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Trust Hit Out At Lack Of Consultation Over Cardiff City Season Ticket Offer

Trust chair Keith Morgan

Cardiff City Supporters’ Trust has slammed a total lack of consultation with supporter groups over the launch of Cardiff City’s season ticket offer for 2020-21 season.

Keith Morgan, Trust Chair, said: “We fully appreciate the need for the club to generate cash following a long period of very limited income caused by the COVID-9 pandemic. But we are very disappointed at the cavalier way the club has launched the new season ticket without any official discussions with supporter groups. Sadly, it smacks of a lack of respect for fans.

“If the club had talked to us we might have been able to resolve some of the genuine concerns raised by our members and other supporters about this offer.

“There are so many questions that need answering. Why is the club not offering refunds if matches are played behind closed doors or if there are reduced attendance matches which supporters are unable to attend?

“The offer of streaming against no refund is not good enough and very poor value for supporters. The no refund offer  would seriously impact on families in particular, potentially costing them hundreds of pounds, if a number of games are behind closed doors.

“It is quite possible that full crowds may not return until 2021, yet the club is not offering refunds.

“There are also serious questions that need resolution including how the seating would work in the event of reduced attendances, about fans being allowed to sit together as normal and who exactly the opportunity to defer season tickets until 2021-22 applies to. Does it apply to only those who are shielding under government instructions  or other supporters that feel vulnerable?”

Safe Standing and Cardiff City

John Darch of the Safe Standing Campaign Group looks at the possibility of safe standing at the Cardiff City Stadium.

 Cardiff City are pioneers of safe standing. The club was the first in the UK to draw up a crowd management plan to enable fans to stand safely in an all-seater ground. That was in 2012 and for the last eight years, as you know, the Canton Stand has been operated as a de-facto standing area. Now a new chapter is about to begin.

Back in 2012, changing how such areas are managed was all that clubs could do to make standing fans safer. Since November 2018, they have also been able to enhance safety in areas of persistent standing by fitting rail seats or independent barriers behind existing seats.

The first clubs subject to the all-seater policy to do this were Spurs and Wolves. Recently Manchester United announced their intention to follow suit. Despite being able to make these structural changes, clubs are still not allowed to officially operate the areas concerned as standing.

Thatis set to change. The Westminster government is now committed to working “with fans and clubs to introduce safe standing” and this month will receive an important report from the Sports Ground Safety Authority.

 In January the authority stated that rail seats have a “positive impact on spectator safety” and assuming that their final report confirms this, many observers believe that this will give ministers in London the evidence they need to change the legislation. As No. 10 may well feel that announcing safe standing would go down well with voters, it could then happen very quickly.

Once areas such as the Canton Stand can be operated as official standing, new rules are likely to apply, i.e. the rules for standing areas, not for seated areas where fans happen to stand. This could mean a requirement for rail seats (or independent barriers), a requirement that seats in any standing area are “non-climbable” (as all structures on a terrace must be) and potentially that the seats must be locked upright to prevent fans standing on them and getting hurt if they fall off.

So the end of the standing ban is in sight. For all fans of clubs with all-seater grounds that has to be good news.

For pioneering Cardiff City it may also mean a bit of a rethink in the Canton Stand, as it changes from an area of seating where fans stand to an area of standing governed by the safety regulations that will then apply.

Kicking On – What Next For Football

Our Trust Chair, Keith Morgan, outlined the difficulties facing all EFL clubs as they try to rebuild after lockdown. The cases of Bury and Wigan particularly should ring alarm bells throughout the game of football.

Cardiff Trust Board member and former Vice Chair of Supporters Direct, Tim Hartley, suggests some positive ways forward to ensuring clubs do not go out of business.

They say you must speculate to accumulate but as anyone with a credit card knows extending yourself too far is a one way ticket to financial disaster. And with hyper inflated transfer fees and eye watering players’ wages that is exactly what football seems to have been doing. We all want success but would you risk betting the actual existence of Cardiff City on the slim chance of promotion?

Football finance has become a law unto itself and the authorities who allegedly control the game have lost their grip on who buys, manages and safeguards the game. For years Supporters Direct and the Football Supporters Association (FSA) have warned that there was a crisis looming and what we have seen at Bury, Bolton and Wigan has proved them right.

