There is a high risk that Warwickshire County Cricket Club will fail to hit the income targets it has set itself following a £32million makeover of the Edgbaston ground, according to a confidential auditors’ report.
A study by consultants Deloitte warns that WCCC is over-optimistic in assuming Edgbaston will attract a cash-generating Test match and two one-day international matches each year between 2012 and 2016.
Deloitte also questions the club’s prediction that it can generate £2.7million a year from non-match day events including conferences and hospitality.
But it is the possible failure to attract sell-out England matches against the likes of Australia and India which is most worrying, according to the auditors.
The loss of one five-day test match would cost the club up to £5.7million, while the loss of a one-day international could cost £1million.
Such an outcome would virtually eliminate a £21.7million cash surplus that the club says it expects to build up over the next 15 years.
The report was drawn up for Birmingham City Council’s cabinet, which has agreed to lend WCCC £20million toward the cost of ground improvements.
Members considered Deloitte’s findings behind closed doors over a week ago before approving the loan.
They decided to take a charge out on the Edgbaston ground to protect the council in the event of the club being unable to repay the loan.
Club officials insist the refurbishment – including floodlighting, new stands, hospitality suites and media centre – is essential if Edgbaston is to see off competition from rival Test match venues. Ground capacity will increase by 5,000 to 25,000.
An “enabling development” on club land consisting of houses, flats, hotels and leisure facilities, will help pay for the ground improvements.
WCCC chief executive Colin Povey said he did not accept there was a high risk of the club failing to secure sufficient Test matches.
Mr Povey insisted the Deloitte report demonstrated the importance of going ahead with the ground improvements.
He added: “Our targets are achievable. There are more international games becoming available.”
Deloitte’s report discloses that the club is only investing just over £1million of its own money into the project.
Most of the £32million will be met by the £20million council loan and £9.75million from regional development agency Advantage West Midlands.
The Deloitte report warns: “There is a key risk that WCCC may not be awarded as many major matches as it is forecasting.”
However, the auditors concede that the risk of Birmingham losing Test cricket increases considerably if the redevelopment does not take place. City councillor James Hutchings said he was “very disturbed” by Deloitte’s findings.
Coun Hutchings (Con Edgbaston) added: “If it is such a wonderful scheme commercially, the commercial sector could have found the money before the credit crunch set in.”
The club is still waiting on planning permission for the scheme.