" CARDIFF CITY TO RECEIVE OVER £9.5MILL "

Well thats it,no more moaning we've got the cash

This isn`t extra cash compared to previous seasons.It is not a "bonus pot" available to spend.
£10m is less than the club has received for the last couple of seasons but the higher amounts were not enough to prevent the club making a big trading loss. Because of the high costs of running the club , mainly being far too high a wages bill, all the parachute payments have done is reduce losses.

I expect the May 2016 accounts which will be published before the end of this month to show a loss for the year , despite the parachute payment being higher than £10m.

By the end of this season there should be the opportunity to have greatly reduced the wage bill as a result of several players` contracts coming to an end/them being released or sold. This should allow some leeway in the Summer to enable Neil Warnock to bring in a few new players that he is targeting. But the club should /will still need to be cautious ahead of a season that will be the last in which it receives any parachute payments.

Could you remind us please what the losses were for the previous two years ( May 2014 and May 2015) and therefore how much of a loss we could make up to May 2016 without being in breach of the rules?

Assuming we go right up to the limit of allowable losses we can then calculate how much we could lose next season without being in breach of the rules.

This club has massive debts, and as has been said above, our parachute payments are just reducing our actual trading losses. Taking into account that Tan wants us to become self sufficient, the debts already outstanding, and our weekly operational losses, I am not sure that Tan will be looking to lose all he is allowed lose without breaching FFP rules. I believe he is looking to reduce debts, not add to them. I know some people say the only way he will get his money back is to get into the PL, but did'nt we end up with something like a £12m loss from our brief stint in that league. I am sure someone will tell me if this figure is incorrect, this is just from memory which is not what it used to be.

Not far wrong the loss was £13.6m on a turnover of £83m! I have always thought the same as you promotion to the PL doesn't solve a clubs debt problems as player wages and transfer fees simply swallow up the increased revenues.

Even Swansea who have been a PL team for 5 years and have been very shrewd in the transfer market making £millions on player trading are forever walking a tight line on finances. Relegation for them would be devastating financially and it would take years for them to recover, if at all.

Tony, as the money and wages increase, fewer teams appear to be bouncing straight back up after relegation and some (Leeds in recent times and Villa this year are good examples) so there is something in what you write above

I think Swansea would need to worry big time if they were to get relegated, as FFP Rules would hit them a lot harder than it has even us!

how will a premier league 2 solve anything?

They were on about splitting the money more for 2 x 18 teams league each club to get a larger share

Well thats it,no more moaning we've got the cash

This isn`t extra cash compared to previous seasons.It is not a "bonus pot" available to spend.
£10m is less than the club has received for the last couple of seasons but the higher amounts were not enough to prevent the club making a big trading loss. Because of the high costs of running the club , mainly being far too high a wages bill, all the parachute payments have done is reduce losses.

I expect the May 2016 accounts which will be published before the end of this month to show a loss for the year , despite the parachute payment being higher than £10m.

By the end of this season there should be the opportunity to have greatly reduced the wage bill as a result of several players` contracts coming to an end/them being released or sold. This should allow some leeway in the Summer to enable Neil Warnock to bring in a few new players that he is targeting. But the club should /will still need to be cautious ahead of a season that will be the last in which it receives any parachute payments.

Could you remind us please what the losses were for the previous two years ( May 2014 and May 2015) and therefore how much of a loss we could make up to May 2016 without being in breach of the rules?

Assuming we go right up to the limit of allowable losses we can then calculate how much we could lose next season without being in breach of the rules.

It is not quite as simple as just adding up the net losses shown in the accounts, because the allowable loss if after making adjustments for items such as stadium depreciation, youth development costs etc. Also in the year to 31 May 2015 the club had a profit improving figure of £13m disallowed for FFP purposes even though it had to be made for Accounting compliance purposes.

For the record, net losses in 2013/14 were £12m and there was a net profit of £4m in 2014/15

I understand why it would be risky spending 10 million on a promotion push. I can see that it might effect the fair play rules and we might fail. However, I think Tan should have a punt. Then again I am shit at gambling so what would I know.

It still amazes me how much money is in this game. I can't believe, for example, how much Declan John is on annually. You can be a below average footballer (not just Declan, I'm talking all reserve players at this level) and become a millionaire pretty quickly. Bonkers.

