Mike Ashley in shock £16m bail-out offer to rescue cash-strapped Yorkshire from debts
Mike Ashley will table a remarkable offer next week to rescue cash-strapped Yorkshire County Cricket Club from its £16 million debts, Telegraph Sport can disclose.
The former Newcastle United owner has no plans to buy the cricket club, but has told friends he is willing to provide the cash injection being pursued by the Yorkshire board for months.
Ashley will outline his formal proposal imminently and is now in direct competition with financial backers linked to Delhi Capitals, of the Indian Premier League. Intermediaries representing Saudi Arabia's Public Investment Fund are also ready to swoop if talks stall next week.
With any proposed investment needing member approval, Ashley and the rival offer from India appear more likely to be palatable to a club pushed to the brink of collapse by the Azeem Rafiq furore.
Yorkshire's most valuable asset is Headingley Stadium, which has been reinstated as a Test venue and is also planned to host rock concerts. It is possible the ground could effectively be security in return for Ashley taking on the debt.
The leading contenders have all spoken privately of the prospect for major growth in cricket. Ashley was criticised bitterly by Newcastle fans over his lack of spending on players and infrastructure, but his role at Yorkshire would be limited to him securing a first foothold in cricket. Yorkshire would be likely to agree to grant him some influence, however, with a seat on the board.
Ashley would relish the chance of seeing off Saudi Arabia in securing a deal. Relations became strained between Ashley and the Saudi consortium that bought Newcastle for £300 million in 2021. The 58-year-old appears more likely to get the upper hand at Yorkshire, with sources close to talks insisting no direct conversations have taken place with the Saudis.
Executives at Yorkshire, whose current financial model is heavily dependent on Test matches being played at Headingley, have not been looking to sell a stake of the club. Documents seen by Telegraph Sport show executives are pursuing refinancing on the club's debt to former chairman Colin Graves' trust as well as "working capital facilities".
In total, the package is thought to be worth £20million.
Ashley will be well-known to Stephen Vaughan, the Yorkshire chief executive, as they will have come into contact during the collapse of Wasps rugby club. In November last year, Ashley completed the purchase of the operating companies who run the Coventry Building Society Arena. Vaughan's previous job was as CEO at Wasps, which could not refinance their retail bond of £36 million as it spiralled into administration.
In December, Yorkshire appointed FRP Advisory, corporate refinancing and restructuring specialists, to attract £20 million of new investment. Coincidentally, the same firm had acted as administrators during the collapse of Wasps.
Ashley and his rivals hope to shake hands on a deal as soon as possible but the situation is complicated as Yorkshire remain in the process of appointing a new chair, with Graves among potential candidates.
Yorkshire are in a race against time to restore financial stability, however. Lord Kamlesh Patel's 16-month reign has seen the club pay out £3.5 million in legal fees and severance payments to 16 employers sacked when he took over the club.
It also includes a mammoth £734,283 spent on a whistleblowing hotline and governance reviews of the club.
Q &A: What's in it for potential Yorkshire investors?
By Nick Hoult and Tom Morgan
An unlikely trio of Mike Ashley, Delhi Capitals and Saudi Arabia's Public Investment Fund are in competition to agree a rescue package with Yorkshire worth up to £20 million. As offers are set to be tabled next week, Telegraph Sport explores the key issues:
Why is Yorkshire so desperate for an investor?
The most pressing priority is to refinance its debt to the Colin Graves family trust, which is now believed to be up to £16 million. Instalments are being paid but next year the club must settle around £14.5 million to pay off the outstanding amount. Massive spending by another previous chairman, Lord Patel, after the Azeem Rafiq furore has intensified pressure to rebalance the books.
Patel left the club in March having overseen losses of £3.5 million in payoffs and legal fees after the sacking of 16 members of staff. An eye-watering £734,283 was spent on whistleblowing hotline and governance reviews alone.
Against the financial chaos, efforts to attract an investor now stretch back six months. In December the club appointed FRP Advisory, a corporate refinancing and restructuring specialists, to attract £20 million of new investment. FRP were appointed as administrators of Wasps rugby union club when it went bust last year with Stephen Vaughan, now chief executive of Yorkshire, in charge.
In documents seen by Telegraph Sport, FRP outlines how the club is seeking debt refinancing as well as a cash injection to service "medium" and "long-term" plans to restore one of the most historically successful clubs in world cricket.
What's in it for the potential investors?
The three contenders have all said privately that cricket is an undervalued sport ripe for growth. It remains the biggest sport in India, which has rapidly grown in wealth in recent decades.
None of the investors appear to be intent on buying the club outright. Instead, it is possible the club's most appealing material asset — the stadium — could be secured against the debt. Headingley is one of the world’s most historic cricket grounds and a piece of prime land on a 4.3 acre site. The club owns the freehold to the northern end of the ground and shares the south stand with the Leeds Rhinos rugby league club. The club estimates the value of Headingley at around £29 million, according to a document circulated to potential investors earlier this year.
In addition, whoever is successful can be expected to be granted a place on the board and play a key role in future commercial decisions.
What is the growth potential?
There is a hotel on the ground, owned by the Rhinos, which could be redeveloped and expanded. There are also plans to host concerts in the future, up to eight per year, which would generate new income away from the cricket business. The club’s brand could also be sold to the Indian market with the potential to build partnerships in India with IPL franchises. The club receives £1.5 million per year from the county partnership agreement with the ECB and a further £1.3 million from the Hundred as well as £85,000 staging fee for each of the four Northern Spirit Hundred matches played at Headingley.
Why has it taken so long to raise the funds?
The situation is complicated as Graves is a potential candidate to return as club chairman. Yorkshire are also in a better place now to get a deal done than they were during the peak of the Azeem Rafiq affair. The saga pushed the club to the brink, with subsequent sackings of coaching staff and negative headlines across the world. But now potential investors see a major chance to bounce back. The club has produced more England players than any other county and won 33 championship titles. The county boasts a large Asian population that it has failed to engage fully for decades and provides massive potential for growing the club and the sport.