The problem is the lack of desire on behalf of the FA, PL and EFL to properly regulate the game. As we in Cardiff know anyone it seems can buy a football club and then do what they want with it. Supporters groups (including the Cardiff City Supporters Trust) have given evidence to a number of parliamentary inquiries to try to improve the way the game is run.They joined the government task force on football and helped ensure structured relationships between clubs and supporter trusts are now mandatory. All this was agreed with the FA and the leagues.

It’s now time to go deeper into the underlying problems and ensure that the business side of the game is properly regulated. Following yet another inquiry the Digital, Culture, Media & Sport (DCMS) Committee last year recommended a raft of proposals to improve the regulation of football clubs and prevent them from falling into crisis.

Chair of the Committee Damian Collins MP said: “We believe decisive action is now needed from the football authorities to ensure that clubs are complying fully with the EFL’s football finance rules and regulations.A failure to enforce these rules effectively will see more clubs entering administration and at risk of expulsion from the Football League.”

The FSA submitted written proposals which focused on the creation of a robust, independent regulator under the auspices of the FA. Football’s self-regulatory regime contributed to the demise of Bury FC and a lack of action could put more clubs at risk in future.

The Committee agreed and backed a number of FSA ideas on protecting club and strengthening the owners’ and directors’ test – and more. The recommendations include:

  • The FA, EFL and Premier League should establish a supporters’ ombudsman to hear concerns about how clubs are being run
  • A reformed Owners and Directors Test should be brought in to disqualify a buyer with a record of corporate insolvency
  • Clubs should be banned from borrowing against fixed assets such as stadiums, other than for related capital projects
  • There should be a formal and enforceable licensing system for professional football clubs in the English league system, as recommended in the 2011 report on Football Governance
  • Government legislation for independent system of football licensing and regulationshouod be brought in if the reforms are not implemented.

The message to the footballing authorities from supporters and MPs is very simple, change or be changed. Let’s hope the government at last listens to us.

Football’s Future And Covid-19 – Trust Chair Writes

Trust chair Keith Morgan

Trust chair Keith Morgan writes in a personal capacity in two discussion papers about collapse of Wigan into Administration and football finance post Covid-19. Keith is a Chartered Accountant and Licenced Insolvency Practitioner with a specialism in football finance. 

Wigan Athletic FC Administration – How did it happen and what happens next?

How did it happen?

After several years without any financial failures of EFL clubs, we recently have had the failures of Bury, Bolton and now Wigan.

Wigan, like the vast majority of EFL clubs, will undoubtedly have been badly affected by the sudden loss of income arising from the three month shutdown of the game due to the Coronavirus pandemic but in their case there remain some unanswered questions as to why they find themselves in such a predicament.

When long-time owner of the club David Whelan sold it in 2018 to a Chinese-backed consortium , he almost certainly did so in the firm belief that their promised access to very substantial new funds was in the best interests of the club and would enable its long term future to be more secure.

The sale would have had to have received the approval of the EFL under their new Owner and Director tests. They are supposed to receive verified evidence that any new owner and any directors those owners appoint to the club have both the necessary funding and experience of running a football club needed to keep the club going for at least a future full season of activity. How they made that decision, and what expertise they brought to the decision making process, is not in the public domain.

Then, very recently the owners who bought from David Whelan, themselves sold on the club to another consortium (in which the consortium owner also had a material financial stake). That deal should also have been reviewed and approved by the EFL yet, within a month or so, Wigan Athletic FC is placed in Administration.

For several years the Football Supporters’ Association and its predecessors Supporters Direct and Football Supporters’ Federation (in which Cardiff City Supporters’ Trust have long played a part), have been pressing the football authorities and the UK government to tighten up and improve the tests on new owners and directors. There have been promises to do so, but the Wigan example suggests they have yet to implement any such improved procedures. The need for change has, therefore, become even more pressing and I am sure that FSA will continue to champion the issue before any club suffers from the same problem of lack of EFL control procedures.

What happens next?

