Weekly review 1/7/12.

Another week where re-branding talk has outweighed football talk I’m afraid, but as I’m now heartily sick of the former, let’s talk about the latter first! The main transfer talk of the week concerned a possible return to the club for Craig Bellamy. Interestingly, having just completed a deal for Jordon Mutch which was an object lesson in how they should be conducted in that nobody knew about it until it was being announced on the club’s website, City were prepared to let their apparent interest in the Liverpool player become known to all – at least that’s what this piece suggests.

Now, initially, the cynic in me thought this was just a way of the club trying to divert attention away from the re-branding which has had, at national level at least, a very poor reception from the media, but I now tend to think that there might be something to it and so what are the chances of Bellamy making a second move to Cardiff – presumably, on a permanent basis this time? Well, speaking as someone who was always optimistic that he would play for us in the weeks before his loan move from Man City in 2010 was conformed, I’m not so sure this time. I’m not one of those people who talk about him being too big a risk because of his age and his dodgy knees – I’d like Bellamy back because I think he would combine very well with the sort of characters we have in the dressing room now and I believe he could be more effective than he was in 2010/11, but we were able to get him back then because his parent club agreed to pay the large majority of his wages. We’d have to do that ourselves this time, and, even if he was willing to take a big pay cut, Bellamy would still almost certainly be the highest paid player at the club by a distance – presumably, with a year on his contract at Anfield left, Liverpool would want a pretty big fee for him as well.

If push comes to shove, I think if we do have the sort of money available which means we can realistically consider a move for Craig Bellamy, then it would be best spent elsewhere. People keep on talking about us making a “marquee” signing which the club would try to use to take attention away from other matters though and he would certainly fit that bill – I suppose it’s a case of watch this space. Definitely not coming here is Paul Dixon, the former Dundee United full back who I mentioned a few weeks back and Watford’s Stephen McGinn, who had been rumoured to be the latest employee from that club to follow Malky Mackay down the M4 to South Wales but has indicated that this will not be happening.

Dixon has signed for Huddersfield and our first opponents in the new league season have been pretty busy over the last few days adding to their squad. The fact that we have not done so in the week prior to the day when so many player’s contracts run out is a bit disappointing when you consider the good use we made of the Bosman free transfer market last year, but the Mutch transfer shows that it is possible for things to be done differently from what, sadly, has become the norm at Cardiff down the years and, just because we haven’t signed any Bosman’s yet, apart from Joe Lewis, it shouldn’t be taken as meaning that we won’t be doing so. On that score, I should say that, having given Head of Recruitment Iain Moody some gentle stick on here this summer, if he can keep out of the spotlight while still bringing in quality signings like Jordon Mutch, then there’ll be no complaints from me.

Swapping one shade of red for another? Could Craig Bellamy be making a return to Cardiff in 2012/13?

Well, I’ve padded out the transfer talk for as long as I can, but now I’m going to have to say let’s move on to re-branding! A meeting was held on Wednesday between representatives of the club (including Malky Mackay) and thirty fans who were requesting a refund on their season ticket because of the changes to kit and badge imposed on us for the new season. Now, credit to the club I suppose for being willing to listen to the complaints of those present, but if I was looking to explain the meaning of  the term “exercise in futility” to a child, I don’t think I could do much better than give this meeting as an example. Short of announcing  a third change of mind that saw us go back to playing in blue next season, I can’t think of anything the club could have said which would appease that group of fans who feel so strongly about this issue.

As for what was said, this article from one of those attending describes that in great detail. It’s a good, well written, report in my opinion, but, understandably given the strong emotions the subject engenders in many, personal feelings  are evident which only serve to make the club look more incompetent and amateurish at a time when they were doing a pretty good job of doing that anyway! I must emphasise here that I’m not having a go at the writer of that blog piece, just emphasising my bafflement as to what the club could possibly have hoped to gain from the exercise. To be fair, to those present representing the City, they were charged with “defending the indefensible” in the eyes of an awful lot of fans.  I should say here that, in my opinion, this doesn’t just mean those who are completely anti red. I’m guessing very many in what has become known as the reluctant red camp feel the same way – there have never been many, if any, who have expressed a preference for playing in red instead of blue (certainly not in any scenario which didn’t involve the investment which is supposed to come with the change of kit).

