Tan needs to move on at Cardiff

Former Wales international Gareth Bale is fronting a consortium of US investors that is reportedly looking to purchase Cardiff City. As well as being one of the greatest ever Welsh footballers, Bale is also famously a son of Cardiff, so this story ticks many boxes.

The Times reported that the consortium would be prepared to offer £40m for Cardiff, though it is debatable whether such a price would be acceptable to current owner, Vincent Tan, who has ploughed much higher sums into the club since his arrival in 2010.

The Supporters Trust clearly thinks that the owner shoulders much of the blame for the club’s current predicament, “Relegation in all honesty has been coming since the 2021/22 season and the failure to address fundamental required changes from the top down has now come home to roost.”

There was “a small marginal increase” in Cardiff’s pre-tax loss from £11.4m to £11.7m in 2023/24. Revenue fell £3.5m (13%) from £26.7m to £23.2m, while profit from player sales dropped from £1.7m to just £0.8m.

Despite the lower revenue and player sales, operating expenses were up by more than a third, rising £13.8m from £37.9m to £51.7m, while net interest payable increased from £1.9m to £2.5m.  However, all these adverse movements were very largely offset by £18.4m of exceptional items, relating to the Emiliano Sala case.

Cardiff’s revenue decrease was almost entirely due to commercial, which fell £4.4m (39%) from £11.1m to £6.7m. The other revenue streams were actually higher, as match day rose £0.6m (11%) from £5.5m to £6.1m, while broadcasting was up £0.3m (4%) from £10.1m to £10.4m.

Cardiff’s reported £11.7m pre-tax loss was pretty much par for the course in the Championship, where the vast majority of clubs lose money. In fact, no fewer than ten clubs lost more than £15m in 2023/24, led by Leeds United £61m, Ipswich Town £39m and WBA £34m.    In the 14 years since Vincent Tan bought Cardiff City, they have accumulated £204m of losses, averaging £15m a season.

Cardiff have made very little money from player sales, amounting to less than £10m in the last four seasons. The last time they made a decent gain from player trading was £13.7m in 2019/20, thanks to the sales of Bobby De Cordova-Reid to Fulham and Kenneth Zohore to WBA   Last season will be a little better, thanks to the sale of Mark McGuinness to Luton Town.

Non-parachute clubs will have received more TV money in 2024/25, as the new EFL rights deal represented a 50% increase on the previous agreement. As a result, Cardiff will have got the new central EFL distribution of £5.4m and the Premier League solidarity payment of £5.3m.  However, central distributions in League One will be much smaller at £2.2m (EFL £1.4m and PL solidarity payment £0.8m), so Cardiff will suffer a reduction of £8.5m in broadcasting revenue next season.

Cardiff’s average attendance increased from 19,020 to 21,213 in 2023/24, as the club was more successful that season, improving from 21st to 12th in the league.   Following the same principle, attendances dropped by around a quarter to 16,303 last season, when they finished bottom of the Championship.  The Supporters Trust commented on the decline in attendances, warning that if nothing changes, then “fan support will continue to drift away at an even faster rate than it has already”.

Wages

After falling four years in a row, Cardiff’s wages rebounded big time in 2023/24, rising £5.6m (25%) from £22.3m to £27.9m, though this was still the club0s second lowest in the last 12 years.  The year-on-year increase was driven by player salaries, which surged £5.7m from £14.2m to £19.9m.

Despite the increase, Cardiff’s £28m wage bill was still in the bottom half of the Championship, significantly lower than the three clubs relegated from the Premier League the previous season, namely Leicester City £107m, Leeds United £84m and Southampton £81m.

Cardiff have never paid particularly high salaries, as highlighted by their £54m wage bill in the Premier League in 2018/19, which was the lowest of the 24 clubs that have been promoted to the Premier League in the last eight years.

Cardiff spent £7.5m on players in 2023/24, which was in the top ten in the Championship, though still a lot less than many other clubs. Seven of their rivals splashed out at least twice as much, led by Leicester City £62m, Southampton £41m, Leeds United £38m and Coventry City £35m.

Cardiff have only invested around £19m on new signings in the last four seasons. In fact, the £38m gross spend in the five years since relegation is less than their outlay in a single season in the Premier League in 2018/19.

As well as the normal lower expenditure in the Championship, this was partly due to a transfer embargo, imposed after Cardiff defaulted on payment of the transfer fee for the late Emiliano Sala. This restricted the club to signing loanees or players who were out of contract, but was lifted in January 2024 following the final payment of the Sala fee.

Chairman Mehmet Dalman noted other ramifications of the Sala tragedy, “We have an owner who finances the club. He forked out just shy of €20m to buy the most expensive player the club has ever bought and he has no player. So he has become less confident about the whole system of transfers.”

Cardiff actually had the 14th highest debt in the whole of England at the end of the 2023/24 season.  However, the debt would be much higher without Tan converting £136m into capital and writing-off £23m since 2013/14.

Cash has been required for investment into two infrastructure projects: (1) the development of a new Academy training complex that came on stream at the start of the 2023/24 season; (2) the construction of a new first team training base, due to be operational in Q3 2026, including initial payments to secure the 150-year leasehold interest in the site.

Cardiff’s owners, mainly Vincent Tan, have provided a staggering £307m of funding since the Malaysian bought the club, including £23m in 2023/24 and another £15m last season.

Of course, this level of financial support is far from rare in the Championship, though Cardiff’s £110m was actually the third highest in the last four years, only surpassed by Leeds United £221m and Leicester City £180m.   Put another way, Tan has had to pump in more money than any other owner of a club that was ever present in the Championship in that period.

Cardiff City could be an attractive proposition to potential investors, given that they have a decent stadium, solid plans to develop the training ground, a sizeable catchment area and good transport connections.

Indeed, the club’s potential was demonstrated by reaching the Premier League twice in the last 12 years, though the relegation to League One equally demonstrates the magnitude of the challenge.

On the plus side, Tan 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.  The Malaysian has not been helped by a lack of specialist football experience and knowledge at a senior level, but it has really been his choice to operate in this way.

Cardiff is a club with much potential, but they almost certainly need Tan to move on. As the Supporters Trust said, “Big changes are needed, and needed now, to avoid a further downward spiral in the fortunes of the club that we fans love.”