There was a thread on one of the messageboards yesterday which led to me checking the club’s latest accounts (up to 31/5/11) for clarification of our wage bill and turnover. While doing so, I came across some figures for the period which struck me as being unbelievably high and so I resolved to do some further digging. The figure appeared under the heading “Administrative Expenses” in the Group profit and loss account (which is on page 7 for anyone who has access to the accounts) and is for the period ending 31/5/10 – it’s reported as being £8,870,000.
Being a bit of a numbskull when it comes to finance and accounting, I thought it best to find out what exactly is meant by “Administrative expenses” in this context and found this explanation. From here, I decided to obtain club accounts going back as far as I could from Companies House to find out how much we had been spending under this category down the years. Ideally, it would have been possible to compare pre Sam Hammam figures with the ones from since he became involved with the club, but as a new company was formed in 2000/01, now called Cardiff City Football Club (Holdings) Limited, which has been used to show the group accounts since then, I couldn’t find any info prior to 2000.
I should also say that there are a few things which raise questions about the accounts down the years. For example, the Admin expenses figure for a particular season varies from one year to the next – I suppose this could be explained by errors coming to light later on, which would tend to suggest that the retrospective figures (i.e. the 2004 figure shown in the 2005 accounts for comparison purposes) is the more accurate one, but I have included both figures shown where this happens. Also, one of the first things which you read in the 00/01 Accounts is the following;-
“The company was incorporated on 1 August 2000.
The company changed it’s name from Ferwood Limited to Ferwood Holdings Limited on 18 April 2000.”
Now, I don’t think you need to have worked in Companies House (as I have done) to spot the mistake there. A limited company cannot change it’s name before it is incorporated because it doesn’t exist until it’s incorporation date. It seems pretty obvious that 18 April 2000 should read 18 April 2001 and you have to wonder as to the accuracy of some elements of the documents if they can be signed off while containing such a basic error.
Anyway, here are the yearly Admin expenses figures for the period 2000 to 2011
year ending 31/5/01 (whilst in today’s League Two) = £889,727
y/e 31/5/02 (in League One) = £1,543,090
y/e 31/5/03 (in League One) = £1,917,819
y/e 31/5/04 (in Championship) = £2,537841 (however the figure for this period is shown as £5,324,229 in the accounts for y/e 31/5/05)
y/e 31/5/05 (in Championship) = £5,266,234
y/e 31/5/06 (in Championship) = £3,089,826
y/e 31/5/07 (in Championship) = £5,705,544
y/e 31/5/08 (in Championship) = £4,111,257
y/e 31/5/09 (in Championship)= £4,974,425
y/e 31/5/10 (in Championship) = £8,870,000
y/e 31/5/11 (in Championship) = £6,169,000
Just a couple of general observations – first a figure of nearly £900,000 in Admin expenses for a club in the basement seems an awful lot now, let alone eleven years ago and, secondly, you can see the drop in 05/06 when the club went on a economic kick during Peter Ridsdale’s first full season, but, apart from last year, the general trend is undoubtedly upwards and it could be argued they reflect the “Premiership or bust” approach which, I believe, has existed at Cardiff City since the middle of the last decade.
Now, I have my own opinion of these figures and, when I first saw them, my instinct was to write about the disgraceful over spending at the club with too many people too willing to say “stick it on the slate” (I’m currently working my way through my catalogue of Minder DVD’s!). However, on reflection, I do not have the expertise to go making accusations like that because it might be that these figures are perfectly reasonable and respectable when you take into account things like the move to a new ground and the legal costs the club has incurred in fighting actions bought by Langston and HMRC, so, I’ll just put the figures out there for general discussion and the opinions of people better equipped to interpret them than me.
What I must say though is that if you use the more logical, to me at least, criteria of applying the later figure where two are given, the total for Admin expenses since Sam Hammam took over is £48,830,258. Make of that what you will, but with Vincent Tan talking about having put something like £20 million into the club throughout 11/12, I don’t see any reason for the upward trend to change with the Admin expenses figure since August 2000 going well past the £50 million mark when this year’s accounts are released.