Relegation adds to Yorkshire woes as new regime plans changes

If Yorkshire are in need of consolation right now, they had better find a shovel and prepare for some hard digging. Relegated 12 months after clinching the Championship, they have no money and their rivals from over the Pennines can truly rub their noses in it having spent the last five months applauding David Byas – a batsman considered too unsophisticated for Headingley's liking a year ago.

In such dreary circumstances, the county's supporters will be wise to dwell on a telephone call their president, Robin Smith, received on an Algarve golf course three months ago. Its repercussions seem likely to include an overhaul of the way Headingley stages Test cricket; the shake- up of a merchandising operation which has veered between disaster and farce; and then – possibly within 12 months – the establishment of a plc-style financial structure for the club, supported by new equity capital.

Those possibilities loomed into view when Smith received the afternoon call from his chief executive, Chris Hassell, disclosing how auditors had uncovered £1m overspends on both the Western Terrace and new East Stand at Headingley.

To a former Dibb Lupton Alsop senior partner like Smith, it was a shock. But it enabled him to call members to Headingley for the EGM which, in return for a £10m advance by HSBC bank, would back the replacement of Yorkshire's powerful, anachronistic 140-year-old club committee with a four-man plc-type management team chaired by Smith.

It had taken last year's championship success to expose the weaknesses of the old elected committee, which had outlawed the co-option of professional hired hands in the 1980s. As Byas left by the back door, the West Yorkshire Police were coming in through the front after the disappearance of merchandise and cash totalling £100,000. Then Headingley was only half full for the start of the Indian Test and tickets sales cash was found to have been lost because customers were sent tickets without being charged.

No wonder the new four-man politbureau – which also includes Geoff Cope, the former England off-spinner, the accountant Brian Boutell and retailer Colin Graves, the new chief executive – has found so much to do in its first month.

First up was a meeting with Paul Caddick, who, as owner of the two Leeds rugby clubs and Headingley, gains the revenue streams from catering and advertising at the ground. The arrangement is arguably at the root of Yorkshire's problems.

With the kind of commercial nous the cricket committee has been lacking, Caddick was busy converting a retail shell, picked up for buttons from the Millennium Dome, into an attractive new Headingley shop for his rugby merchandise. The cricket shop was to be left behind in the Yorkshire cricket centre.

But talks with Caddick have immediately established a joint venture which will see cricket merchandise sold in the new shop and him pocketing some of the proceeds. It's not rocket science but the results are a revelation: Leicester rugby union fans evidently left Headingley festooned with cricket souvenirs two weeks ago.

Relations with Caddick have "changed 180 per cent", according to Smith – by which he means the cricket club are at least negotiating with him. Expect joint ticketing ventures with Caddick to flow from it.

There is a similar simplicity about the jettisoning of surplus merchandise with three for the price of one sales. For example, the club was left lumbered with hundreds of England v Sri Lanka shirts, after 300 out of 1,100 were sold.

Plans for a North Stand are on hold until the books are in better order for the £1.2m project. But there has already been scrutiny of the summer's poor initial Test match crowd. "I'd rather charge them half the price and fill the ground," said Smith.

Since the England and Wales Cricket Board fixes ticket prices, the key will be the kind of aggressive marketing which has seen Durham fill Chester-le-Street for minor one-day internationals and emerge as a threat to Headingley for northern Tests. "It's up to us to start competing [with Durham] and I'm quite happy with that," said Smith.

The Gang of Four plans to refinance the club and possibly convert it to a plc – a process which may begin in as little as 12 months, Smith said. "We have wealthy potential equity partners lined up to help take ownership of the ground and reflect cricket's presence at its soul."

Refinancing would permit the completion of the last section of the horseshoe of seats at the ground, at the expense of the unsightly, squat club offices. There is even talk of the construction of a landmark pavilion to rival Lord's, in place of the old media centre and "winter sheds" which stand on the north side of the ground.

Though Cope has dismissed talk of sacking nine players, the rumour mill is already churning about the future size of the Yorkshire squad, currently one of the county circuit's biggest and best paid, and job security cannot be at its highest when the new chief executive has arrived from a supermarket chain called Costcutters.

But six of the county's stock will take places on the England Under-19 tour and commercial professionalism may help engender an on-field esprit de corps which has been missing amid the financial catastrophes. Smith, who also wants to change the Yorkshire voting system and expand the board's membership to seven, has a favourite adage that "good people perform badly in dysfunctional systems". He thinks that goes for players, too.