To my mind, the only important new information to emerge from the meeting was the details of the offer made to Langston through Sam Hammam for settling the loan note debt which has dogged the club for the last seven years. At the meetings I attended at the club in early May, Alan Whiteley was a lot more confident about a settlement (I’m pretty sure that the word “imminent” was used) – obviously, something has happened to change things since then and there are those who suggest that the “goalposts have been moved” in terms put to Sam Hammam. I can’t comment on that because there was no discussion on size and terms of any offer made to Langston at those meetings nearly two months ago, but, in the manner we’ve become used to from our former owner, he has indicated his unwillingness to agree to any of the three options offered by the club in the form of comments made by one of what have become known as his inner circle in the local press.

Now, with Vincent Tan indicating in his statement on the club’s website recently that £10 million had been put aside for settling the Langston debt, my first reaction was to ask why this could not all be offered in one go, but, one of the beauties of  the Internet is that it is such a great learning tool and threads like this very good one on the City messageboard I use can often show you that things aren’t quite as simple as you think they are. It’s become increasingly clear that, if it happens, any conversion of Vincent Tan’s debt into equity will not occur until the Langston debt has been settled. Speaking as someone whose reluctant red status is founded on the prospect offered that we can become virtually debt free if things work out as explained in those meetings in May, this is disappointing news. However, it appears that we are in another one of those poker game situations that City fans have become all too familiar over the past six years or so as their club’s future is decided by it’s power brokers. Te common denominator in all of these situations is the man who we were told back in 2006 would be walking away from the club never to return – you know the one, that bloke whose madcap spending in the early years of the new millennium got us in this mess in the first place!

One last bit of good news to finish. Yesterday it was announced that Cardiff City Stadium will host the 2014 UEFA Super Cup. Although the credit for this happening would appear to lie more with the Welsh FA rather than Cardiff City, it’s still is an excellent opportunity to increase the profile of the club – whether many locals ever get to see the game is a matter for debate mind, because it would appear that once the supporters of both clubs and the UEFA big wigs get their allocation of tickets, there won’t be too many left for anyone else.

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Cardiff City turnover and wages figures 2000 to 2011.

The piece on our Admin expenses costs I did yesterday provoked some comment on the messageboard I posted it on (more on that later), but I accept that it is hard to put the figures into context without more information, so I’m going to add our wage costs and turnover for the same period to the equation in this piece to try and get a better understanding of what has been happening at our club over the past eleven years.

I’m using the “wages and salaries” figure shown under the heading Staff numbers and costs in the accounts;-

y/e 31/5/01 (what is now League 2) = £3,319,876

As for turnover, the figure comes from the Consolidated profit and loss account for the period covered;-

y/e 31/5/01 = £2,754,367

% of wages to turnover = 120%

 

y/e 31/5/02 (what is now League 1) 

wages = £6,043,479

turnover = £6,317,032

% of wages to turnover = 96%

 

y/e 31/5/03 (what is now League 1)

wages = £8,390,416

turnover = £7,252,029

% of wages to turnover = 116%

 

y/e 31/5/04 (what is now the Championship)

wages = £9,781,123

turnover = £9,550,781

% of wages to turnover = 102%

 

y/e 31/5/05 (what is now the Championship)

wages (from this year “social security costs” and “other pension costs” appeared in the accounts, so the figure I give from now will include them) = £10,569,727

turnover = £8,182,419

% of wages to turnover = 129%

 

y/e 31/5/06 (what is now the Championship) – Peter Ridsdale arrives 

wages = £8,087,739

turnover = £8,008568

% of wages to turnover = 101%

N.B. There was also a payment of £201,745 to W H Sports Group for “consultancy services”

 

y/e 31/5/07 (what is now the Championship) – Sam Hammam leaves 

wages = £9,616,754

turnover = £10,677,459

% of wages to turnover = 90%

N.B. There was also a payment of £534,490 to W H Sports Group for “consultancy services” and there was a bonus of £500,000 paid to Peter Ridsdale for his work in getting the new ground approved and reducing the Langston loan note debt.

