Cardif City's Business Strategy

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Cardif City's Business Strategy

Postby saladthedragon » Thu Dec 31, 2009 4:38 pm

Just a bit of a follow up from a few different threads guys! Seems more relevant now given whats going on. It is pretty long, there are 2 parts to it, and is not an exact science as I state many times, but the feedback I have had is the mistakes tend to even themselves out and whether by hook or crook, comes to a close estimate both in terms of turnover and expenditure. I will post the second part as the first reply. It was written back in June 09.

There has been much debate and conflicting opinion in the light of Peter Ridsdale’s seemingly failed personal business venture coming in to the public domain, but of far greater concern to me and many City fans is what, if any, are the implications for Cardiff City?

Personally, before I begin to lay out a mixture of background information, facts and later opinion, I would like to say that for me, Peter Ridsdale has been an excellent front man for us, while his contacts and savvy media/ PR skills have clearly taken the club forward on many fronts. Also, while some disagree that Peter was primarily responsible for the stadium being built, ultimately it happened on his watch, so for that, I and us should be eternally grateful. Without it, there would almost certainly be no Cardiff City, something that should be a sobering thought for us all. As for some of the criticism that comes Peter’s way at times, it is much like praising Terry Burton for the positives on the football front, which many do, but as soon as things go wrong its all Dave Jones fault with Burton absolved from all blame! Well the same applies at boardroom level, if things go right it’s often down to fans favourite Steve Borley, anything bad and its all Ridsdale’s fault! While of course that is not right, it works both ways too as there is certainly reluctance in both Dave Jones and Peter Ridsdale to accept criticism for any mistakes they do make. For me, though, both have done much more good than bad.

Now, while whatever happens to W H Sports will not directly affect Cardiff City in any shape or form, if some of the things documented about the scenario are true, then it certainly raises questions as to Peter’s ability to be Chairman of Cardiff City. Allied with the well documented Leeds escapade and lesser known exploits at Barnsley that almost led to them being liquidated, it is not the foundation to have much confidence in his financial acumen. The following is from probably the most universally acclaimed contributor on finance regarding Cardiff City;

“Sorry I have come to this story late, but have been working away and only became aware of the newspaper accusations and Peter Ridsdale`s denials and counterclaims by way of text messages from a regular poster on here.

In order to be fair to Peter Ridsdale - his explanation that it was just a technical liquidation because the company had served its purpose and was no longer trading and his suggestion that it was therefore a solvent liquidation (known as an MVL) was on the face of it feasible - I thought it was best to do a bit of research first before posting my comments.

Having initially given Peter the benefit of the doubt over this, unfortunately it would appear that yet again what he says does not quite correspond with the facts of the matter which are as follows:-

1) On 22 April 2009, as a shareholder of WH Sports Group Limited (company number 4741357), he signed resolutions putting the company into liquidation and appointing an insolvency practitioner (Ian Frances of Conduit St London) to be its liquidator.

2) By itself, the above document could still mean that the company was solvent and was just being wound up (as Peter is suggesting) as it had ceased to have a reason to exist now that he had become a direct employee of CCFC. To be a solvent liquidation, Peter would then have followed up these resolutions by filing what is known as a Declaration of Solvency. Such a document is a sworn document clearly showing that the company has more assets than liabilities and that all known creditors have either been paid off in full or will be within 12 months.

3) However, on the same day Peter and his wife signed a SWORN AFFADAVIT in front of a solicitor, stating that an enclosed Statement of Affairs for the company was a "full, true and complete" statement, that statement showed the company to be heavily INSOLVENT - i.e. it hadn’t been wound up at all on the basis Peter is claiming.


4) The assets shown in the Statement of affairs are an overdrawn director’s loan account of £2,592 (i.e. Peter owed his own company) and cash at bank of £20,000. Total assets of £22,592.

5) The liabilities shown in the statement total £409,900, which gives the shortfall of £387,408 referred to in the NOW article. These liabilities are broken down as follows:-

Trade and expense creditors £9,900
Barclays Bank £26,445
HMRC -Corporation tax £146,663
-PAYE/NI £111,253
- VAT £115,639

6) The £9,900 is made up of £6,900 due to the company’s accountants (Scodie Deyong )in unpaid fees and £3,000 due to Companies House in respect of fines for late filing of the company’s accounts (a level of fine only levied if there have been persistent and serious filing breaches).

7) Peter’s personal investment into WH Sports is limited to only £50, which is the shares he bought in it (his wife has the same amount).

Quite clearly from the above, Peter has been at best "economical with the truth.” It is NOT a liquidation just to bring the company to a neat and tidy end, but an insolvent one where substantial debts are owed, particularly to HMRC.

