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Some journalists and Trust members have been confused and are uncertain over the difference between debt and equity as it impacts on Cardiff City.

Trust board member Keith Morgan, an accountant and football finance expert, has set out the position.

DEBT OR EQUITY – WHAT DOES IT MATTER TO CARDIFF CITY?

Many people have raised the issue of Vincent Tan`s continued delay in carrying out his promise  , made publicly on several occasions , to convert all of the loans he has made to the football club into shares and to make the club debt free.

Some fans are of the view that it makes no difference on the basis that “he only owes the money to himself” now that he holds a significant majority of shares in the club`s parent company. However, unfortunately, this is simply not the case.

As long as Vincent Tan continues to be a creditor of the company then it gives him two significant powers

1)     To control the board of directors by appointing the majority of the holding company board – Malaysian employees of his who can simply outvote the UK directors – even though Vincent Tan is not officially a director himself (although under UK insolvency law , should the company enter a formal insolvency , he would be regarded as one because of that control he exerts)

2)     More importantly, he can demand his money back at any time as it is not a term loan to be repaid over a period of time, but is repayable on demand like an overdraft. There appears to be a wide disparity between Vincent Tan`s own claims that he is owed £70m to £80m by the club and the claims of the Chairman Mehmet Dalman that Vincent Tan has put in up to £140m. Whichever figure is correct , the club simply does not have the money to repay it even with a sell-off of a lot of players and Vincent Tan taking all the end of season Sky TV payment plus next season`s first instalment of “parachute” payment. (The football authorities may not allow this to happen anyway if they believe the club may fold financially as a result and hold on to the money until the position is clear).

If Vincent Tan honours his promise to convert all debt into shares, then he is no longer owed any money and can make no demand for repayment from the club. His outlet for recovering his money would then be a sale of his shares to a new investor. Two other routes are NOT available to him in the foreseeable future.

1)     A float on a Stock Exchange, either in the UK or Singapore or Malaysia. The club simply does not qualify for such a float due to its record of financial losses and lack of growth potential ( a relegation would half the club`s income while as it would have to finish well up the Premier League on a consistent basis to significantly improve this season` income level). The inability of the club to follow this route was confirmed by the Chairman at a recent meeting with supporters` representatives.

2)     Paying himself back with big share dividends each year. This would be a breach of UK law as companies are only able to do so out of cumulative profits – i.e. all of the £millions of losses from past years would have to be cleared first. The recently amended budgeted profit for the current season is about £12m even playing at the top level with all the Sky income that entails, so it would take ages for this to happen.

So Vincent Tan sticking to his promise to convert all his debt into shares DOES make a difference to the club`s financial stability – a very big difference. I am sure that most fans hope that he will honour that promise as soon as practicable as it was first promised to be done when the Langston debt was settled, which happened several months ago.

Cardiff City Supporters’ Trust Membership Group

A major exercise has been undertaken to clean up the membership database to ensure it is up to date and accurate.

We are looking for enthusiastic volunteers to help with maintaining the membership records, in order to keep the database up to date and accurate.
If you feel you can help please contact Paul Evans via members@ccfctrust.org who can provide further information.

The Trust received a response from the Football League last week after it raised the issue of full consultation by owners with fans when rebranding is proposed.

Commenting on the response (below), Trust chair Tim Hartley said: “It is good to see the League recognise the all-important role that fans and supporters groups should play in major decisions, including the rebranding of a club.

“We welcome their clear statement that ‘formal consultation has a part to play’ when things like the playing colours and crest, the name and the location of a football club are being considered. We agree with the League that further discussion is needed and look forward to receiving the response of the other footballing authorities.”

Responses are awaited from the Premier League and Football Association.

Thank you for your letter dated 26^th March 2014.

The issues you raise are clearly very sensitive matters for football supporters and we appreciate the importance of traditional values.   As you recognise, a change of name is already covered under FA rules and the case of Hull City was considered by the FA Council earlier this week.

However, club owners equally feel that they have the right to determine the policies to be adopted by their club.  Ticket prices, for example, is another matter over which there has been much public debate but, not unreasonably I would suggest, owners are always likely to insist that this must remain a business decision.

So, whilst we would agree with you that there is a balance to be struck here over some aspects of the club’s identity where formal consultation has a part to play, further discussion is needed – particularly around where the lines are drawn.  Otherwise, there will be a fear amongst owners that this is simply ‘the thin end of the wedge’.