Wigan Athletic FC is now in Administration and under the control of insolvency practitioner firm BegbiesTraynor.  Administration is, in itself, not a financial solution. It merely protects the company from being wound up through the courts and put into liquidation, from having its assets seized by creditors such as finance companies, landlords etc. Without court approval, The Administrator’s job is to find a buyer for the club’s business, who can inject enough new money into the club to pay off the creditors it needs to under the EFL insolvency rules, and ensures its future financial viability.

Those creditors will include paying off in full or adopting liability for, creditors who have secured charges over assets and also paying off in full football creditors (unpaid salaries, transfer fees etc). In addition, other unsecured creditors need to be paid off at least 25p in £ of the debts due to them and financial projections prepared proving that any new owner can fund the business going forward ( hopefully tested far better than in Wigan’s previous sale).

The fact that the 12 point deduction Wigan will suffer because of Administration is highly likely to get them relegated to League 1 risks making them a less attractive buy for new owners under the above cost adoption restraints. If Wigan end up relegated even before the 12 point deduction, then the 12 point deduction will be imposed at the start of next season rather than 2019-20.

Covid-19 – Impact on Football Club Finances

Who has suffered the most?

For Premier League clubs, match day income from walk up crowds, catering etc. represents a relatively small percentage of their total income. Much of their money derives from TV and other media deals, which are still in place and their sponsors, are still getting exposure for their products through this media so there is little income lost from this source. Even for matchday income, a high proportion of this income comes from season ticket sales most of which will probably not need to be refunded (access to club TV etc).There will be some loss of income from catering contracts where their contractors are not able to make sales, so will look for refunds on their agreements but overall adverse financial impact will be relatively low.

League1 and League 2 clubs rely far more heavily on match day income from walk-up crowds as their media income is only a very small percentage of that of Premier League clubs and even many Championship clubs and they tend to have a far lower ratio of season ticket holders to total match attendees. They will have been likely to put more staff on furlough to reduce costs and, of course, this government support will be reduced very soon and end by the end of October under currently announced plans.

Redundancies and other cost savings appear inevitable and even that may not be enough to save some clubs from financial failure unless they can raise money from new investors, crowdfunding schemes etc. I would not be surprised to see a number of clubs at this level seeking the remedy of Administration or other creditor payment arrangements to save themselves.

Championship club impact is likely to be a bit of a mixed bag. A number of clubs, like Cardiff City, are in receipt of “parachute payments” to help their finances but some of those clubs (not us) might just have spent that additional money on new players in an attempt to boost their promotion prospects.

 Those clubs that don’t have that “bonus” source of income are likely to be in a more precarious financial position as again match day income represents a high level of their total income and many clubs don`t have high levels of season ticket holder money in hand. Most, if not all clubs at this level, will have put non-playing staff on furlough but this is due to end soon and in any case their wage cost tends to be only a small proportion of their total wage bill. Reports suggest that most players at clubs have only agreed a deferment of their wages rather than a permanent reduction, so those costs are just a “kicking the can down the road” exercise rather than a cost saving going forward.

In summary, clubs across the board face a financial difficulty arising from the Covid -19 shutdown but some are far better able to cope with it than others.

An encouraging statement as far as our club is concerned came from the Chair Mehmet Dalman recently. He was quoted as saying that whilst Cardiff City  fans should not be looking to the club to spend much on improving the club playing squad going forward, the club is in a more stable financial position than some of our Championship rivals.

Cardiff City Ticket Refunds: Trust Chair Comments

Trust chair Keith Morgan

With the remaining matches of the campaign set to be played behind closed doors, Cardiff City yesterday published their plans for existing 19/20 season tickets holders.

Commenting on the club announcement, Trust chair Keith Morgan said: “We’re pleased that Cardiff City has published the details of its proposals for season ticket holders and match ticket purchasers for the 2019-20 season.

“It appears from information received from the Football Supporters Association that there is no collective approach to this issue by Championship clubs with options varying club by club.

“However, if any of our members are unhappy at the options outlined by the club, we will put grievances directly to the club’s chief executive officer on their behalf. Members should email if they have an issue they would like us to raise.

“In addition, we will be seeking clarification from the club about what the loss of season ticket status and its benefits means for those fans who seek a cash refund. Would a “loss of status” apply for the rest of this season or next season when, for instance, there are usually early bird discounts on season tickets. Some fans may need a cash refund because of the impact of the coronavirus crisis on their family income.”