Warwickshire chairman Norman Gascoigne has outlined his full confidence that the club’s finances – and financial prospects – are sound despite the £20million debt incurred to build the new Pavilion End at Edgbaston.
The Bears opened their season at home to Somerset today in the shadow of the £32million structure which, after years as a ‘Master Plan’, finally came to fruition and opened in 2011.
The building is impressive. Opinions vary as to whether the redevelopment needed to be on quite such a grand (and expensive) scale but Birmingham City Council, whose £20million loan was essential to the project, would only get involved if the end-product was, as they put it, “iconic”.
Is it iconic? Not really. But impressive, yes, and, most importantly, full of function rooms and swanky facilities for players, officials and media which will, without question, help to ensure that Edgbaston retains its status as an international venue.
Never mind the double kick-in-the-teeth the ECB dished out to Warwickshire by not awarding them Test matches in 2013 and 2014; for the Bears’ security in medium and long terms, the crumbling old wreck of a pavilion, parts of which stretched back to Victorian times, had to go.
Finding repayments of £1m per year to the council for the foreseeable future in a recession will be a big ask, however.
Such a level of debt has destabilised many large sports clubs and toppled a few.
But Gascoigne, a former banker, while fully cognisant of the demands facing the Bears, is comfortable with their ability to meet them.
“We went into this plan knowing we would have the debt and nothing has changed,” he said.
“Nothing that has happened over the last two or three years that makes us question the business plan that we had in the first place and which a number of organisations, including the city council, said was fine.
“And nothing has happened to make me waver in my confidence that we can handle it.
“We know we have to service the debt and we have parts of the business – conference and banqueting particularly – which are helping drive a business plan which was put together with the financial climate in mind. The conference and banqueting side is already exceeding our plans.
This year will see 60 per cent growth over last year. In the last six months we have done what we did in the previous 12 – and that despite the state of the economy.
“In the city council we have an excellent partner. We have a fixed interest rate so, if interest rates start to shoot up, that’s not going to bother us.
“I think we will be able to manage the debt comfortably and won’t ever need a terribly sympathetic ear but if the need did arise I would hope that ear would be sympathetic. But I must stress I am confident we won’t need it.
“There is synergy between us and the council in terms of us both portraying Birmingham and the West Midlands in the strongest light possible.
“We are benefiting from dragging people from London and the other bigger cities into Birmingham and that is what we have got to capture not just this year but in future years.