Embattled CWI aggressively targeting reserves by 2023
BRIDGETOWN, Barbados, CMC – Cricket West Indies (CWI) says it plans to aggressively continue rolling back debt and streamlining its financial practices in an ambitious bid to realise profits by 2023 and place the organisation on sound commercial footing.
Speaking in the wake of an audited financial statement for last year which showed losses in excess of US$13 million and prompted auditors KPMG to “cast significant doubt on the company’s ability to continue as a going concern”, CWI chief executive Johnny Grave, said it was critical the board remained prudent in managing costs by adhering to initiatives already in place.
He said CWI had already managed to reduce borrowing and while the COVID-19 pandemic continued to present unprecedented financial challenges, it was hoped that within the next two-and-a-half years the organisation could be in a sustainable position.
“Making good choices about our investments and how much money we spend, having really good control over our costs [will be key to improving CWI’s finances],” Grave said.
“Hence the restructure of our finance department, embracing technology, implementing a procurement system. All of these things will give us greater control of our costs.
“We are also going to be auditing all of our international event budgets with our territorial boards to make sure we’re procuring not just directly but indirectly through our territorial boards and associations, where we’re procuring services at the best possible price.”
He continued: “We’re obviously looking to maximise revenue. That’s obviously difficult at the moment with matches being played behind closed doors and the enormous increase in costs we’re facing by hosting cricket in the pandemic.
“In the short term, while we’re going through these unprecedented times, it’s going to be challenging.
“You’ll notice how much we’ve reduced our borrowing. We no longer have near the debts that we had either institutional or member borrowing, so that’s all part of the strategy to reverse the finances and get them back on track.
“So that by the end of 2023, we don’t want to have deficits and we don’t want to have liabilities – we want to have financial reserves.”
With the Caribbean hosting just a single tour last year due to the COVID-19 pandemic, CWI saw revenues slashed by nearly a third from the previous year to US$23.5 million.
Also due to the pandemic, the already cash-strapped organisation was forced to slash employee and player salaries in half last year, while also reducing disbursements for cricket development regionally.
Since the start of the year, however, CWI has rolled out several major broadcast deals and is banking on the resumption of international cricket and tours by major Test nations like England and India, to boost its income.
With KPMG acknowledging that CWI’s revenue was “cyclical in nature and depends on the popularity
of the various reciprocal tours”, Grave said it was important the governing body’s finances were viewed in a four-year cycle in which important money-spinning tours took place.
“I keep articulating that we work in a four-year business cycle. Annual profit and loss isn’t particularly, in my opinion, a very good metric for Cricket West Indies,” he told Starcom Radio’s Mason and Guest cricket show.
“We make surpluses when England and India tour and then we use these surpluses to fund the years when they don’t tour. So therefore, looking at our finances in a 12-month snapshot, depending on when the financial year starts and ends depending on who tours, I don’t think is particularly meaningful for helpful.
“What we need to do and what we do now is analyse four-year cycles where we’ll have at least one England tour and at least one India tour and look at the period of that cycle, as to whether you’ve been able to meet your obligations from a cash flow perspective and at the end of that cycle, finish it with surpluses.”
England are scheduled to tour the Caribbean next January for five Twenty20 Internationals before returning in March for three Tests.