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Substantial owner funding fails to bring Cardiff success

Cardiff’s pre-tax loss in 2022/23 more than halved from £26.6m to £11.4m. Revenue increased by a third from £20.0m to £26.7m, though profit from player sales dropped from £4.2m to £1.7m.  Cardiff’s £11m operating loss is actually one of the best to date in the 2022/23 Championship, only bettered by Rotherham United, Blackpool and Coventry City.

In the 13 years since Vincent Tan bought Cardiff City in May 2010, the club has accumulated a chunky £192m of losses, averaging around £15m a season.

Even after the steep fall following relegation, Cardiff’s £27m revenue is still in the top ten of the Championship, albeit a fair way below clubs in receipt of parachute payments, e.g. Norwich City £76m, Watford £66m and Burnley £65m were £40-50m higher.

Cardiff’s revenue increase was almost entirely due to commercial, which more than doubled from £4.7m to £11.1m, though match day also rose £0.6m (12%) from £4.9m to £5.5m. Broadcasting was slightly lower, falling £0.3m (3%) from £10.4m to £10.1m.

Cardiff’s profit from player sales decreased from £4.2m to £1.7m, as most of the departures were due to players being released, which did not generate any money, but did have the benefit of lowering the wage bill.

Unsurprisingly, this was one of the smallest gains from player trading in the Championship, miles below the likes of Watford £59m, Middlesbrough £22m, Stoke City £15m and Hull City £15m.

Cardiff have made very little money from player sales, amounting to only £40m since 2013/14, including less than £9m in the last three seasons. The last time they made a decent gain from player trading was £14m in 2019/20, thanks to the sales of Bobby De Cordova-Reid to Fulham and Kenneth Zohore to WBA.

Cardiff have only invested around £12m on new signings in the last three seasons. In fact, their £30m gross spend in the four years since relegation is less than their £38m outlay in one season of the Premier League.

Cardiff’s average attendance increased by nearly 1,000 from 18,048 to 19,020 last season. However, this means that crowds have dropped by almost 40% (over 12,000) from the 31,409 they achieved in the Premier League, which the club said was “a direct result of relegation”.

Cardiff’s wages were cut by £6.9m (24%) from £29.2m to £22.3m, as player salaries were slashed from £22.2m to £14.2m with 11 players coming to the end of their contracts on 30th June 2022.  Wages have now decreased four years in a row, falling by £31m (58%) since relegation, even though Cardiff’s £54m wage bill in the top flight was really low.

After the decrease, Cardiff’s £22m wage bill was firmly in the bottom half of the Championship, which goes a long way to explaining their poor performance on the pitch.

Cardiff’s £98m debt is seventh highest in the Championship, though a fair way below the likes of Blackburn Rovers £163m, Middlesbrough £159m and Birmingham City £149m.   In the last decade Cardiff have been very reliant on their owners: they have provided £194m of funds with another £25m coming from external loans. This has been used to fund £104m of player purchases (net), £20m of infrastructure investment and £9m interest payments, while covering £82m of operating losses.  In fact, Cardiff’s owners, mainly Vincent Tan, have provided £269m of funding since the Malaysian bought the club, including £31m last season alone.

Vincent Tan’s tenure at Cardiff City can be looked at in a couple of ways. There is no doubt that the owner has provided significant funding to the club, but by the same token he has also been responsible for the Bluebirds’ downward trajectory in recent seasons.

 

 

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