Cardiff would have broken even without pandemic

The authoritative Swiss Ramble has reviewed the 2019/20 accounts of Cardiff City.

The club swung from £3m profit to £12m loss, as revenue fell £79m (63%) from £125m to £46m due to relegation and COVID, partly offset by profit on player sales rising £12m to £14m, while expenses were down £33m and no repeat of prior year £20m provision for the Sala transfer.

Although the £12m loss is clearly not great, it was around mid-table in the Championship with many clubs reporting much larger losses in 2019/20, including Stoke City £88m.

In the decade since Vincent Tan bought the club in May 2010, they have accumulated £142m of losses, half in last 4 years. In that period the club has only had two (small) profits, £4m in 2015 and £3m in 2019. They even contrived to lose £12m in the Premier League in 2014.

The £79m revenue fall was largely driven by broadcasting’s £70m (66%) decrease from £107m to £37m, due to lower TV money in Championship, though commercial also dropped £5m (48%) from £10m to £5m and match day fell £4m (53%) from £8m to £4m.   Even after the fall, revenue was still the 6^th highest in the Championship.

If parachute payments were excluded, revenue would fall to £18m (£42m parachute less £2.1m rebate and £7.8m revenue deferral, replaced by £4.5m solidarity payment). This would have placed them mid-table in the Championship, around a third of Leeds £54m.

The Bluebirds will receive around £76m in parachute payments: £42m in 2019/20 and £34m in 2020/21 (before any COVID rebates). They only get two years of payments instead of the usual three years, as they were relegated after just one season in the Premier League.

To compensate for the steep revenue decline, the club cut the wage bill by £18m (34%) from £54m to £36m and other expenses by £6m (31%) to £14m.

Commercial income halved from £10.4m to £5.5m, partly due to the pandemic causing loss of revenue and sponsorship opportunities.  They are now in the bottom half of the Championship, far below the likes of Leeds £34m, Bristol City £14m and Stoke City £14m.

COVID resulted in £12.3m reduction to revenue, split between £3.5m lost (match day £1.1m, TV rebates £2.4m) and £8.8m broadcasting deferred to 2020/21. Without this, revenue would have been £58m and they would have broken-even.

Profit on player sales rose £12m from £2m to £14m, mainly Bobby Reid to Fulham, Kenneth Zohore to WBA and Bruno Manga to Dijon. That’s pretty good, but still a fair bit lower than WBA £29m, Bristol City £26m, Brentford £25m and Hull City £23m.  The club have made very little money from player sales, only £31m in total in the last decade, most of which came in just two years (£10m in 2015 and £14m in 2020).

Following relegation, the wages to turnover ratio increased from an incredibly low 43% in the Premier League to 77%, which is the third lowest (best) in the Championship. The vast majority of clubs in this division have unsustainable ratios well over 100%