Quiz-orientated Cardiff City fans may want to get clued up at a fundraiser run by that excellent organisation, Show Racism the Red Card.
The event at O’Neills in Cardiff city centre takes place on Friday, April 10th, from 7.30pm.
Entry is £6 and teams can have up to six players.
There’s also musical entertainment, a raffle and free bingo game.
Show your support for the fight against racism.
Trust board member and football finance expert, Keith Morgan, gives his take on the club’s latest accounts with a detailed examination of the financial position.
Cardiff City Football Club (Holdings) Limited has today filed their statutory accounts for the year to May 31, 2014. They do not make pleasant reading.
Despite record income for the club of £83.1m in the year (2013 income £17.3m) , principally due to the huge benefit derived from Sky and other broadcasting income (up from £4.9m in 2013 to £64.0m) , it still made an overall loss for the year of £12m.
The overall result is very disappointing – if a club can`t make money in the Premier League with all the broadcasting riches that brings , then when can it?
There are some items in the accounts which do go some way to explaining why a loss was made in the year.
1) The club obviously had to pay more in wages for a squad of Premier League players compared to the previous Championship squad cost (the total wage bill went up £20.4m from £32.8m to £53.2m).
2) The club bought new players at a total cost of £45.8m in the season. It is normal policy in football clubs to write this cost off equally over the length of the contract involved. So the cost in the 2014 accounts of wht is called amortisation of those contracts at £14.5m does not seem unreasonable (£45m over a three year contract period) but was considerably up on the 2013 figure of £7.4m because we bought more expensive players in transfer value terms.
At the end of each year , the club then has to do a further review of its assets to estimate if they have the same real value as their value in the books. In this case , the club decided that the playing squad at 31 May 2014 had a value of £6.6m less than their value calculated as above , so made a further write off in the accounts (the 2013 comparative figure was £4.0m).
3) The club lost £5.1m on player sales in the year (2013 only £345k). Players who were in the books at the time at a combined value of £8.2m were sold for only £3.1m.
As at May 31, 2014 , the total value of the playing squad was recorded as £25.2m (not unreasonable if this included the likes of Medel and Caulker so shouldn`t be much of an overall loss on players for the current season.
4) During the year the club spent £11.8m on the Ninian Stand extension. As with the playing squad above , the club then has to do a year end review to estimate if that is a fair value. It decided it was not , by nearly a half , so there was a further write-off in the accounts of £5.5m, or nearly half of what it had cost.
5) The club had “exceptional costs”( i.e those which don`t relate to normal business activities) of £2.0m . This was to do with the cost of terminating the contracts of Malky Mackay (and his support staff?) part way through the season.This is becoming a bit of a habit for the club as it also had £1.6m of such costs in 2011-12 in terminating the contracts of Dave Jones etc. There will , of course be further costs to the club in the 2015 in respect of terminating the contracts of OGS etc thsi season. This cost is becoming more “normal” for the club than “exceptional” in recent years.
6) On the good news front , the club again benefited from a finance cost credit (as opposed to a cost) in the year , but at £1.6m rather than the higher figure of £5.3m in 2013. This relates to a mix of interest charged by some lenders and interest waived by Vincent Tan, who charged no interest on his loans to the club throughout the year. I have no analysis of the split of this from the club , including an answer to when and where VT`s interest was charged in the accounts to enable it to be waived in 2013/14.(you can`t credit back interest if it wasn`t charged in the first place).
7) A strange note to the accounts appears for the first time this year (it didn`t appear in the 2013 accounts even though the 2014 accounts give a comparative figure for that year). This states that a very large amount of £1.68m (2013 £758k) was paid in the year to “key management personnel”. The club does not have to disclose , for confidentiality purposes , who these people are (they are not directors ) but my guess that this is a new accounting disclosure requirement and relates to the likes of OGS his predecessor as manager – not bad work if you can get it!! (I suspect Russell Slade will not be shown as earning anywhere near such an amount in next year`s accounts.)
8) In the year end balance sheet , the losses of £12m for the year take the overall balance sheet shortfall up to £65.8m. This is the net figure of assets less liabilities.
Assets were £91.4m (stadium and equipment £55.3m , players £25.2m , cash , debtors and stock £10.9m).
Liabilities were £157.2m (due to VT £122.8m , due to Mehmet Dalman £7.5m , due to Langston £5.6m , trade payables £8.8m other debts £12.5m). The other debts would have included normal debts due to HMRC payable after the year end and season ticket money received in advance of the current season.
In analysing the above figures I have assumed that the reference in the accounts to a £7.5m debt due to Torman Finance Inc is a company controlled by the club`s chairman Mehmet Dalman. I have done so on two bases – that I van think of no other director who would have put the money in and because I understand that MD has told the media that it is his company.
9) The accounts enable me to analyse how the amount due in respect of” loans from overseas shareholders and associated undertakings” (VT plus MD in the above figures) has grown from £65.8m in May 2013 to £130.3m in May 2014, an increase of £64.5m. The £64.5m was added to by a new share issue of £2.2m in the year , £3.1m from player sales and £4.2m generated from trading (cash generated is not the same as losses) . That total cash generated of £74.0m was then spent on players( £45.8m) , paying off other debt (£15.4m) and spending on the new stand extension and training ground (£12.8m).