 

y/e 31/5/08 (what is now the Championship) – FA Cup Final appearance

wages=£13,367,769

turnover=£12,779,029

% of wages to turnover = 105%

N.B. There was a payment of £325,000 to W H Sports Group for “consultancy services”, also, the “highest paid director received £204,000 during the year”.

 

y/e 31/5/09 (what is now the Championship) – Club leaves Ninian Park at end of period 

wages =£13,487,145

turnover = £10,400,966

% of wages to turnover = 130%

N.B. There was a payment of £325,000 to W H Sports Group for “consultancy services”, also, the “highest paid director received £400,000 during the year”.

 

y/e 31/5/10 (what is now the Championship) – Club’s first season at Cardiff City Stadium, Peter Ridsdale leaves and Malaysian investors arrive at end of period

wages =£16,750,000

turnover =£16,973,000

% of wages to turnover = 99%

N.B. There was a total of £899,000 paid in Director’s remunerations – the “highest paid director received £350,000 during the year excluding compensation for loss of office” (that compensation is given as £172,000 elsewhere in the accounts).

 

y/e 31/5/11 (what is now the Championship)

wages = £15,762,000

turnover = £15,947,000

% of wages to turnover = 99%

Cardiff City Stadium has not proved to be the financial cure all that it’s advocates in City Boardrooms from 2001 to 2008 claimed it would be.


So, my understanding of the Football Leagues Financial Fair Play Rules  (I’ll be happy to be corrected if I’ve got this wrong) is that we would have been liable to sanctions under them for each of the seasons listed.

Although I again don’t intend to go into much analytical detail about these figures because I don’t have the expertise required  to do that well enough,  I’d argue that they do support my opinion that the damage was really done in the years 2000-2004.  Effectively, we’ve been paying for ridiculous spending seen in the years before we got to the Championship – I’d say the extent to which we are being dragged down by the Langston debt can be seen by the figures for y/e 31/5/06 when a genuine effort to cut costs took place in the aftermath of black Friday and we still ended up with wage costs  above our turnover.

I’d just like to return to the Admin expenses figures I referred to yesterday now to show them as a percentage of annual turnover;-

2001 = 32%

2002 = 24%

2003 = 26%

2004 = 55%

2005 = 64%

2006 = 39%

2007 = 53%

2008 = 32%

2009 = 57%

2010 = 52%

2011 = 38%

I’m grateful to Keith Morgan (Since 62) for providing those figures from 2006 onwards. Keith, who is just about the most respected City fan posting on messageboards when it comes to the club’s finances, provided some analysis of the figures he had come up with in the messageboard thread created to discuss the findings in my piece yesterday by saying

” So wide fluctuations , even though admin expenses should normally not go up in line with turnover (you would usually expect things like admin and ground staff costs to remain fairly constant).
It may be that business rates on the new stadium are higher than Ninian Park , but I would expect ground maintenance costs to be lower even in a bigger stadium as it is so new.
One of the costs included in admin. would be the huge costs (about £500k)of defending the Langston Summary Judgement claim as the judge only awarded costs against Langston of less than £100k.”

Keith also stated that the very high Admin expenses figure in y/e 31/5/10 could be, partially, explained by the appointment of two “acquaintances” of Peter Ridsdale as stadium manager (we already had one!) and press officer respectively.

The last eleven years have been very exciting ones on the pitch for City fans (the best times I’ve seen supporting the club), but, for me, the club’s accounts for that period show that there has been a price to pay and with, each passing year, that price, potentially at least, gets higher and higher. We are lucky in that Vincent Tan may offer a way for us to break free of the financial strictures which have dogged the club for so long because he has the wealth to do so. However, I believe it’s fair to say that, even amongst those supporters who are prepared to accept the change of kit which has been imposed on us, there is a feeling that we are moving towards a truly decisive period in Cardiff City’s recent history and there is certainly no guarantee of a happy ending – a decade or more of being a footballing basket case in the financial sense may be coming home to roost.

 

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