Skip to main content

Promotion worth at least £166m for Cardiff

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.'

Comments

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...