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Trust chair Keith Morgan, a football finance expert,  writes to members in the wake of the reported interest of a Gareth Bale fronted consortium in buying at least a share in Cardiff City FC.

There has been considerable discussion on social media recently about a bid to acquire Cardiff City FC from current owner Vincent Tan. The situation seems to be somewhat confusing but the actual position appears to be as follows:

Claims that an actual bid by a US based consortium has been made are a bit misleading. As a result of a conversation the Trust has had with the club at board level it seems that no formal bid has been made for the club to consider. Rather, a notice of intention to make such an offer was delivered direct to owner Vincent Tan who seems to have had little interest in it and, in the absence of an actual bid, the matter was not progressed further. The board have confirmed that no bid has been received and that one is not anticipated.

In a very recent Sky Sports interview Gareth Bale stated that he would be interested in being involved with a consortium looking to acquire the club but didn’t claim that an actual bid had been made. He said that something might happen in the future but put no timescale on it.

The consortium seem to have to date just started what I would call a “fishing trip”. i.e put some bait on a line to various football clubs (Plymouth Argyle have been mentioned to date but there may have been others) to see if any of them take a “bite” by showing an intent to explore the matter further.

I have taken soundings from some of my former business colleagues in the accountancy world (some of them having football advisory experience) and their view, and one that might be shared by the owner, is that it would be inadvisable to consider a sale of the club at the moment for a number of reasons, including the following

1. As a consequence of last season’s relegation the club’s income from TV/media rights and the solidarity payments through the EFL agreement with the Premier League has dropped by a total of approximately £10m. This obviously impacts on the selling value of the club.
2. The formal hearing in the ongoing legal claim against FC Nantes is due to be held in just a few months time in September with a ruling laid down by the end of this calendar year. If the claim is successful (and there is great optimism that it will) then the club could benefit by many millions of pounds. This would significantly increase the value of the club.

In summary, the position remains uncertain. The Trust will continue to provide updates and commentaries if and when the situation changes

Keith Morgan

Chair

Trust Chair Keith Morgan

Trust Chair Keith Morgan has provided a note to members on financial restrictions in League One

At our AGM on June 19th, I briefly mentioned the different EFL financial restrictions which our club will have to abide by in League 1. So I hope you find this more detailed note useful to understand how different it will be from the restrictions on Championship clubs which applied to us last season.

 In the Championship club annual losses are restricted to an average of £13m a financial year (provided £8m of this is covered by non-refundable cash injections into the club by its owners) over a three year period.

Some adjustments are allowed to the reported loss figure by things like spending on youth and stadium development but this is the “base” figure.Any breach of these limits can lead to transfer embargos or points deductions.

In League 1 and League 2 these profitability restrictions don’t apply. Instead the restriction is based on player wage costs under what is known as Salary Cost Management Protocol (SCMP). League 1 club total player wages costs must not exceed 60% of turnover (55% in League 2). There is no restriction on transfer fees paid, just on wages.

Compliance with the above rules is closely and regularly monitored by the EFL based on projections submitted by the club and if a club looks like it is heading for a breach, then a transfer embargo will be applied until a club becomes compliant again.

The definitions of turnover and player wages are important in the above calculation

1. Turnover would normally just include match day income, commercial sponsorship and TV revenue. It can also include profits from hospitality events as many clubs use their stadium facilities far  more often than on match days.
2. However in League 1 turnover is also allowed to include cash injected by the club owner by way of new non-refundable share capital ( i.e not loans).So an owner can greatly increase the allowable limits of player wages by this method
3. Turnover also will include any profit on player sales, but only when the cash from those sales is actually received – many deals tend to be done on an instalment basis to ease cash flows
4. The wage cost for players loaned out in the season are excluded from the calculation for the period in which they are loaned out.
5. An exclusion from wage costs also applies to players on a professional contract who are  under 21 at the start of a season who  have come through the club`s youth development scheme and have been with the club for three years or more.
6. Cardiff City also have another potential favourable interim wage adjustment as a club that has just been relegated from the Championship. If a player was signed before September 2024 on a contract of over three years then their wage is also excluded. This exception is aimed at protecting relegated clubs from committed longer term contracts entered into before their relegation. I must be honest here and haven’t checked to what extent this will benefit our club, if at all,

I hope this note is useful to understand where we stand as a club on this important issue for next season. Any questions, please raise through the usual Trust channels

City skipper Joe Ralls

The Trust would like to thank Joe Ralls for his enormous contribution to Cardiff City, both on and off the field, over 15 fabulous years.

