Trust News

Latest Trust Magazine Hot Off The Presses

The latest Trust magazine, Moving To A Different Beat, is hitting letterboxes this week.

The 16-page magazine features a superb piece by former South Wales Echo football correspondent, Peter Jackson, who recalls the 1970 sale of John Toshack and the subsequent decline of Cardiff City.

Rob Jeffery looks back at the contribution of Kieffer Moore this season and Rob has also contributed his usual Bluebird Brainteasers quiz while there are features from Paul Evans and David Collins and a message from our chair, Keith Morgan.

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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.

Summary

  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.

 

 

Trust Chair Meets Top Cardiff City Executives

Trust chair Keith Morgan

Trust chair Keith Morgan held a lengthy and positive meeting recently with Cardiff City’s chief executive, Ken Choo and finance director, Philip Jenkins.

The meeting covered a range of issues including the Fan Engagement Index, which recently rated Cardiff City 81st out of the 91 clubs in season 2019-20. The Trust questions the rating given to the club in the index in terms of fan engagement as being unfairly low and we are aware that officials are working on other areas of concern, such as transparency.

We’re pleased to report that the club has already discussed at board level a tribute to the late great Peter Whittingham and an announcement on this will  be made closer to the time when the ground opens to fans.

Among other items discussed was the future season ticket process for the 2021-22 season. We were made aware in terms of timescale and pricing nothing can yet be finalised but the Trust will have a leading role as and when ticket allocations for a return to live games can be discussed.

In addition, Keith Morgan discussed a possible Cardiff City mural in the bay by the artist, Yusuf Ismail. The club made it clear it was keen to reach out to the BAME community that lives close to the stadium.

The Trust also has plans to set up a fans’ food bank at the Trust office, once supporters are allowed back into the Cardiff City Stadium.

We’re pleased that the club is working with us for fans and we’ll keep members informed about updates on the above issues and any others that crop up.

Trust Quiz: The Winner & The Answers

Congratulations to Trust member Jeff Cleaton, who correctly answered the quiz questions set in the March edition of Moving to a Different Beat. He was the lucky person to be drawn out of the hat and wins the first prize of £50.

As a player, he won 2 Football League First Division Champions medals and captained an FA Cup winning team and as a City manager, he won the Welsh Cup seven times – who is he?

Jimmy Scoular was part of the great Portsmouth team that were Champions of the old First Division two years in succession 1949 and 1950. He signed for Newcastle United in 1953 and was immediately made captain. He captained them at Wembley in the 1955 FA Cup Final. He left Newcastle in 1960 to join Bradford Park Avenue where he became player-manager. Sacked in 1964 he was appointed manager of the City in June that year succeeding George Swindin. He had an inauspicious start as our manager in that his first win did not come until his 13th game in charge at home to Esbjerg in our first-ever foray into the European Cup Winners Cup. His time as City manager is rightly remembered for exciting ECWC campaigns including the Real Madrid victory but his league campaigns featured 3 seasons where we avoided relegation in 20th position and the 1970-71 season which ended in the infamous 5-1 defeat at promotion rivals Sheffield United condemning us to 3rd place and a lot of broken dreams. City’s league fortunes then went from bad to worse and he was sacked in November 1973. An uncompromising individual, if you ever stood in the Enclosure his fusillades of bad language from the dugout was part and parcel of your match day experience. He is fondly remembered nevertheless.

  1. He played for the City in the Premier League in 2013-14 and later went on to play for Inter Milan, Besiktas and Bologna – who is he?

Gary Medel. Apparently named by his mother after Hollywood film star Gary Cooper. He signed from Sevilla for a supposed club record fee of £11m and “El Pitbull” made an immediate impact as man of the match in our home victory over Manchester City. Arguably our best player in that one season his reputation as a tough tackler with a never-say-die attitude was well-founded. However, his reputation as an avid collector of yellow cards and a red card every 13 games did not come to fruition much to the disappointment of the Press. Diminutive in stature he was very popular with City fans and his departure from the club was inevitable after our relegation. His transfer to Inter Milan for a fee that was £1m less than what we paid for him attracted a degree of criticism for a player that was still an established international and whose reputation had only been enhanced by his one season in the Premier League. He went on to play for Besiktas and Bologna and, at the age of 33, is still a current Chile international with 127 caps to his name.

  1. The Cardiff City Stadium was officially opened with a pre-season friendly on 22 July 2009 against which team?

The first formal emergence of a proposed new stadium took place in 2002 when the Club signed an outline agreement with the Council. The road to completion was not a smooth one with reservations expressed about the level of retail development adjacent to the stadium required to fund its construction as well as the Athletics Stadium. All this uncertainty took place against a period of financial turmoil at the Club with the departure of Hammam, the arrival of Ridsdale and the first appearance of the word “Langston”. Anyway, the stadium was completed in May 2009. Prior to the official opening two games were played- a Cardiff City Legends game on 4 July and a friendly against Chasetown on 10 July. These games allowed the Club to test the processes and health and safety of the new stadium prior to the official opening against Glasgow Celtic on 22 July. One of the reasons for choosing Celtic was in memory of the death of Jock Stein who died at Ninian Park in 1985. The game ended in a 0-0 draw in front of 15,701 fans. The Celtic team that day contained former City favourite Glen Loovens.

