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.'

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The Political Economy of Football V2

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