Well thats it,no more moaning we've got the cash

This isn`t extra cash compared to previous seasons.It is not a "bonus pot" available to spend.
£10m is less than the club has received for the last couple of seasons but the higher amounts were not enough to prevent the club making a big trading loss. Because of the high costs of running the club , mainly being far too high a wages bill, all the parachute payments have done is reduce losses.

I expect the May 2016 accounts which will be published before the end of this month to show a loss for the year , despite the parachute payment being higher than £10m.

By the end of this season there should be the opportunity to have greatly reduced the wage bill as a result of several players` contracts coming to an end/them being released or sold. This should allow some leeway in the Summer to enable Neil Warnock to bring in a few new players that he is targeting. But the club should /will still need to be cautious ahead of a season that will be the last in which it receives any parachute payments.

Could you remind us please what the losses were for the previous two years ( May 2014 and May 2015) and therefore how much of a loss we could make up to May 2016 without being in breach of the rules?

Assuming we go right up to the limit of allowable losses we can then calculate how much we could lose next season without being in breach of the rules.

It is not quite as simple as just adding up the net losses shown in the accounts, because the allowable loss if after making adjustments for items such as stadium depreciation, youth development costs etc. Also in the year to 31 May 2015 the club had a profit improving figure of £13m disallowed for FFP purposes even though it had to be made for Accounting compliance purposes.

For the record, net losses in 2013/14 were £12m and there was a net profit of £4m in 2014/15

Hi Keith

The May 2015 figures have always baffled me. I understand the way the profit of £4m was reached (wasn't it £5m of allowed losses/funding and £8m of debt conversion) which wiped out the operating loss and produced an accounting profit, but why was that not allowed by FFP rules which state that a club can convert £8m of debt and be funded by £5m of cash from a rich owner?

Also I take your point about the stadium deprecation and youth development but for a rule of thumb couldn't we accept the 2014 and 2015 figures as a rough guide? If we do then is our net loss for the past 2 years is £8m and for FFP it would be that added to this years loss and any possible wriggle room (in theory) would be that sum taken away from £39m?

Well thats it,no more moaning we've got the cash

This isn`t extra cash compared to previous seasons.It is not a "bonus pot" available to spend.
£10m is less than the club has received for the last couple of seasons but the higher amounts were not enough to prevent the club making a big trading loss. Because of the high costs of running the club , mainly being far too high a wages bill, all the parachute payments have done is reduce losses.

I expect the May 2016 accounts which will be published before the end of this month to show a loss for the year , despite the parachute payment being higher than £10m.

By the end of this season there should be the opportunity to have greatly reduced the wage bill as a result of several players` contracts coming to an end/them being released or sold. This should allow some leeway in the Summer to enable Neil Warnock to bring in a few new players that he is targeting. But the club should /will still need to be cautious ahead of a season that will be the last in which it receives any parachute payments.

Could you remind us please what the losses were for the previous two years ( May 2014 and May 2015) and therefore how much of a loss we could make up to May 2016 without being in breach of the rules?

Assuming we go right up to the limit of allowable losses we can then calculate how much we could lose next season without being in breach of the rules.

It is not quite as simple as just adding up the net losses shown in the accounts, because the allowable loss if after making adjustments for items such as stadium depreciation, youth development costs etc. Also in the year to 31 May 2015 the club had a profit improving figure of £13m disallowed for FFP purposes even though it had to be made for Accounting compliance purposes.

For the record, net losses in 2013/14 were £12m and there was a net profit of £4m in 2014/15

Hi Keith

The May 2015 figures have always baffled me. I understand the way the profit of £4m was reached (wasn't it £5m of allowed losses/funding and £8m of debt conversion) which wiped out the operating loss and produced an accounting profit, but why was that not allowed by FFP rules which state that a club can convert £8m of debt and be funded by £5m of cash from a rich owner?

Also I take your point about the stadium deprecation and youth development but for a rule of thumb couldn't we accept the 2014 and 2015 figures as a rough guide? If we do then is our net loss for the past 2 years is £8m and for FFP it would be that added to this years loss and any possible wriggle room (in theory) would be that sum taken away from £39m?

