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Surrey cricket finance chief readied for coronavirus threat

Surrey County Cricket Club finance director Andrew Lane reveals in an interview how a record-breaking season at the Kia Oval will cushion the impact of Covid-19

Like any senior sport executive, Andrew Lane was nervously waiting for a decision on the impact of the coronavirus on fixtures. Then it was confirmed by the English Cricket Board (ECB) last weekend that no cricket matches will be played in England until 28 May at the earliest.

For many leaders of major sporting institutions, and in cricket they don’t come much bigger at Surrey which owns the vast Kia Oval in south London, that would be a major blow.

But Surrey’s combination of an entrepreneurial approach and prudent financial management, as well as a record-breaking financial year in 2019, means the club is well-placed to navigate what will be a challenging season.

As one of the biggest and most high-profile cricket grounds in the world, the Oval last year played host to an Ashes test and T20 World Cup matches.

These blue riband events, and the wider interest in cricket, resulted in a record year with annual pre-tax profit at around £6m that more than doubled the previous year’s  profits and revenue of £40m, 30 percent better than the 2018 financial year.

But it’s not just the cricket that has drawn in consistently strong numbers to Surrey in recent years, it’s also a plethora of off the pitch activities, that in 2018 made up more than half of revenues of £31.7m.

Its getting the balance between sport and non-sport revenues right that is crucial to managing  substantial variance between seasons, says Lane. And if coronavirus kills off a significant part or all of this Summer’s cricket, the club’s efforts to continually diversify its revenue-generating model will have paid off.

Lane can claim credit for developing the Oval’s wider business interests- including the development of One Oval Square which will increase the ground’s capacity from 25,500 to 28,000 and improve further the conference and business facilities at the ground. “It is great when you’ve invested money into stands to be able to get that dual usage, it really makes things add up,” says Lane.

Given the ground’s central London location, the decision to build a 95 room hotel on the site of the Oval House theatre across the road from the ground, which Surrey has just exchanged terms on, will further diversify the club’s revenue mix when it is finished next year. “It will help our conference and events business here on site, with a 24 hour daily delegate rate,” says Lane.

For Lane, these developments mark his biggest achievements to date, after spending 13 years at the club, a period of steady revenue growth. But ultimately, they are about managing a three to four year cycle. “The hotel development diversifies us away from reliance on test match week- which is an absolute banker for us,” he says.

That’s even after Surrey shells out £1m a year to the ECB for hosting each test match at the Oval, a 20 year agreement that will be replaced by a percentage system in 2023 that Lane thinks will double the amount that will flow to the cricket board for each test match.

Musically speaking

Lane’s arrival at the Oval came via a lengthy stint in the music industry. He started at Virgin Group’s holding company featuring media, radio and publishing interests, before joining its internet service provider as a management accountant.

He describes the Virgin ethos as “always trying to look at things with a fresh and innovative way, which I think is something that has lasted me to this day.

After qualifying at Virgin, Lane headed to music industry giants Universal Music as a financial analyst in a role he likens to being the “finance PA to the FD”. He says: “I was the guy sat outside the FD’s door and any time he wanted analysis on something, I was at his beck and call to produce the stuff for him, which was great- because at a relatively junior level, you get a real insight into how the FD operated,” he reveals.

The same finance director moved to rivals Warner Music, hiring Lane after he’d had a stint at Universal-owned label Island Records- known for acts Bob Marley and U2. “At Warner we’d got different artists on the roster such as David Gray and Madonna, but it was a lot of the same faces around the table,” he says.

As the music industry entered the era of digitalisation, thinking the music industry “wasn’t one where you saw many 50 or 60 year olds”, Lane was taken on as head of finance at rugby club London Wasps- where he was already a season ticket holder.

But although Wasps were performing well on the pitch, Lane says the club’s finances were “shocking” because the Premiership club, which was owned by Chrysalis Records founder Chris Wright who also wned football club Queens Park Rangers (QPR), didn’t have its own stadium.

“He [Wright] put Wasps into administration, but then bought Wasps back off the administrator, because there was no non-match day revenue. It also mean that the matchday revenue that you did have, you were losing a cut to the stadium. The club was losing £1-2m a year,” says Lane.

After six years at Wasps, a time in which rugby received a huge amount of interest from England wining the World Cup in 2003 and introduction of the European Heineken Cup was being established, Lane decided to head off.  “I’d spent a lot of time doing things like cashflows and managing creditors, which is a good experience but isn’t a lot of fun,” he says.

But an intention to take a mini-career break and go off travelling was abruptly halted when Surrey contacted Lane about the role of finance director, a role he couldn’t say no to. “I’d been coming to the ground since 1985. My father brought me here as a schoolboy, just before going back to school one September, to watch David Gower lift the Ashes, and I was here in 2005 when Vaughan won the Ashes,” he beams.

Inside track

The reality of being a senior leader of a major sports institution is often far removed from the excitement of the pitch, says Lane. “When I look at my daily job in terms of how much I actually spend on sport, in any given week I might have an hour or two with Stewy [Surrey’s head of cricket Alec Stewart, one of England’s best ever batsmen] talking about players’ contracts, but the rest of my time is spent on things like catering margins, marketing of tickets, the plethora of activities that go on here,” he says.

In finance, Lane says he has made technical innovations since his arrival at Surrey, “putting things like purchase orders and invoice approvals online, to make that easy. We don’t have huge amounts of paper floating about around the organisation anymore,” he says.

“We’re making sure we have tight discipline on management accounts, and that my team culturally understands and gets how I think how a finance team should operate. People come to you for requests, such as getting a flat hired for a player, so they should be open, welcoming and helpful, as much as they can.

“If the finance department is seen as can do, it then means when you are asking other departments to do things, or to do them in a certain way, by a certain time, then they’re open to helping you in return. I think that’s just a good culture to foster in any business. Carrying a bit stick around the place, ultimately sets you back when you really do need to enforce things,” says Lane.

When it comes to addressing the challenges of coronavirus, much will depend on whether the Oval’s two international matches, a June test match against the West indies and a one day fixture against Ireland in September are played. A major moneymaking fixture, the T20 match against local rivals Middlesex at the end of May appears to be off, “a great shame because it is such a great tournament”, says Lane.

“As it’s a big match, both in playing terms but also financially, that’s when it starts to bite for us,” he adds. “We’re also having a look at our long range cash forecasts for what would happen to us, what’s it going to look like, if we didn’t have a season,” says Lane.

Lane’s career highlight is starting the £30m One Oval Square development, “which we’ve done with a mixture of our own cash, a minibond with the club’s members, and some bank lending,” he adds. He says being owned by its members provides real strength to the club. “There’s no sugar daddy shareholder as you get in many football or rugby clubs,” says Lane.

A general committee of 16 elected members, including an 18 year old woman, represent members and make sure the executives in the Surrey management board are running the club in the interests of the membership. “It’s very much like a village cricket club with an elected committee, but rather than a village green they’ve got a £40m international venue,” he says.

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