Nevertheless, we understand your concerns and would support the idea of these being debated further with other football stakeholders.

Kind regards

Andy  Williamson, Chief Operating Officer

The Football League Ltd

This year Wrexham Football Club celebrate its 150th Anniversary, and the club is organising a number of events to celebrate this, as well as raising much needed funds for the club.

As you maybe aware Wrexham are a 100% fans owned club and rely heavily on fans contributions, and with this in mind we would like your help in promoting an event that will give other Trusts and supporters groups a chance to raise funds for their own group or club.

For the past three years, Wrexham fans have climbed to the highest point in Wales, Snowdon, as a fundraiser, raising close to £40,000. However, this year we are limiting the number of Wrexham fans making the walk to …….150! This is where you come in…….

We are looking for 150 other Supporters Trusts or Supporters groups to join us in making the walk on behalf of their Trust / Club to raise funds for their own organisation. We want no more than two fans per Trust/Club registering for the walk, and for them to collect sponsors that would be for their Trust / Club.

The walk is to take place on Sunday 29th June 2014, and the ascent will start from the Pen-Y-Pass car park up the Miners Track route at 10pm. Wrexham Supporters Trust will put on coaches departing from Wrexham at 8am, as there is minimal parking at the Pen-Y-Pass car park.

Those taking part will need to be reasonably fit and healthy. However, please remember that this is not a race to the top! And we encourage everyone to take their time walking up; and stopping to have rests when needed. Please note that at times you are required to scramble up rocks! The walk takes between three and four hours to reach the top, and between two and a half and three hours to descend.

We would ask that everyone wear the football shirt of his or her team (over warm clothing) for an unforgettable photograph opportunity at the top of Snowdon.

We therefore invite Supporters groups to put their representatives forward for this walk as soon as possible. The sooner they start collecting sponsors the more funds they will raise. We would ask that the groups making the walk email snowdon@wst.org.uk for further information and to register.

To register please email snowdon@wst.org.uk or send a letter to WST Snowdon, c/o Wrexham FC, The Racecourse Ground, Wrexham, LL11 2AH.

Ole Gunnar Solskjaer spoke openly and honestly when he met with around 70 Trust members at the Cardiff City Stadium last night. The Bluebirds manager was relaxed, but had admitted he thought he might be given a difficult reception after Cardiff’s 3-0 home defeat against Crystal Palace. “I know the frustration everybody has and I am the same,” he said. “We are in transition and this is a difficult period. But I am a football guy, I love football and I love this club already.”

“I would rather sit and talk to supporters in times like this,” he said. It’s no good hiding until we start winning and then come out and speak. If we are relegated – and we truly believe we can survive – we will go down fighting. If that happens we will go straight back up.”

Solskjaer answered every question during an hour-long meeting and revealed winger Craig Noone will miss the rest of this season with an abdominal injury.

Noone is flying to America for treatment and Solskjaer said: “Craig took a bad knock against Crystal Palace and is going to the USA to see a specialist. We have to find out exactly how serious it is and I doubt we will see him back this season, He is a player who makes things happen for us and he has been terrific, but we will have to do without him over these next few weeks.”

The manager talked about the team, his hopes for Cardiff’s future, stressed he is here for the long-term and said he is going to buy a family house in the Cardiff area. “I met with Vincent Tan after the Crystal Palace match and he trusts me to deal with this,” said Solskjaer. “I never doubted that. He believes, like me, we can stay in the Premier League. My job is to lift the players after the defeat against Palace. Vincent Tan believed it was his job to lift Mark Dempsey, my assistant, and me.”

He went on to say, “Everybody has been hurt and I am not immune to that, but we have a job to do and the team I send out against Southampton, the whole group, will believe that can win that match and, over the last five fixtures, earn the points we need. We accept we weren’t good enough against Crystal Palace, but we look forward and must stick together. Everybody still believes we are in with a chance and we will not give up.” Solskjaer revealed Gary Medel has been suffering from a virus, but is back in full training and will be fit for Saturday’s trip to Southampton.

This was a very successful meeting and we must thank the club for helping make it happen. We hope Trust members will be able to meet the manager and players on a more regular basis next season.

Terry Phillips