T. Ransparent, Business Writer

TheICC Cricket World Cup West Indies 2007 Inc (CWC-WI), a special purpose company incorporated in the British Virgin Islands July 2003 as a wholly owned subsidiary of West Indies Cricket Board Inc (also a BVI company), was created to organise, promote and manage the World Cup tournament.

The company ceased operations in April 2007, at the conclusion of the competition.

Management was headed by Chris Dehring; the chairman was Ken Gordon.

During the year, US$126,000 was paid as fees to the directors of the company and US$194,000 as management remuneration.

In total, US$5.5 million was paid over as staff compensation.

SURPLUS OF US$63M

The audited accounts for year-end September 30, 2007 - which became available March 2008 - show revenue of US$112 million (rights income US$101 million), which produced a surplus of US$63 million (56 per cent). In 2006, the company made a loss of US$21 million.

All numbers are based on draft audited accounts for September 2007, which are shown in USD.

On the face of it, this is an extremely good performance for the company both in terms of profitability and accountability. The ICC and its auditors, KPMG, should be commended for producing audited accounts so quickly.

NET WORTH

The September 2007 accounts show a net worth of US$24 million.

The CWC-WI had, however, lent US$31 million to its parent company, an amount substantially in excess of its net worth. One hopes that WICB, has the liquid resources to allow payment of CWC-WI creditors.

Of the loaned funds, US$9m was due to the local organising committees or LOCs that were entitled to receive "revenue derived from ticket sales to the public".

It was not immediately clear whether the US$9m represents the total value of tickets sold or just the portion collected by CWC-WI.

RECOMMENDATIONS

If it were the total, then it is small compensation for the massive Caribbean-wide spend by governments and related entities on the Cricket World Cup.

1. The West Indies Cricket Board owes the Caribbean public a full financial assessment of the World Cup. Simply what was the total spend by all Caribbean entities, including governments and what was the total amount earned in the Caribbean.

The 2007 accounts show that US$1.3 million was paid for hosting rights. The accounts do not record what amounts were earned from sponsorships of the World Cup.

2. The WICB might also confirm that amounts owed for ticket sales have been fully paid to hosting entities, and supply a breakdown of payments by country.

3. The Government of Jamaica, specifically the ministry in charge of sports, should also do an evaluation of the CWC on Jamaica to determine the full cost of the endeavour - stadium, security, and everything else - and compare this with ticket sales to Jamaica, along with an estimate of the value of other benefits.

business@gleanerjm.com

Taken from the Financial Gleaner, Friday June 6, 2008.