Speaking as someone who has occasionally mistakenly believed messageboard gossip to be fact, it is tempting to take the messages that appeared on the Cardiff City.com board yesterday announcing that a deal had been agreed in talks between Peter Ridsdale and Sam Hammam regarding the Langston loan note debt with a large pinch of salt. However, this time the rumours have a whiff of authenticity about them as at least one of the two people making the claims is in pretty regular contact with our current Chairman and our former owner.
So, whilst recognising that there is a fair chance that some people (including myself!) are going to look pretty stupid in a week or so’s time if there isn’t the predicted announcement this week regarding the clearing of the Langston debt, I am going to have a good speculate as to what this could mean to Cardiff City.
The Langston loan note debt was originally for £24 million but interest (at I believe 7%) has been accruing on it since 2007. However, £9 million of that figure would be wiped off straight away if a sponsor for the new ground was found (even if the fee involved in the sponsorship deal was less than £9 million) and the rest of the debt is due to be paid off by various receipts from things such as the Premier seating scheme (it’s pretty certain therefore that the current figure raised in this respect is nowhere near as high as both parties were anticipating) and a further £5 million in the event of us being promoted to the Premiership.
That being the case, you would think that any settlement of the debt would include confirmation of a ground sponsor being found for the club and also news of an investment from an outside party (almost certainly the Malaysian sources that have been represented by Dato Chan Tien Ghee).
One of the people claiming that an agreement has been reached has said that the financial settlement was below the figure currently owed to Langston and my guess would be that, if an agreement has indeed been reached, he is right in saying that.
Given that Peter Ridsdale has said recently that the Langston loan note debt is the biggest single impediment to attracting new investment into the club, then this has to be good news for Cardiff City doesn’t it? On the face of it, that may seem like an idiotic question but there are two things to be borne in mind here;
1. Almost all investment into football clubs these days is in the form of a loan, so if someone has come up with the cash to pay Langston/Hammam off, the likelihood is that the club will have to pay back the full sum (plus interest) – we could just be replacing one debt with another, hopefully smaller, one.
2. There have been pretty persistent rumours doing the rounds recently that Peter Ridsdale has been offered a bonus by Langston/Hammam dependant on the loan note debt being cleared – there has to be a possibility therefore, that any resolution might be good for our Chairman and Langston/Hammam but not so good for the football club.
I would have to say though that even if any settling of the Langston loan note debt doesn’t turn out to be quite the fillip for the club that it would appear to be at first glance, surely it would still leave it in a position where it had more time to pay back any new investor than the current settlement date of no later than 2016 for the Langston debt?
On balance, I think the best way of looking at this situation is to ask yourself if you want the current rumours to turn out to be true or whether you would prefer things to keep on going as they have been. In these sort of positions, I normally preface what I say with the “I can’t speak for others”, but I am pretty sure that the overwhelming majority of City fans would answer option 1 when asked that question – I know I would.