Tony

A large factor in showing a £4m profit for 2014/15 was an accounting credit of £13m without which the accounts would have shown a loss of £9m. This credit had to be made to comply with a new UK accounting standard, but wasn't accepted for FFP purposes by the League. I said at the time that I considered this unfair on the club.To comply with the same accounting standard this year is likely to show a small cost rather than a big benefit 2014/15 moved the figure from zero to £13m as it was the first year it applied. 2016 is likely to show very little movement in the figure , so no benefit in the profit and loss account.


The 2014/15 figures also included some big benefits that I don't expect to see repeated in the 2015/16 ones. For example, we won't have made as much as £9m on player sale profits, And will Vincent Tans debt write off be as high as the £13m in that year?

Added to the above, the club,s income must have fallen as attendances dropped.

The above is not meant to be pessimistic, just realistic as to why there are still issues with FFP to deal with.

P.S the stadium depreciation and impairment charge was £1.6m in 2015 and £6.9m in 2014 ( the "red elephant" of the stand extension had almost half it's value written off that year.

Hope this helps

Keith

Well thats it,no more moaning we've got the cash

This isn`t extra cash compared to previous seasons.It is not a "bonus pot" available to spend.
£10m is less than the club has received for the last couple of seasons but the higher amounts were not enough to prevent the club making a big trading loss. Because of the high costs of running the club , mainly being far too high a wages bill, all the parachute payments have done is reduce losses.

I expect the May 2016 accounts which will be published before the end of this month to show a loss for the year , despite the parachute payment being higher than £10m.

By the end of this season there should be the opportunity to have greatly reduced the wage bill as a result of several players` contracts coming to an end/them being released or sold. This should allow some leeway in the Summer to enable Neil Warnock to bring in a few new players that he is targeting. But the club should /will still need to be cautious ahead of a season that will be the last in which it receives any parachute payments.

Could you remind us please what the losses were for the previous two years ( May 2014 and May 2015) and therefore how much of a loss we could make up to May 2016 without being in breach of the rules?

Assuming we go right up to the limit of allowable losses we can then calculate how much we could lose next season without being in breach of the rules.

It is not quite as simple as just adding up the net losses shown in the accounts, because the allowable loss if after making adjustments for items such as stadium depreciation, youth development costs etc. Also in the year to 31 May 2015 the club had a profit improving figure of £13m disallowed for FFP purposes even though it had to be made for Accounting compliance purposes.

For the record, net losses in 2013/14 were £12m and there was a net profit of £4m in 2014/15

Hi Keith

The May 2015 figures have always baffled me. I understand the way the profit of £4m was reached (wasn't it £5m of allowed losses/funding and £8m of debt conversion) which wiped out the operating loss and produced an accounting profit, but why was that not allowed by FFP rules which state that a club can convert £8m of debt and be funded by £5m of cash from a rich owner?

Also I take your point about the stadium deprecation and youth development but for a rule of thumb couldn't we accept the 2014 and 2015 figures as a rough guide? If we do then is our net loss for the past 2 years is £8m and for FFP it would be that added to this years loss and any possible wriggle room (in theory) would be that sum taken away from £39m?

Tony

A large factor in showing a £4m profit for 2014/15 was an accounting credit of £13m without which the accounts would have shown a loss of £9m. This credit had to be made to comply with a new UK accounting standard, but wasn't accepted for FFP purposes by the League. I said at the time that I considered this unfair on the club.To comply with the same accounting standard this year is likely to show a small cost rather than a big benefit 2014/15 moved the figure from zero to £13m as it was the first year it applied. 2016 is likely to show very little movement in the figure , so no benefit in the profit and loss account.


The 2014/15 figures also included some big benefits that I don't expect to see repeated in the 2015/16 ones. For example, we won't have made as much as £9m on player sale profits, And will Vincent Tans debt write off be as high as the £13m in that year?

Added to the above, the club,s income must have fallen as attendances dropped.

The above is not meant to be pessimistic, just realistic as to why there are still issues with FFP to deal with.

P.S the stadium depreciation and impairment charge was £1.6m in 2015 and £6.9m in 2014 ( the "red elephant" of the stand extension had almost half it's value written off that year.

Hope this helps

Keith

Thanks it does help and I agree the FFP rules do seem to be unfair on us. I await your opinion on the accounts with added interest.