Is it Promotion or Bust – For Cardiff City?
Cardiff City supporters have been left reeling by the latest set of financial accounts published by their club, for the year ending May 31, 2012. The accounts recorded losses of £13,605,000 – bringing their overall debt to just over 83 million pounds!
The figures however showed that the club has made a significant increase in turnover, from £15,947,000 to £20,216,000 during that period, this was largely due to an appearance in the Carling Cup final which contributed almost £2.3m to turnover for the year. Along with an increase in the uptake of season tickets for the then forthcoming 2012/13 season in order for fans to secure tickets for the said Carling Cup final together with a marked upturn in the sale of replica shirts and memorabilia for the same reason.
The club ironically offered an amnesty to supporters – an offer of a half price Cardiff City first team shirt for any Liverpool FC replica shirt taken into the club shop in the run up to the Carling Cup final, (there being a large number of Welsh based Liverpool supporters who it was feared would go to Wembley amongst the City supporters – aware there was no tangible way to prevent them from doing so) the aim was to ensure the Cardiff City section of Wembley did at least appear all Blue.
However that increase in turnover was quickly eaten up by rising administrative costs, interest on loans to the club and approximately £1.6m which was paid out to Dave Jones and his backroom staff after they were sacked following a failed bid to win promotion in 2010/2011, and money paid to Malky Mackay’s former club Watford for his release.
The biggest shock that came out of the release of the Cardiff City accounts was new to the vast majority of people, that Langston are due a one-off payment of £5m if the debt to them remains outstanding by the time City win promotion to the Premier League. That debt to Langston, the company represented by former Bluebirds owner Sam Hammam, now stands at £19,259,000 repayable by 2016 due to interest.
Overall, Cardiff City Football Club (Holdings) Limited – the umbrella company which incorporates the football club – owes £51,920,000 to creditors in the next 12 months and £31,175,000 to creditors after that period. Encapsulated within the £51m owed over the next year, is £37,431,000 money owed to Malaysian backer Vincent Tan, who is yet to turn the monies he has ploughed into Cardiff City football club into equity as was previously promised, which would if converted would make him the major share holder/owner and not backer of the club and wipe that sum immediately from the clubs books.
Elsewhere, the wage bill in 2012 was up to £18.5m from £13.9m the previous year. With worse to come for this season 2012/2013 aside from a further increase in the wage bill due to the signings made to strengthen and improve The Bluebirds squad in an attempt to secure Premiership football at last.
There will also be the transfer fees for the said players, players such as; Nicky Maynard, Craig Noone, Jordon Mutch, Etien Velikonja, Craig Bellamy, Tommy Smith, Frazier Campbell, Simon Lappin, Heidar Helguson and Kim Bo-Kyung.
Outlining the club’s financial position, directors of the club in their report said: “Whilst the dream of reaching the Premiership wasn’t realised, increased revenues and some improvement in operating performance was achieved. The club continues to face the challenging financial environment presented by the Championship competition, as illustrated by the operating loss year-on-year, despite significant turnover growth – these gains being absorbed by increased direct football costs.”
In their summary and outlook for City, directors added: “Through the continued support of our Malaysian investors we have invested in the playing squad and hope to see the benefit of that investment during the remainder of the season as we push for the desired aim of promotion and beyond.”
“For the 2012/13 season the club made a strategic decision to change the colour of its home strip from blue to red but retained the blue strip for away matches. Accompanied by a change in the club’s badge, the rebranding is seen by the club as a positive step in securing future commercial opportunities. The new investors have indicated that providing the business develops as planned, they will continue to support the club in the foreseeable future and provide additional finance in order that it can settle its liabilities.”
Many have interpreted that to mean its promotion or bust for Cardiff City this season, a view perhaps given credence by the lack of real commitment made in the Carling and FA Cup’s by the Bluebirds, who bowed out of both competitions to lowly opponents in the first round having fielded little more than their development squad, it’s a risky strategy given the two million plus pounds The Carling Cup final brought into the club last season.
Also to be worked into this season’s figures will be the 150 plus season tickets that were refunded to disenfranchised Cardiff City supporters who couldn’t stand to see as one put it “Their clubs history and tradition flushed away on the whimsical idea that red is more lucky than Blue.”
And the knock on effect on replica shirt sales is plainly obvious at every Bluebird game the red strip is in the minority. Those three factors alone mean that the 2012/2013 season’s figures are going to be at least £6million less than the 2011/2012 figures just announced. While, as of yet, there’s been no evidence offered forward of the increase in sales of replica shirts in the Asian market which the rebrand into red was purported to bring
The financial figures back up what most Cardiff City supporters feel – this season it really is imperative for The Bluebirds to be promoted, tradition, history, pride, millions of pounds and everything , but the kitchen sink have been thrown at the shot at “promotion to the promisedland” this season – The notion that Cardiff City aren’t promoted is simply unthinkable and sitting ten points clear of the chasing pack at the top of The Championship it does all seem to be going to plan, but there are a lot of games to be played yet and every long time Bluebird supporter will tell you things are never plain sailing or easy for the club.