  1. Who were the City’s opponents on the last occasion that they won the Welsh Cup? 

The City won the Welsh Cup for the 22nd and final time in 1992-93 at the National Stadium against the mighty Rhyl in front of a crowd of 16,433. It was a 5-0 victory consisting of a hat-trick by Phil Stant and 2 goals by Cohen Griffith. The 1992-93 Welsh Cup campaign was a bit of a goal fest with City scoring 17 times in 5 games en route to the final. Having said that it was only Wrexham that provided serious opposition. Phil Stant had previously scored a 16 minute hat trick in a 5th Round tie against Maesteg Park Athletic and Carl Dale scored 4 and Nicky Richardson a hat-trick in a 9-0 victory over Caerau. However, it wasn’t our last appearance in a Welsh Cup final, we reached that stage at the National Stadium in the 2 subsequent years losing to Barry Town and Wrexham respectively.

  1. Former Cardiff City player Harry Arter is the brother-in-law of which Premier League Manager? 

Fulham manager Scott Parker is married to the sister of Harry Arter who played 25 times for us on loan from Bournemouth in our most recent season in the Premier League.

  1. He played for us in the 2008 FA Cup Final and also won 12 caps for England – who is he? 

There were some pretty aged legs in the Cardiff City squad of 2007-08 and Trevor Sinclair owned 2 of them. Other notable aged legs belonged to Jimmy Floyd Hasselbaink and Robbie Fowler. Trevor had had quite a high profile career with QPR, West Ham and finally Manchester City before being released by them in 2007. We signed him on a 1-year contract in July 2007.He scored twice in 27 appearances that season and was an 86th-minute substitute for Gavin Rae in the final. We did not renew his contract after that season so the Final was his last game before a retirement which he came out of 6 years later to appear briefly for Lancaster City and later Squires Gate in the North West Counties Football League at the age of 44.

  1. In the penalty shootout of the 2012 League Cup Final at Wembley the City only scored 2 penalties – one was by Peter Whittingham who scored the other? 

It was Don Cowie. I still have nightmares about that penalty shoot-out and it was a pretty miserable trip home from Wembley for the third time between 2008 and 2012. With Kenny Miller and Rudy Gestede having missed penalties, we needed to score our 5th penalty to stay in the Final. I’m sure I can’t have been the only one to have had a sinking feeling in the pit of my stomach when Anthony Gerrard stepped up. He never struck me as an obvious choice to take a penalty in such a situation. The fresh legs of Darcy Blake or Filip Kiss might have been a more obvious choice but it was not to be. Fair play to Anthony Gerrard, he stepped up to the plate and did his bit and should not be criticised.  Another case of what might have been.

8. He won 34 caps for Wales and had 2 spells with the City on loan, once from West Bromwich Albion in 2005-06 and once from Wigan Athletic in 2010-11 – who is he? 

The enigma that is Jason Koumas. Koumas found himself on the transfer list at WBA after manager Bryan Robson was not happy with his attitude. Understandable I suppose when you think that Koumas had been on virtual strike there having previously been their player of the year. August 9th, 2005 against Leeds United he came on as a sub for Willie Boland and transformed the game within minutes by going past two defenders and smashing a 25 yard left foot shot past the stunned Leeds ‘keeper. Debuts don’t come more dramatic than that. He made 47 appearances scoring 13 times in a season when, after struggling for match fitness, he settled down to play a dominant role in midfield. I remember journalists at the time using the word “inspirational” to describe him. Words of that magnitude don’t get deployed very often to describe City players. In 2010-11 Jason’s second spell on loan with us, this time from Wigan Athletic, was less than memorable. Struggling for any degree of fitness he only made 6 starts and 21 appearances off the bench scoring 2 goals, both in the same game in a space of a couple of minutes away at Doncaster Rovers. After his second spell with us he was released by Wigan. After a spell out of the game, he resumed playing in 2013 with his first club Tranmere Rovers and retired from football in July 2015.

9.In 2018 whilst playing for Central Coast Mariners in Australia this former Cardiff City player provided the assist for Usain Bolt’s first goal in an official football match – who is he? 