In summary:
The club made an unexpected loss in 2013-4 , despite enjoying the benefits of a greatly increased income from its season in the Premier League.
As a result of the above losses , the club became even more insolvent than it had been before.
Of its total debts of £157m , all apart from £4.5m was technically repayable within one year after May 31, 2014 and the vast majority of it was due to Vincent Tan as a secured creditor which continues to represent a huge financial risk to the club.It is a risk which could have been avoided if the club`s directors had pursued the option publicly offered by Vincent Tan during the above financial period to convert £130m of debt into shares to make the club solvent and virtually debt free (other than accruing debts in the normal course of business).
My personal views on whether a failure to follow this course of action is the appropriate conduct for the club`s directors in carrying out their legal fiduciary duties of an insolvent company is a topic for a separate discussion.
Keith Morgan
With just weeks to go before Wales’s crunch Euro qualifier against Israel, Trust members have a chance to quiz our national team manager Chris Coleman.
The evening takes place at the Cardiff City Stadium on Thursday, March 19, at 7pm.
If you would like to attend please email help@ccfctrust.org to book your place. Places are limited.
Supporters Direct (SD) has provided a football manifesto for the forthcoming UK General Election.
SD is the umbrella group for supporters’ trusts in Wales, England and Scotland and has an increasingly influential and powerful influence in continental Europe.
What they say
Since 2000 we have campaigned for the introduction of reforms that ensure that supporters have a formal role in the ownership and governance of their football clubs.
We believe that:
We believe that governments and sports governing bodies have a crucial role to play in enshrining these principles in regulation and legislation. Political parties have, to a greater or lesser extent, accepted many of them already and involving supporters has been widely accepted as a positive development from people within the game: now is the time for accepted principles to turn into action.
In 2011 and 2013 the House of Commons Culture, Media and Sport Select Committee published a series of recommendations which, although largely accepted by the football authorities, have never been implemented. We believe this is unacceptable, and therefore we call upon all political parties to:
Cardiff City FC today published the minutes of a meeting between the club and fans’ representatives before the Brighton game. Trust board members, Tim Hartley, Keith Morgan and David Craig attended the meeting.
Minutes of a meeting of the senior management of the Club and the official fan groups, held onTuesday February 10th at 5pm.
PRESENT POSITION Mehmet Dalman (MD) Chairman; Ken Choo (KC) General Manager; Wayne Nash (WN) Head of Operations; Nic Heslop (NH) Head of Commercial; Barrie McAuliffe (BM) Head of Communications; Adam Gilliatt (AG) Supporters Liaison Officer; Charlotte Latham (CL) Financial Controller; Philip Jenkins (PJ) Finance Consultant; Simon Evans (SE) Legal Assistant; Tim Hartley (TH) Supporters Trust Chairman; David Craig (DC) Supporters Trust Board Member; Keith Morgan (KM) Supporters Trust Board Member; Clive Francis (CF) Supporters Club Chairman; Vince Alm (VA) Supporters Club Member; Allyson Rees (AR) Supporters Club Treasurer amd Paul Corkrey (PC) Disabled Supporters Member.
1 Chairman’s Welcome
The Chairman declared the meeting open, thanking supporter group representatives for attending. The Chairman also expressed his thanks to those who played a part in the return to traditional colours in.January 2015.
2 September 2014 Meeting Minutes
Previous meeting minutes were distributed and unanimously approved by all members present.
3 Langston
MD responded to questions regarding Langston, confirming that agreements were confirmed before he arrived as Chairman. MD stated the reasoning behind the reopening of the Langston settlement stemmed from the desire to discover who the Club is paying their debt to on ethical grounds. All agreed this was a positive step, as paying debt to an unknown entity carries an extremely high risk.
4 Update of Club Finances
MD confirmed the aim of the wage bill reduction during the January transfer window was work towards making the Club more self-sustainable, with less reliance on the owner. CL reiterated the desire to create a self-supporting Club, and confirmed that there is an intention to file the May 2014 accounts to Companies House in the coming weeks.
CL responded to queries regarding the comparison between PremierLeague and Championship accounts, stating that they are difficult to compare, but commented that the overall cash flow is encouraging following the January transfer window. KC confirmed this by commenting that the Club has seen a sizeable reduction in cash flow over the last few months.
VA raised questions regarding the Club’s strategy for upcoming seasons. MD confirmed that the strategy is to build upon this season’s developments, with the intention to push towards promotion at the earliest opportunity. MD stated the importance of retaining senior, experienced players. Supporter group representatives confirmed their agreement with the Club’s plans to reduce the cash flow and to strive for self-sustainability without TSVT’s continued cash input.
PC asked why some players were allowed to leave without recouping fees. MD and KC replied, stating the need to find the best solution for the Club and individual players. KC confirmed that all players left ongood terms, with the Club finances benefiting in the long term.
