Negotiations for the acquisition of the ground and income streams from Leeds Cricket Football & Athletic Company Ltd (LCF&A) commenced in November 2003. A confidentiality agreement was signed by both sides, the existence of which has prevented the Club hitherto from explaining in any detail the progress of the negotiations and the reasons for delays.
It has been the Club's objective to purchase from LCF&A the Headingley cricketing streams (advertising, food and drink) and hotel and freehold. Negotiations were conducted by Colin Graves for the Club and Paul Caddick for LCF&A. They were complicated and protracted, but in July last year outline agreement was reached and a heads of terms document was signed. Although it was clear to the Club at that time that the income streams to be purchased (which totalled approximately £1million annually) could not support the price, nevertheless, if it was LCF&A's asking price, then they resolved to exhaust every possibility of funding the purchase. In practice, this meant searching for interest free money from benefactors. The hope was that sufficient money would be available from such sources as to make the rest of the deal self funding.

Discussions took place with the Club's bankers and a due diligence exercise was undertaken on the Club's behalf by KPMG in order to check the validity of the income streams and the capacity to fund the deal. It was clear on conclusion of this exercise in June last year that there was still a substantial funding gap. The deal would have involved the Club taking the risk of £21million debt on its balance sheet. In July of last year the Board decided that it could not proceed with the deal on that basis.

LCF&A was informed fully of the position reached. It was then decided by both parties that, notwithstanding the inability of the Club to proceed, the possibility of forming an independently financed special purpose vehicle (SPV) to acquire the ground and the income streams should be explored. This solution would have involved the SPV running all the cricket businesses at Headingley, and would have left the Club as a members' Club responsible for County cricket only. In particular, the Club's international match business would have been transferred to the SPV. 

A new agreement for the staging of international matches with the ECB was signed at the end of September, and LCF&A was duly informed.

Throughout the second half of 2004, valiant efforts were made to garner interest in investment into the proposed SPV, and a structure of the agreed relationship between the SPV and the Club was agreed. An important feature of the agreement between the Club and the SPV was an option in the Club to buy out the SPV in stages in the future.

By early December an offer to fund the SPV had been received from a bank based on income projections which required the addition of a substantial rent payment by the Club in order to work. This difficulty was compounded by the announcement of the Sky TV deal in mid-December, referred to below. Throughout this period attempts to bridge the funding gap by attracting further investment from benefactors continued, but in the end they came up against the problem of LCF&A's asking price.

The Club's Board met on 22nd December 2004 to consider the position with a view to taking a final decision and thereafter reporting it to LCF&A. However, shortly before this meeting, it was announced by the ECB that the media contract for 2006 onwards was to be exclusively with Sky. Perimeter advertising, one of the income streams owned by LCF&A, suffers when Test Matches are televised only on satellite channels because the viewing audiences are lower. The Club's estimate, by reference to the 2004 experience (when the Headingley Test Match was televised on Sky), was that Headingley perimeter advertising would be reduced by approximately £200k per annum from 2006 onwards. This created a very significant additional difficulty, which was immediately reported to LCF&A. As a result it was agreed to meet on 12th January 2005 to discuss the position and to see if there was a way forward. From the Club's perspective, a reduction in the price or a phasing of the deal to a point at which it could be funded, albeit with the help of substantial benefactors' support, would have been the most welcome outcome.

The meeting on 12th January was attended by Paul Caddick, Peter Hirst, (LCF&A Finance Director) and by Robin Smith and Colin Graves. LCF&A expressed disappointment that the Club was seeking changes to the heads of terms and was anxious that the legal documentation should at least be finalised. The Club's priority was to find a way through to concluding a deal. LCF&A suggested that part of the purchase price which was represented by any diminution in the perimeter advertising revenue (less an increase in the hotel revenue) could be deferred. The Club suggested that the deal be done in two stages, namely the income streams first and the land second. LCF&A was not prepared to reduce the price. It having become apparent that no agreement was going to be reached that day, it was agreed that the Club would let LCF&A know by letter within one week what its final position was. In the meantime, neither side was to engage in any publicity.

The Club was disappointed that Mr Caddick chose to hold a press conference at 4.00pm last Thursday afternoon to announce that the negotiations had failed on YCCCs withdrawal. It came as a further surprise for the failure to be blamed on the Club and in particular on an alleged rift within the YCCC Board. There is not now, nor has there ever been, a rift within the YCCC Board. Relationships within the board are based on the soundest of foundations. Three board members are volunteers, working in the interests of Yorkshire County Cricket Club, and all board members have one objective in mind, namely the prosperity of Yorkshire cricket.


It should be added that Colin Graves' financial support and relationship with the Club's bankers have underpinned the Club's trading position since the current Board took over in August 2002.



Paul Caddick is the owner of a very successful business which is engaged in property development and construction. Naturally he looks at any deal with the Club from a commercial standpoint, about which the Club has no complaint. The Club, on the other hand, is a quasi-public institution, owned by its members and its objectives are to serve the interests of cricket in Yorkshire. Cricket in general in the UK, and in Yorkshire in particular, could not survive without the voluntary support of a wide range of people. The three members of the current Board who give their time and much else voluntarily, do no more than countless volunteers involved in cricket, from schools through the Clubs and leagues and up to the Yorkshire first team. In addition, the Club is able to count on the generous support of its sponsors.

A deal for the acquisition of Headingley, and the cricket income streams, could still be done if a suitable way forward could be found. If LCF&A were prepared to work with the Club to find a way forward which could be funded, with the support of a substantial benefactor's injection, then a successful outcome could possibly be achieved. The price might be less than the price which LCF&A's commercial standpoint has produced, but if a deal could be done, the benefits for Yorkshire cricket, and therefore for cricket more widely in the UK, would be beyond measure and enduring. It is the Club's wish that the negotiations be continued on that basis.

The Club confirms that it has not withdrawn from the negotiations, neither orally nor in writing. It has no choice at present but to regard the negotiations at an end, but it wishes to make clear that they have been ended by LCF&A unilaterally. The Club has a 999 year lease of Headingley and the Club will continue to run successfully under it. Every endeavour will be made to work co-operatively with the management and staff of LCF&A, who have great talent and for whom all at the Club have considerable respect.