Cardiff City’s Latest Accounts: Trust Chair Gives His Analysis

Keith Morgan

Trust chair Keith Morgan, accountant and football finance specialist, presents his present expert analysis of the latest audited accounts for the year ended May 31, 2020, submitted by Cardiff City Football Club (Holdings) Limited.


  1. The club made a net loss for the year of £12.2m in its first season following relegation from the Premier League
  2. As at May 31, 2020, it had net liabilities in the balance sheet of £24m
  3. The directors have received a letter of support from the club`s principal shareholder in terms of his future intentions to provide funding for the club to enable it to continue operating for the foreseeable future.
  4. The directors have expressed their strong confidence that the club continues to be compliant with the financial requirements of Profitability and Sustainability Rules (Financial Fair Play).
  5. The club will continue to receive a “parachute payment” in financial year 2020-21 but not beyond that which will have an adverse impact on income of around £30m.

Financial Result For The Year – Statement Of Comprehensive Income

The club made an operating loss for the year of £23.8m compared to a small operating profit of £2.2m in the previous year to May 31, 2019. After accounting for a substantial profit on player sales and interest the loss for the year was reduced to £12.2m (2019 loss £755k).

The principal reason for the increased losses was the huge decline in income following the club`s relegation from the Premier League. Turnover fell from £125.2m in 2019 to £46.0m in 2020, largely due to a fall in broadcasting income of £70m from £107m to £37m. Gate receipts fell by £4m due to lower attendances at Championship level, and sponsorship, advertising, etc. also fell by £5m.

In addition, the club was badly impacted by Covid restrictions towards the end of the financial year. The postponement of the end of the season and its non-resumption until June meant that some £8.8m of TV revenue was deferred until the following financial year. Also, some £2.1m had to be repaid in respect of the club`s share of EPL refunds paid for matches not played under the overseas broadcasting agreement. Without these two amounts, totalling £10.9m the club would have shown almost a breakeven position for the year.

Despite the obvious great efforts by the club to reduce costs in the year (see below), to cover such a fall in income was virtually impossible but big savings were made, including the following:

  1. Player-related wage costs were reduced by £14.6m from £42.5m to £27.9m. This accounted for a significant proportion of the overall saving in cost of sales of £34.8m.
  2. Administrative expenses fell by £26.7m from £62.1m to £35.4m. This was largely due to the fact that the 2019 figure included a provision of over £19m in respect of the legal case surrounding the Emiliano Sala transfer dispute with FC Nantes. In addition, a reduction in player impairment charges of £11.6m was enjoyed compared to 2019.
  3. In the year to May 31, 2020, the club made a significant profit on the sale of players of £13.7m. In 2019 there was a much smaller profit made of £2.1m.

The Statement Of Financial Position as at  May 31, 2020

As a result of the net loss of £12.2m in the year and a technical tax adjustment of £271k, the overall net liabilities of the club increased to £24.0m (assets of £123.8m and liabilities of £147.8m). The main assets and liabilities were as follows:

The value of the playing squad was £24.2m, very similar to that in 2019. £18.5m of player cost was added to the squad in the year and players initially costing £14.6m were disposed of, but those players had been depreciated down to a net nil value at the time of disposal (hence the large player transfer profit referred to above in the profit and loss account). Overall, player value was written down by £17.8m in the year (amortisation).

The Cardiff City Stadium was valued (based on an independent professional valuation carried out in 2018) at £81.0m, with other fixed assets such as fixtures and fittings having a value of £1.2m and training ground improvements of £314k.

As at May 31, 2020, the club was owed £14.4m by various debtors, most of which (£13m) related to future instalments due on player sales. It also had £2.4m of cash at bank and £207k of stocks.

Technically, the club had £118.6m of liabilities as at May 31, 2020, which were payable by May 31, 2021, or earlier. However, in reality, much of this didn`t have to be repaid in that timescale as explained in the following breakdown of some elements of that total figure

  1. £45.9m was due to Vincent Tan and £3m due to his son U-Peng and as principal shareholder, this sum is unlikely to be required to be repaid in the short term. In fact, during the year Vincent Tan put a further net amount of £8.8m into the club by way of loans. There was no debt write-off or conversion of debt to shares in the year. All Vincent Tan loans are secured against all the assets of the club.
  2. There were £37.9m of other loans made to the club as at the year-end,

stated to be secured against guaranteed future income streams. This would include future broadcasting money, plus future instalments due from other clubs arising from player sales. There are no charges registered at Companies House other than two in favour of Vincent Tan so it is assumed that the security for these loans is by means of an agreement with Vincent Tan through the security that he holds and has registered.

  1. The club owed £3.9m in future instalments of transfer fees for players bought.
  2. There is a figure of £20.2m for accruals. This included a sum of £8.8m which relates to parachute income and EFL basic award money which (because of the Covid-19 deferment of the season) did not take place until the following financial year which started on June 1, 2020. Also included is £2.1m relating to an EPL rebate due as the club`s share of broadcasting income refunded as a consequence of the deferral of matches at the end of the season.

A sum of £5.9m was due to other parties but not repayable for over one year after May 31, 2020, – secured as referred to above.

There remains a provision in the club`s accounts (as there was in the previous year) in respect of the ongoing legal dispute over the Emiliano Sala transfer. The figure is £20.7m but, as the accounts clearly note, no such sum is considered payable and will be extinguished after a subsequent hearing of the case by the Court of Arbitration for Sport. However, to comply with prudent accounting requirements, full provision continues to be made in the accounts.

Events After The Balance Sheet Date

The year to May 31, 2021, is also going to be very difficult financially for the club as Covid-19 has continued to have a major adverse impact on football generally for the whole of the 20-21 season. The continued cash flow support of Vincent Tan and other funders was mentioned at a recent meeting with fans` groups and the media and there is also some reference in the accounts (Note 29) to further funding of £34.8m received by undisclosed parties between May 2020 and the April 2021 signing of the accounts at interest rates of up to 9%. The same accounts note reveals that part of these funds was used in that period for the acquisition of new players at a cost of £5.2m.

  • The accounts were approved by the board of directors on April 19, 2021, and signed off as approved by the independent external auditors on April 26, 2021.