Fully committed to the cause whenever he played, Joe will always have a special place in the hearts of Bluebirds fans.

His more than 400 appearances for the club  is special in the modern world  of football when many players tend to move between clubs.

We wish Joe all the very best for whatever route he takes in his continuing football career and hope to see him back at the Cardiff City Stadium in the future.

Trust chair Keith Morgan pictured with Rob Phillips and Jason Perry

What a thoroughly entertaining evening we had with Bluebirds legend Jason Perry and ex-BBC Wales commentator, Rob Phillips following the Trust’s AGM.

And it’s fair to say there was a fair amount of disagreement between the two on many of the topics raised at our roadshow at the Cardiff City Stadium.

There were a huge range of issues discussed: from the new manager and structure of the club, through to our prospects in League One and chat about Rubin Colwill and Aaron Ramsey.

Looking back at the previous season, Jason said: “At the start of the season the squad was not good enough. Individually, they are not bad players but it’s about playing as a team. You need certain characters in the dressing room – players like Sol Bamba or Junior Hoilett. Who is there in the present squad?”

He said that as the season proceeded it was “obvious we would be relegated”.

“This club also needs to be pulled together. The only way to do that is to fix the structure. It is all wrong. Who is there to help the head coach (Brian Barry-Murphy).”

Rob Phillips added: “If you were going for form a football club you wouldn’t set it up the way it is here. There needs to be a director of football.”

On the forthcoming League One season, Jason warned: “It is going to be tough. Teams play very differently – some are tippy tappy, others sit back, some go direct. It is going to be relentless and players have to take responsibility.”

Both stressed that it was a big season for Rubin Colwill and both were largely unimpressed by his overall performances last season. Jason argued it would have been beneficial for his development if Rubin had been loaned out, possibly twice . “Unfortunately, he can’t run beyond and can’t last for 90 minutes.”

Jason also pointed to Alex Robertson. “We were told ‘what a player he is’ but he couldn’t get on the ball. We could not stretch teams. We need players to disrupt.”

Both Jason and Rob defended the decision to bring in Aaron Ramsey, even though he was plagued by injury during his two seasons. “In the season before he came to Cardiff he played more games (for Nice) than he had since his Arsenal days. Injuries happen,” said Rob. “Any Championship club would have taken him.”

Rob said that he did not think a takeover of the club was on the horizon. “At the moment Vincent Tan is still very committed and continues to put money into the club.”

Both argued that relegation to League One for the first time for more than 20 years should be a catalyst for a total revamp of the higher echelons of the club and putting in a football structure suitable for 2025 but warned it “might not happen.”

Jason said: “It is difficult to come to evenings like this – I feel it is like rewind and play every season. If you are negative about the club it is because you care. I don’t like searching for negatives and I’m desperate for a great season.”

He said that despite his many concerns about the way the club was structured he would be 100% behind the head coach despite reservations.

Bluebirds legend Jason Perry and former  BBC Wales soccer commentator, Rob Phillips will head up a roadshow after our AGM on Thursday, June 18th.

We’re guessing that there will be plenty to chew over – the new manager and the likely fortunes of the club in League One in 2025-26.

The AGM will take place in the Chairman’s Suite at the Cardiff City Stadium. Doors will open at 6.30pm and the popular chat with Jason and Rob will follow the Trust AGM which starts at 7pm. There is no admission charge.   

NON MEMBERS: You can also join the Trust on the night for just £12 a year. So if you’re interested in signing up as a member, please book your place at members@ccfctrust.org. Come and join us on June 19^th.