. CWI has stressed that publishing the document was never considered by the board as it is an internal report, but details of it have now been reported by the ESPNcricinfo website.
The report is said to criticise CWI’s previous administration for creating an unsuitable governance structure. Among the key points raised was the decision to promote the corporate secretary to the position of chief operating officer within the same accounting period as recruiting a new chief executive, Johnny Grave, to perform similar duties. The report estimates this cost over $300,000 (€274,000).
The report states: “To put into perspective since January 2017 the corporate secretary (the COO) earned US$19,000 per month or about US$646,000 for the last 34 months. Assuming that the fair market value for such service is US$10,000 a month (at extreme) CWI has paid an unnecessary premium of approximately of US$306,000 over that period for no apparent reason.”
The report also highlights a reduction in projected revenue CWI is expected to receive from the International Cricket Council (ICC) as a “massive hole” in board finances. In 2018, CWI was projected to receive $128m in payments over the next eight years from the ICC, but this has since been revised down to around $117.6m.
The PKF report goes on to highlight a $50,000 bonus due to Cameron for having “worked beyond the call of duty” in order to secure the initial projected $128m figure from the ICC. Cameron served as CWI president from March 2013 to March 2019, when he was defeated by Skerritt when seeking re-election. He has strongly denied any allegations of wrongdoing by his administration.
Cameron told ESPNcricinfo: “Every single payment, whether to me or otherwise, was approved by the Board of Directors and/ or the Sub Committees created specifically for the purpose of ensuring independence and transparency. This is especially the case with the honorarium paid to me, which was approved in accordance with Article 50.7 of CWI, which provides for such payments.
“The honorarium was based on the tremendous amount of work done by myself in the capacity of chairman/president in leading the organisation and the tremendous sacrifice and commitment over the years and not for any specific achievement. The item was suggested by a director and a special committee was constituted to review and advise.
“Most members of the current CWI board also served during my tenure including the current president and vice-president. All decisions made were endorsed by them. You must therefore ask the current president and vice-president to explain their participation and votes on these matters.
“The fact that CWI cannot now pay its players is as a result of the current board’s lack of, or poor planning and cannot be blamed on the former board. My six years at CWI as president, will be recorded as the most successful in the recent history of West Indies cricket outside the 1980-1995 era.”
Skerritt issued a statement on Sunday evening, maintaining that CWI had not attempted to “hide” the PKF report and is now considering whether to share it publicly. He added: “In closing, I want to assure all stakeholders of West Indies cricket that whether the PKF report is made public or not, CWI will not be distracted from correcting, and learning from, any identifiable missteps or shortcomings of the past.
“I am determined as the president of this board, to ensure that CWI conducts its business with integrity, accountability and transparency and without fear or favour, affection or ill-will.”
In other cricket news, English county club Lancashire has reported record financial results as it prepares for the challenges presented by Covid-19. Lancashire, which is based at Emirates Old Trafford stadium in Manchester, has claimed the best-ever Ebitda of £7.6m (€8.49m/$9.31m) for a first-class county in its annual financial report for the year ending December 31, 2019. Lancashire also reported record turnover of £34m and net profit of £5m, with all figures representing new benchmarks in the club’s history.
Lancashire has seen operating profit grow tenfold in the past five years from £763,000 in 2015, delivered on a turnover of £14m. The club was boosted by a 2019 cricketing summer dominated by the World Cup and the Ashes Test series against Australia, with Old Trafford hosting 12 days of top level cricket, including the second day of the World Cup semi-final after the first day was rain-affected, each in front of 23,500 capacity crowds.
Following the £60m decade-long redevelopment of Old Trafford, the club was able to maximise its revenue returns from these fixtures across the summer. Overall revenues across these internationals exceeded £17.5m.
For the first time since 2010, and years of stadium redevelopment, the club has returned to a positive reserves balance of £1.7m. The club has also reduced its net current liabilities position in the year from £8.7m down to £489,008, whilst also reducing its reliance on advanced cricket receipts by a further £4m.
Lancashire Cricket chief executive, Daniel Gidney, said: “To generate in excess of £30m of non-broadcast revenues is truly remarkable and, to put it in perspective, better than some Premier League (football) clubs. These results are a record for published accounts, excluding minority interests and legacies, for any first-class county and make this a proud day for the Red Rose.
“Clearly, these are now tough times as the club navigates its way through the current Covid-19 pandemic, but these results at least help relieve that financial burden. Our priority now is to work with our stakeholders to find a way for cricket to return as quickly as it is safe to do so. This will help us protect future revenues as much as possible and allow us to continue to invest in our infrastructure for the benefit of our members and supporters.”