" Fascinating insight into Cardiff City's finances "

On Twitter by financial expert and blogger The Swiss Ramble



" Cardiff City financial results for 2016/17 "

Cardiff City financial results for 2016/17 covered their third consecutive season in the Championship following relegation from the Premier League, when they finished 12th, before securing promotion under Neil Warnock this season.



CardiffCity 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.

CardiffCity £127m is the second highest in Championship



Cardiff City loss rose from £8.7m to £21.1m, mainly due to no repeat of a 15/16 write-off of £10m of owner Vincent Tan’s debt. Similarly, previous season benefited from £0.4m once-off business rates rebate. On the other hand, 15/16 also included £2.2m of management severance.

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Cardiff City revenue dropped £4.4m (13%) to £28.8m, mainly due to a £4.5m reduction in the Premier League parachute payment, which decreased broadcasting income to £20.6m. Match day was also down £0.7m (16%) to £3.5m, but commercial was £0.6m (14%) higher at £4.7m.

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What are the "other expenses" that rose. Thought we were cutting costs.



Swiss Ramble:

Since Vincent Tan bought #CardiffCity in May 2010, the club has accumulated £93m of losses, averaging £13m a season. The only time that they managed to make a profit was £4m in 2015. They even made a £12m loss in their one season (to date) in the Premier League in 2014.

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Cardiff City profit on player sales was up £3.1m to £5.6m. Wage bill was cut £4.5m (13%) to £29.0m, but other expenses were up £3.7m (56%) to £10.3m. Player amortisation/impairment was £3.4m lower, but interest payable was £7m higher, due to shareholder loan discounting.



@SwissRamble

CardiffCity £21m loss was 4th largest in Championship in 2016/17, only below BHAFC £39m (including £9m promotion bonuses), WWFC £23m & #FFC £21m. Almost all clubs in this division lose money. Exceptions normally due to once-off items (high player sales, loan write-offs, etc).

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Just shows you cannot get promoted and stay in profit.

Swiss Ramble:

Since Vincent Tan bought #CardiffCity in May 2010, the club has accumulated £93m of losses, averaging £13m a season. The only time that they managed to make a profit was £4m in 2015. They even made a £12m loss in their one season (to date) in the Premier League in 2014.

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Furthermore, #CardiffCity 2015 £4m profit was entirely due to once-off factors:

Including £10m profit on player sales (Caulker, Medel & Mutch) and a £13m debt-write-off, not to mention a £13m technical accounting adjustment for loan discounting in interest receivable.

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CardiffCity profit on player sales was up from £2.5m to £5.6m, mainly due to moves of David Marshall to Hull City and Fabio to Middlesbrough. Few Championship clubs make big money from player trading, but Cardiff were a long way behind Aston Villa £27m and Fulham £17m in 16/17.

Cardiff City EBITDA (Earnings Before Interest, Depreciation and Amortisation), which strips out player sales and non-cash items to give underlying cash profitability, has declined from a £22m peak in the Premier League in 2014 to minus £11m in 2017.

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This shows #CardiffCity 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 & Fulham). In fact, their £42m wage bill in 14/15 is the 7th highest ever in the Championship.

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CardiffCity debt benefited from £16m equity conversions including £8m in 16/17 (plus £12.7m in 17/18) and £23m of write-offs. Tan pledged in Feb 16 to entirely convert his debt into shares (£68m immediately plus £8m a year for 5 years), but not yet done for “regulatory reasons”.

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@SwissRamble

Nevertheless, #CardiffCity £127m is the second highest in Championship only below Brighton £207m (new stadium & training ground). Also have £6.6m contingent liabilities: transfers £4.8m and Langton £1.75m (to be paid, as dependent on promotion).

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FFP allows maximum £39m loss over 3-year period (current season plus previous two seasons). By my calculations, #CardiffCity were fine in 16/17, but will breach allowable limit in 17/18. In the past club had transfer embargo in Jan 16 transfer window for breaching limit in 14/15.


CardiffCity 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.

CardiffCity 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.

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Tan and his friends have put a huge amount of money into #CardiffCity, 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.

My View: Our Debt was rising still and after this season there was No more Sky parachute payments.


So if we had not been promoted this season, we were in serious trouble as after 9 years we had not been able to reduce our debt in fact it had risen beyond to one point at nearly £170 mill and we had now started increasing again.

We would of been in the shit to be honest next season if Neil Warnock had not got us to the Premier League on his small Budget, Warnock deserves to be knighted for his achievements in football


" NEIL WARNOCK 8 PROMOTIONS & 7 CLUBS SAVED FROM RELEGATION INCLUDING CARDIFF CITY ON BOTH ACCOUNTS "

I think what this shows is football in its current guise cannot last much longer.

The bubble is going to burst as some point and a lot of clubs will fold. We are not the only ones in a predicament like this and we are lucky we now should have at least a 4 year cushion thanks to promotion and parachute payments.

Player wages and transfer fees have to drop for the good of the game

Just goes to show how unimportant gate receipts are as at 3.5 million they represent not much more than 10% of turnover. And of course they will be even less significant next year.

One strange statistic I don't understand. How on earth did Forest manage to make a 32 million pound profit? They had no parachute payment either.

Just goes to show how unimportant gate receipts are as at 3.5 million they represent not much more than 10% of turnover. And of course they will be even less significant next year.

One strange statistic I don't understand. How on earth did Forest manage to make a 32 million pound profit? They had no parachute payment either.

I think that was the year they had the ownership takeover from that hawazi guy and sold Oliver Burke for stupid money

Wages in the game are completely out of control. Something has to give before long.

Just goes to show how unimportant gate receipts are as at 3.5 million they represent not much more than 10% of turnover. And of course they will be even less significant next year.

One strange statistic I don't understand. How on earth did Forest manage to make a 32 million pound profit? They had no parachute payment either.

I think that was the year they had the ownership takeover from that hawazi guy and sold Oliver Burke for stupid money

Yes I remember now. They got about 15 million for him. But 32 million profit? Still the figures show Barnsley making £13 million. Its the interest on our debt £8 million which is isn't helping our figures.

Wages in the game are completely out of control. Something has to give before long.

That without doubt is the elephant in the room.