Shocked Mike Ashley offers £16m bailout to save cash-strapped Yorkshire from debt

Former Newcastle United owner Mike Ashley is ready to provide the cash injection that the Yorkshire board of directors is after. Credit: Reuters/David Klein

Next week, Mike Ashley will present an exciting proposal to bail out Yorkshire County Cricket Club from its £16m debt, Telegraph Sport reports.

The former owner of Newcastle United has no plans to buy the cricket club, but has told friends he is willing to provide the cash injection that the Yorkshire board has been chasing for months.

Ashley will set out his official offer shortly and is now in direct competition with financial backers linked to the Indian Premier League's Delhi Capitals. Middlemen representing the Saudi Arabian Public Investment Fund are also ready to intervene if negotiations stall next week.

Given that any proposed investment requires the approval of the club's members, Ashley and the offer of a rival from India are likely to be acceptable for a club that is on the verge of collapse due to the Azim Rafik furore.

Yorkshire's most valuable asset is Headingley Stadium, which has been restored as a testing ground and is also planning to host rock concerts. It's possible that the land could be collateral in exchange for Ashley taking on the debt.

All the leading contenders have privately spoken of the prospects for significant growth in cricket. Ashley was heavily criticized by Newcastle fans for not spending money on players and infrastructure, but his role in Yorkshire was limited to first establishing himself in cricket. However, Yorkshire is likely to agree to give him some influence and a seat on the board.

Ashley would welcome the opportunity to guide Saudi Arabia in closing the deal. Relations between Ashley and the Saudi consortium that bought Newcastle for £300m in 2021 have escalated. The 58-year-old appears more likely to take over in Yorkshire, with sources close to the talks insisting there have been no direct conversations with him. Saudi Arabia.

Yorkshire officials, whose current financial model relies heavily on Headingley Test matches, had no intention of selling their stake in the club. Documents seen by Telegraph Sport show that the club's debt to former chairman Colin Graves has been refinanced. trust, as well as "working capital funds".

In total, the package is valued at £20 million.

Ashley will be well known to Stephen Vaughan, chief executive of Yorkshire, as they came into contact during the collapse of the Wasps rugby club. Last November, Ashley completed the purchase of the operating companies that run the Coventry Building Society arena. Vaughan's previous job was as CEO of Wasps, which was unable to refinance its £36m retail bonds as they became administration.

In December, Yorkshire appointed FRP Advisory, corporate refinancing and restructuring specialists, to raise £20 million in new investment. Coincidentally, the same firm acted as administrators at the time of the Wasps collapse.

Ashley and his rivals hope to close the deal as soon as possible, but the situation is complicated by the fact that Yorkshire is still in the process of appointing a new chairman, among potential candidates — Graves.

However, Yorkshire is in a hurry to restore financial stability. During the 16 months of Lord Kamlesh Patel's tenure, the club paid £3.5 million in legal fees and severance pay to 16 employers sacked when he took over the club.

It also includes a whopping £734,283 spent on whistleblowing hotline and club management reviews.

Six former Yorkshire players found guilty of racism against Azim Rafik have been fined a total of £22,000 Q & A: What does this mean for potential Yorkshire investors? Headingley is an iconic site and 4.3 acre piece of land. Photo: Getty Images/Stu Forster

Nick Holt and Tom Morgan

The incredible trio of Mike Ashley, Delhi Capitals and the Saudi Arabian Public Investment Fund are vying to agree a rescue package with Yorkshire worth up to £20m. With proposals due next week, Telegraph Sport explores key questions:

Why is Yorkshire so desperate for an investor?

The most urgent priority is to refinance the debt to the Colin Graves family trust, now believed to be up to £16m. The payments are being paid in installments, but the club has to pay around £14.5m next year to clear the debt. The hefty spending of another previous chairman, Lord Patel, after the Azim Rafik furor increased pressure to rebalance the balance sheets.

Patel left the club in March, losing £3.5 million in fees and legal fees after sacking 16 staff . An incredible amount of £734,283 was spent on hotline reporting and management reviews alone.

Amid financial chaos, efforts to attract an investor are now dragging on for six months. In December, the club appointed FRP Advisory, a specialist in corporate refinancing and restructuring, to raise new investment of £20m. FRP were appointed administrators of Wasps Rugby Club when it went bankrupt last year under the leadership of Stephen Vaughan, who is now Chief Executive of Yorkshire.

In documents seen by Telegraph Sport, FRP describes how the club is seeking debt refinancing as well as cash injections to service "medium" and "long-term" plans to revive one of the world's most historically successful cricket clubs.

What's in it for potential investors?

All three bidders have privately stated that cricket is an undervalued sport ripe for growth. It remains the most popular sport in India, which has grown rapidly in wealth over the past decades.

None of the investors appear to be intent on buying the club outright. Instead, perhaps the club's most attractive tangible asset, the stadium, can be insured against debt. Headingley is one of the most historic cricket grounds in the world and a 4.3 acre piece of prime land. The club owns ownership of the north end of the ground and shares the south stand with rugby league club Leeds Rhinos. The club value Headingley at around £29m, according to a document circulated to potential investors earlier this year.

In addition, whoever succeeds will earn a seat on the board and play a key role in future commercial solutions.

What is the growth potential?

There is a hotel on the ground, owned by the Rhinos, that can be rebuilt and expanded. There are also plans to hold concerts in the future, up to eight per year, which will bring new income from the cricket business. The club's brand can also be sold in the Indian market with the possibility of establishing partnerships in India with IPL franchises. The club receives £1.5m a year from a partnership agreement with the ECB and another £1.3m from the Hundred, as well as £85,000 for organizing each of the four North Hundred Spirits matches played at Headingley.

The situation is complicated by the fact that Graves is a potential candidate for a comeback as chairman of the club. Yorkshire is also in a better position to make a deal now than it was during the height of the Azim Rafik case. This saga brought the club to the brink with subsequent layoffs of the coaching staff and negative headlines around the world. But now potential investors see a big chance to bounce back. The club has produced more players from England than any other country and has won 33 league titles. The county boasts a large Asian population that has not been able to fully tap it for decades and has huge potential for club and sport development.