The tireless and authoritative Swiss Ramble examines Cardiff City’s 2020/21 financial results, when they reduced their loss from £12m to £11m. Revenue rose £9m to £55m, as TV i the club’s owners.
Losses
In the 11 years since Vincent Tan bought the club in May 2010,
they have accumulated £154m of losses, £81m in the last five 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.
Furthermore, the
2015 £4m profit was entirely due to once-off factors (£13m debt-write-off and
£13m interest adjustment). If the club is correct that they will not need to pay
a transfer fee for Sala, then future financials will be boosted by reversal of
£20m provision.
The £11m loss is clearly not great, it was nowhere near as
much as some others in 2020/21 Championship, e.g. Bristol City £38m, Reading
£36m and Boro £31m. Highest profits from two clubs relegated from the Premier
League the prior season: Norwich City £21m and Bournemouth £17m.
The pre-tax loss narrowed from £12m to £11m, as revenue rose
£9m (20%) from £46m to £55m and operating expenses were cut £3m (4%), though
profit on player sales fell £11m from £14m to £3m.
The operating loss (excluding player sales and interest)
halved from £24m to £12m, one of the best results in the Championship, where
almost every club has big operating losses, i.e. nearly half of them are above
£30m. The club generated a £22m profit
in the Premier League in 2019.
Revenue
The £55m revenue
is £70m (56%) down from the pre-pandemic £125m peak in the Premier League two
years ago. 2020/21 was boosted by £8.8m deferred revenue from extended 2019/20
season. If that is excluded, revenue would have dropped from £55m to £46m.
The £55m revenue was 4th highest in the Championship, only
surpassed by the three clubs most recently relegated from the Premier League, who
all received higher parachute payments: Bournemouth £72m, Norwich City £57m and
Watford £57m.
City received
around £74m in parachute payments in the last two years, but they have lost this
advantage this season. They only got two years of payments instead of the usual
three, as they were relegated after just one season in the Premier League.
Broadcasting
income rose £11m (31%) from £37m to £48m, as money deferred for games played
after 2020 accounts offset lower parachute payments. Match day fell £2.5m (68%)
from £3.7m to £1.2m, as games played without fans. Commercial slightly
increased to £5.6m.
Chairman Mehmet Dalman said, “The pandemic hit us hard”.
Impact not quantified, but the Swiss Ramble estimates at least £3m lost revenue
in 2021 (mainly match day), giving £7m in past 2 years. However, 2021 boosted
by £8.8m deferred TV revenue for games played after 2020 accounts.
Player sales and
purchases
Profit on player
sales fell £11m from £14m to £3m, including Neil Etheridge to Birmingham City
and Callum Paterson to Sheffield Wednesday. Significantly lower than the three
clubs relegated from the Premier League, who each generated between £56m and
£60m.
The Bluebirds have
made very little money from player sales, only £34m in total in the last
decade, most of which came in just two years (£10m in 2015 and £14m in 2020).
This season will include the sales of Kieffer Moore to Cherries and Robert
Glatzel to Hamburg.
The club only spent £5m on players in 2020/21, including Kieffer
Moore. This was less than a third of the previous season’s £19m and well down
from £38m outlay in 2019 Premier League. Three Championship clubs spent more
than £20m (Brentford, Norwich City and Watford).
Interestingly, the £82m gross transfer spend in last five
years is less than £88m outlay in the preceding five-year period. Highest
expenditure was in the two Premier League seasons. Before January window,
Dalman said, “There’s still no money – we’ll do the best we can.”
Average
attendance in 2019/20 (for games played with fans) was 22,746, which was 7th
highest in the Championship. However, this was 8,663 (28%) lower than the
41,409 they achieved in the Premier League, which the club said was “a direct
result of relegation”.
Wages
Wages fell £2.1m (6%) from £35.6m to £33.5m, as player
salaries were down from £27.9m to £26.0m. Likely to further fall in 2021/22,as
some players come to the end of their contracts. It is worth noting that
Cardiff only paid £54m when competing in the top flight. After
the decrease, the £33m wage bill was around mid-table in the Championship, less
than half of Watford £68m and Norwich £67m (though their figures did include
hefty promotion bonuses).
The wages to
turnover ratio decreased from 77% to 61%, which was second lowest (best) in the
Championship, where most clubs have unsustainable ratios above 100% (with no
fewer than 5 higher than 200% in 2020/21). Cardiff had an incredibly low 43% in
the Premier League.
Debt
The gross debt rose £1m to £94m, mainly from owner Vincent
Tan £61m (up £15m), Tomen Finance £15.8m (where Dalman has a significant
influence), Tan’s son £3m and Dalman £2m. There were also £12m other loans, including
£6.2m from the EFL.
The £94m debt is
9th highest in the Championship, though far below the likes of Stoke City
£212m, Bournemouth £165m and Blackburn Rovers £152m. However, Cardiff’s debt
would be much higher without Tan converting £93m into capital and writing-off
£23m in the last decade.
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