Ross McCormack. Apparently, Ross decided to join us from Motherwell rather than Premier League Wigan because he could play alongside his idol Robbie Fowler only to discover that, when he signed in June 2008, Fowler had packed his bags and left. He scored 30 times in 88 appearances and certainly made an impact on the pitch. Off the pitch, he was arrested in Cardiff Bay for drink driving and banned for 17 months and fined £15,500. He was sold to Leeds in August 2010 for £400,000 where it took him some time to settle down but he became the first Leeds player for 50 years to score in 6 consecutive league games and the first to score 4 in an away game for 87 years. Not being one to let his reputation for off the field activities suffer, in 2013 he was prosecuted and fined for flytipping. When he was sold to Fulham in 2014 for £11m we asked ourselves why we had let him go so cheaply. His 2 years at Fulham were successful and he was voted Fulham’s player of the season twice. In 2016 when he signed for Aston Villa, this time for £12m, we asked ourselves the same question as when he had signed for Fulham. However, it was at Villa where the wheels really came off. He was dropped from the first team squad by Steve Bruce for continually missing training and was accused of being nowhere near fit enough to play. Villa seemingly gave upon him and tried to loan him out at every opportunity. One of these loan spells was at Central Coast Mariners in New South Wales where he provided an assist for Usain Bolt. He left Aston Villa at the end of his contract at the end of the 2018-19 season, two years after playing his last game for them. When this was announced jubilant Villa fans changed his Wikipedia page to show his next club to be “FC Burger King” and the sentence “Overweight Scottish professional footballer who contributed nothing” was added to the Aston Villa section. However, Ross still managed to keep himself in the news. In April 2020, Villa star Jack Grealish crashed his car at 4.00 am after attending a party during lockdown. Whose party was it? Yes, you’ve guessed it – Ross McCormack. In September 2020 at the age of 33 he signed for Aldershot Town. Having said all that, he did a good job for us but you can’t help but think we were short-changed on his transfer fee to Leeds.

  1. In January  2011 on his debut, this rotund striker scored his only Cardiff City goal – who is he? 

Jon Parkin – “The Beast”. You wouldn’t have thought that someone who wore an XXXL sized football shirt would be the person to bolster our promotion ambitions in 2011 but Malky Mackay did when he signed him from Preston. Parkin didn’t have a track record of scoring in the Championship until he joined Preston where he scored 28 times in 100 games. Of course, he scored for Preston in their nightmare  6-0 demolition of us in April 2009. Anyway, Malky thought he was the man for the job and he duly scored on debut with a cracker against Norwich. Admittedly, he was back up for the injured Jay Bothroyd at the time. He did score one more goal for us in the League Cup against Huddersfield in August 2011. His last appearance for us in a “League” game was in the dreaded 2011 playoff semi-final against Reading coming on as a sub for Michael Chopra. A larger-than-life character, literally, my abiding memory of him is the crowd shouting “Beast” in unison when he made an appearance. It surprises me that I should have an abiding memory of him since he actually only made 2 League starts for us but he is a memorable player for all the wrong reasons. Whilst he was with us he had 3 loan spells with other clubs before his contract was cancelled by mutual consent in June 2012. Was he a worthwhile signing? Not really but you got the impression that, under all that timber, there might have been a decent Championship striker.

 

Trust Urges Fans To Donate to Foodbanks – If You’re Able To Do

Keith Morgan

Cardiff City Supporters’ Trust is urging Bluebirds supporters to follow fans across the UK and donate to their local foodbanks –if you can.

Liverpool and Everton fans launched an initiative back in 2015 to help those in food poverty under the initiative Fans Supporting Foodbanks after being inspired by the work of Celtic supporters.

The current coronavirus pandemic has exacerbated the situation for many individuals and families with the Trussell Trust reporting last September that there had been a 61% increase in demand for food parcels.

Trust Chair Keith Morgan said: “Many people across south Wales have struggled to buy food for themselves and their families due to a sudden loss of income in the wake of the pandemic.

“Those in need have turned to foodbanks for help and as a Trust we wanted to invite members and fans generally to support them – if they are able – by donating food or by making a financial donation.

“When fans are eventually able to return to Cardiff City Stadium the Trust will be looking to launch an appeal for donations to be brought to our offices at the ground. They will then be distributed to local foodbanks.”

The ‘Fans Supporting Foodbanks’ and the ‘Right to Food’ campaign can be viewed on social media: Twitter @SFoodbanks / Facebook ‘Fans Supporting Foodbanks’

A ‘Right to Food’ petition to the UK Parliament has been launched and you can sign at https://petition.parliament.uk/petitions/562838

There are a host of local foodbanks –  Cardiff, Barry, Bridgend, Taff-Ely, Pontypridd, Caerphilly, Risca, Blackwood, Taff-Bargoed, Rhondda, Eastern Valley, Rhymney Valley, Blaenau Gwent, Merthyr- Cynon, Brecon, Chepstow, Monmouth, Newport, Vale of Neath, Neath and Port Talbot.

Full information on foodbanks is on the Trussell Trust’s website. The link to the ways to give page is available at Ways to Give – The Trussell Trust. And the list of local foodbanks to donate food can be viewed by clicking  Find a Food Bank – The Trussell Trust