5 Debt to Equity
MD responded to KM’s question regarding the intentions of TSVT to convert debt to equity. MD stated that he has advised TSVT to delay the conversion of debt to equity whilst the ongoing issues with Langston exist.
MD questioned the merits of converting debt to equity, stating that he did not see the benefits of conversion as the debt is to one party. KM left the meeting to keep prior commitments
6 Season Tickets and Match-Day Experience
KC gave an update to the supporter group representatives regarding the season ticket sales for the upcoming 2015/16 season. KC and NH stated the current season tickets including hospitality seats stands at approximately 16,000. The Supporters Groups were all in agreement that the pricing structure for 2015/16 was positive.
VA asked for more fan engagement to make the whole match-day experience more enjoyable, using Borussia Dortmund and Wigan Athletic as examples of positive match-day experiences.
KC confirmed the Club are looking into improving match-day experience by creating a match day committee, which will collaborate with the Foundation.
BM and NH reiterated the Club’s ongoing plans to create a better match-day experience, confirming that the Club will be sending a survey to season ticket holders, targeting potential improvements viafan engagement.
TH said the Trust was happy to assist in creating focus groups and ask supporters to complete questionnaires. It was agreed to meet before the Wolves game on the 28th February to present findings and potential improvements the Club can make as a result of the initial survey. Supporter group representatives agreed that this was a good idea, and stated that it is important to target younger supporters for feedback to maximise the survey’s impact.
7 Supporter’s Director
TH reiterated his desire for Cardiff City to appoint a supporter to the Board of Directors, referencing a recent Supporters Trust survey. TH used Notts County, Swansea City and Portsmouth as recent examplesof success with a supporter on the Board.
MD explained the implications of being on the board, outlining the responsibility as a Director to be liable for any financial issues the Club faces. MD also explained the fiduciary obligations a Director is bound by.
MD discussed the potential issues of disclosing information of a sensitive nature, suggesting the possibility of a place on the strategy committee. This would allow fans to have their input without giving an individual supporter access to the Club’s sensitive information.
MD responded to a request from DC, confirming the Supporters Trust are welcome to prepare a dossier regarding examples of supporter Board Members.
8 Supporter Events
PC spoke regarding the most recent Disabled Supporters Fans forum. PC said he thought it was a positive and enjoyable meeting with Russell Slade.
PC asked if other players, or board members, would be willing to come to future events to improve fan engagement, as he believed this would be beneficial to all. MD confirmed that he would be able to attend future events if invited.
All parties agreed on the merits of fans forums at appropriate times.
9 Club crest update
BM gave an update on the updated Club crest. BM confirmed the crest is in its final stages with the Football League and the kit supplier. Visuals will be released at the end of February.
10 Any Other Business
The Living Wage Issue
TH revisited the issue of Cardiff City becoming a ‘Living Wage’ supporting Club, arguing the positive impact on the Club’s reputation. MD stated that TH is welcome to address the board in the next strategy meeting to explain the merits to Board Members. TH confirmed he would be happy to do this.
Current Football Situation
Supporter group representatives replied to questions from MD regarding the current situation on the field, airing their views on the improvements they’d like to see.
Cardiff City Club Charter
PC asked for an update on the Cardiff City FC charter. BM confirmed he is charged with the task of finalising with AG and WN the 2015 club charter and agreed to allow the supporters groups to view the revised charter prior to launch.
PC emphasised the importance of the charter and asked that the charter be compiled with these six main sections prioritised:
Accessibility, Timeliness, Quality, clarity of its complaints and appeals procedures, and contacts for the relevant league and Independent football ombudsman.
PC asked for the charter to be advertised more and brought to the attention of the supporters who may be unaware. All agreed.
Supporter Group questions
Answers to the Supporter Group Representatives’ questions in advance of this meeting are attached in Appendix 1.
11 Close
MD thanked all for their attendance and the meeting was declared closed.
Appendix 1
Questions from Supporters Group Representatives
Where are the programme sellers? It is very difficult to get hold of a programme. Programmes are available from the following places on a match day: The Club Superstore, merchandise booths located in the concourse at Gate 3, Grange/Family Stand, Ninian Stand & Level 5. In addition the Supporters Club sell some from their office located between gates 3 & 4. Additional signage has been put up in the concourse as a result of feedback from supporters and the media team will be listing the available locations in their pre match media releases.
Does the Club have an e-cigarettes policy for the concourse and in the stands?
The current policy on e-cigarettes at the stadium is that they are allowed to be used. If the club receives a complaint it will make the user aware and ask them to refrain from using the e-cigarette. This will continue to be the policy until a statement is made by the Welsh Government. A statement is due in March this year and will provide guidelines to employers on.
What plans are there to complete the Memorial Garden?
It is finished to concept design but will be constantly evolving as more trees, perhaps benches etc are added by fans and or their organisations. There is still no plan to enclose with a fence if this is what the question alludes to indirectly.
Will the club subsidise an away game travel or ticket?
We can expect a proposal for subsidising travel or tickets for a fixture this season.