Promotion worth at least £166m for Cardiff

Got this via Penarth Blues on the other forum.Very interesting read.


https://footballeconomyv2.blogspot.co.u ... m-for.html

May 10, 2018
The Swiss Ramble takes an in depth look at Cardiff City's accounts for 2016/17 following their promotion to the Premier League.

TV income of £21m was significantly higher than £8m received by most Championship clubs without parachute payments. In the Premier League they will receive £94m even if they finish last. Added to £72m parachute payments, this means promotion is worth at least £166m.

Revenue has declined by £54m (65%) from £83m to £29m since relegation in 2014. Most of this decrease is broadcasting £43m, but commercial £6m and match day £5m are also down. Promotion is very timely, as 2017/18 is the last year of parachute payments (around £16m).

Tan and his friends have put a huge amount of money into Cardiff City, around £182m (£166m loans & £16m new share capital). This has covered large operating losses, while funding player purchases and infrastructure investment, so that books are balanced from a cash perspective. In 2016/17 owners provided Cardiff City with a net £16m loan, which was used to cover £11m loss from operating activities, with £1m added from net player sales. This has been fairly standard procedure since relegation from the Premier League with the club heavily reliant on Tan.

The club's gross debt rose from £115m to £127m, comprising £115m owed to owner Vincent Tan (up £14m) and £11m owed to Tormen Finance Inc (down £3m), in which club chairman Mehmet Dalman has a significant interest.

Cardiff City spent £6m on players in 16/17, in the lower half of the Championship. They were significantly outspent by Aston Villa £88m, Wolves £32m and Fulham £24m.

The club's wages to turnover ratio of 101% might sound awful, but there are no fewer than 11 clubs with higher (worse) ratios in the Championship. This shows Cardiff City's determination to reduce the wage bill to more manageable levels, especially as they had the 3rd highest wage bill in the Championship in 15/16 (only behind QPR and Fulham). In fact, their £42m wage bill in 2014/15 is the 7th highest ever in the Championship.

The £29m wage bill is 8th highest in Championship of clubs that have reported to date, but a long way behind Villa £61m and Norwich £55m (and probably Newcastle United when they publish accounts). For more context, it was lower than this season’s great promotion rivals Fulham at £37m.

The 16,564 attendance was only the 16th highest in the Championship last season, a long way behind the top two (Newcastle 51,106 and Villa 32,107). If their crowds get back to the 27,000 level in the Premier League, they would be around mid-table in the top flight. This season attendances have been over 20,000.

The Swiss Ramble concludes, 'Cardiff City's finances will be transformed by winning promotion to the lucrative Premier League, though they will face a tough challenge against far wealthier clubs. The good news is that this did not prove to be an insurmountable obstacle in the Championship.'

what happened to tan writing off 40m then like 8m a year?


also the 166m figure is misleading, because if we get relegated again we will likely be treading water even with the parachute payments.

what happened to tan writing off 40m then like 8m a year?


also the 166m figure is misleading, because if we get relegated again we will likely be treading water even with the parachute payments.

Isn't the debt to equity being held up by Malaysian red tape well the speed of it? As can only do ex amount every year due to regulations? Presumably 166m is total amount club will get with parachute payments if relegated next season! so not misleading amount but obviously wages ect need to be taken into account.

what happened to tan writing off 40m then like 8m a year?


also the 166m figure is misleading, because if we get relegated again we will likely be treading water even with the parachute payments.

Isn't the debt to equity being held up by Malaysian red tape well the speed of it? As can only do ex amount every year due to regulations? Presumably 166m is total amount club will get with parachute payments if relegated next season! so not misleading amount but obviously wages ect need to be taken into account.

its misleading to a point, especially if people think its a fast track to massive wage increases.

as for the DtoE - after the initial announcement i have seen nothing, and there was nothing (unless i missed it) in the latest accounts about and of the debt being reduced.

what happened to tan writing off 40m then like 8m a year?


also the 166m figure is misleading, because if we get relegated again we will likely be treading water even with the parachute payments.

Isn't the debt to equity being held up by Malaysian red tape well the speed of it? As can only do ex amount every year due to regulations? Presumably 166m is total amount club will get with parachute payments if relegated next season! so not misleading amount but obviously wages ect need to be taken into account.

its misleading to a point, especially if people think its a fast track to massive wage increases.

as for the DtoE - after the initial announcement i have seen nothing, and there was nothing (unless i missed it) in the latest accounts about and of the debt being reduced.

the equity swap seems to have been put on hold possible due to financial fair play, i havent got a clue why tbh, vincent Tan has waived all interest accrued before may 2017 and kept us afloat with enough money to make a promotion bid

He's done several debt to equity swaps, but each season he's been ploughing more money into the club so the net effect is that the debt is still very high.

He's done several debt to equity swaps, but each season he's been ploughing more money into the club so the net effect is that the debt is still very high.

He appeared to be doing a balancing act to stay within ffp give money for players and not to lose money? Debt to equity is not a simple thing to do when conducting it through Malaysian banking system , has been said before the problem seems to be with Malaysian system holding up what tan wants to do? Maybe being in premiership will help unlock things quicker

I know the regulations of FFP have slightly changed a club can lose £39m over a 3 year period. Whilst this is not an exact science that is equal to £13m per season. At one time this could be covered by a £8m share investment and £7m cash investment/loans etc.

As Lawnmower said we have been losing so much that the £8m conversion has been swallowed up before it could make a difference.

The last 2 years we have lost something like £8m and £21m meaning total of around £29m leaving wriggle room of only £10m if we hadn't got promoted.

We need old Keith on this but I think I'm right in saying the FL and PL run their FFP (or whatever it is called now) separately?

He's done several debt to equity swaps, but each season he's been ploughing more money into the club so the net effect is that the debt is still very high.

He appeared to be doing a balancing act to stay within ffp give money for players and not to lose money? Debt to equity is not a simple thing to do when conducting it through Malaysian banking system , has been said before the problem seems to be with Malaysian system holding up what tan wants to do? Maybe being in premiership will help unlock things quicker

It is taking so long that I'm starting to wonder if the regulation excuse is just that an excuse. The only thing I can think of is such a large amount being written off might have tax implications?

Apparently Malaysia is rife with corruption and a new 92 year old President has just been voted in who is going to sought it all out