… End of Sony Media Rights Agreement also a factor

CRICKET West Indies (CWI) has said that the reduction in income from 2019 to 2020 reflected the effect of the global pandemic as well as the end of the Sony Media Rights Agreement which ran from 2012 to 2019 culminating with the England and India International Home Tours in 2019.

In its 36-page Annual Report, which was released last Thursday, CWI pointed out that it only hosted one International Home Tour in 2020 against Ireland before the pandemic was declared. “While WI teams toured England in the latter half of the financial year, all other scheduled tours and tournaments were either curtailed or cancelled.”

The report said that as of January 31, 2019, CWI had total indebtedness of US$30,287,434. Two years later, this has been reduced to $20,005,757 or a decrease of approximately 34 per cent. “This has all transpired despite the near crippling impact on business operations and treasury management of the COVID-19 pandemic over the ten months leading up to January 31, 2021.

“This was particularly challenging given that the majority of expenses are fixed or semi-fixed in nature. Management worked closely with the Financial Strategy Advisory Committee (FSAC) to put in place short-term equitable cut-backs (primarily compensation and stakeholder funding) and to seek efficiencies and more rigorous cost containment policies (implementation of the Procurement Function enhancements and protocols).”

CWI said that “coming out of 2018, the effective interest rates from Sagicor and Royal Bank were 7.66% and 4.83 per cent respectively. However, associated therewith were significant “processing/handling fees” of approximately $209,700 (Sagicor) and $7,500 (RBC) and the legal fees related to the aborted Bond transaction of $92,430.

“In 2020, management substantially consolidated all banking activities, moved away from virtually all cash payments (minimised the use of cheques) and negotiated a new loan facility with Republic Bank with an effective interest rate of 4.50 per cent and processing fees of $16,750. This resulted in a reduction in overall Debt Servicing Costs from $1,315,788 to $525,512 for the comparable 12 months leading up to January 31, 2021.

“Concurrently and consistent with the objective of doing everything possible to treat all obligations to all related parties in a transparent and equitable manner, an in-depth review was undertaken to (a) confirm all balances and (b) set in place a plan to get all related parties as current as practicable.

According to the report, “This objective process involved down payments some obligations that were several years past due. As at January 31, 2021 this outstanding balance is $5,841,299 (down from $7,527,283 as at January 31, 2020).

Following the PKF financial review, which was approved by the Board in December 2019, CWI said its management undertook a comprehensive restructuring of the Finance Department with a view to improve its systems and processes whilst integrating new technology which would allow for the generation of timely reports, improved record-keeping, better cross-functional support, and greater overall efficiency.

“A major part of the restructuring was the additional investment in our financial software namely Microsoft Dynamics which was upgraded to include new Purchasing/ Purchase Requisition and Inventory modules and comprehensive training of personnel from the CEO and management team members; so that all members of the organisation whose job function includes aspects of the purchasing and inventory management could utilise the new software.