From his own sworn statement, his company appears to have failed to pay over the V.A.T. it charged CCFC on its consultancy fees, failed to pay over Corporation Tax on the profits deriving from those fees, and failed to pay over PAYE/NI properly deductible from the salaries he paid himself and his wife out of the company (most of the cash from the fees appears to have been paid out to them as there is only £20,000 left in the company bank account and it received over £700k from CCFC in cash).

In addition, the company appears to have breached accounts filing rules and not paid its accountants. It also has a Barclays Bank debt for reasons unknown (why would the company have to borrow money when it had substantial income and only directors` pay as a major cost?).

Overall , the position of WH Sports Group Ltd looks far from clever financially and not at all in line with Peter’s interpretation of events. And that’s not just my opinion, but based on the contents of documents he signed and legally swore himself - not newspaper gossip.

My confidence in Peter’s ability to properly financially manage a company is diminishing by the day and that confidence wasn’t very high in the first place.”

While I am not remotely qualified to give a specific opinion on the technicalities documented above as much of this techno-financial-gobbledygook flies over my head, it also needs to be pointed out that other contributors, who also clearly have an innate knowledge of financial matters, do not believe it is necessarily in damnation of Ridsdale. The only opinion I could offer having read both sides of the story, is only time will tell whether something dodgy is going on or if Peter is genuine in what he says, but it certainly isn’t flattering as it stands. Ultimately, the above incident on its own would be of mild concern only, but unfortunately, there is a culminative effect of unsavoury incidents linked to Ridsdale building up, be it rightly or wrongly. Assuming that everyone is well aware of the catastrophic events at Leeds United, let us now concentrate on matters regarding specifically Cardiff City.

The following are figures regarding Cardiff City’s finances since 2001. I will concentrate on the main figures of Turnover, Wages, Operating Profit (before transfers) and Overall Balance. For info, Peter Ridsdale took over as Chairman from Sam Hammam in 2006. I would also like to point out that as I am writing this article, I have made no definitive opinion of how well positioned we are and will form an opinion as we progress with the available information. The figures also incorporate the stadium and holding companies of Cardiff City, namely Cardiff City Football Club (Holdings) Limited.

Year Turnover Wages Operating Profit Overall Balance
2001 £2.9m £3.3m -£3m -£3.9m
2002 £6.3m £6m -£4.9m -£9m
2003 £7.3m £8.4m -£7.8m -£17m
2004 £9.4m £9.8m -£9.1m -£26.2m
2005 £8.2m £10.6m -£9.9m -£28.2m
2006 £8m £8.1m -£5.7m -£27.1m
2007 £10.7m £9.6m -£5.5m -£31.8m
2008 £12.8m £13.4m -£8.4m -£32.8m

Now a friend of mine who is in the financial industry and completely impartial, surprisingly told me he doesn’t think the figures are that bad. Due to the new stadium being built, it allegedly makes the balance sheet, taking assets such as the new stadium and training facilities into account, quite promising. The pragmatist and cynic in me, though, would suggest that balance sheets and so forth can be somewhat manipulated to make things look far better than they actually are, as institutionalised companies such as Fannie Mae, Lehman Brothers and indeed our previously perceived impervious banking companies well publicised fall from grace due to the Credit Crunch would point to. Just as the aforementioned were not exempt from the fundamental basic principles of sound fiscal management, we would be naive in the extreme to believe that Football Clubs are just because that’s what we want to believe.

Another positive is since 2004, the overall debt, although still growing, has slowed considerably, especially since Peter became involved. £9m is also due to be wiped off the debt with the naming rights to the new stadium, which is a fantastic deal for Cardiff City. In truth, the deal is better than fantastic as the naming rights will not even fetch, in all likelihood, anywhere near £1m, let alone £9m, but £9m nonetheless still comes off our debt to Langston. Whoever negotiated that deal, and chances are it was almost certainly Peter, it was a phenomenal piece of business. It goes some way to negating, or at least considerably lessening, the impact of what in mine and many others opinion was the shambolic handling of the Ramsey transfer.

It also goes without saying that the new stadium will provide an increase in turnover, by how much are speculative estimates, but around £1-2m per annum or so would be a rough guess. However, this will be tempered by the fact the club made around £2-3m from reaching the F A Cup Final in 2008, something that can clearly not be budgeted for, and as such actual turnover is not likely to improve much or even at all from last year’s figures as a result. Cardiff Blues will contribute around £750,000 a year in rent for using the stadium, while an increase in attendance is all but certain as new stadiums historically generate an increase of around 20% or more. Keeping potential new fans by winning football matches will be the key to future prosperity as the novelty factor will soon wear off if we don’t win football matches. A negative is the poor take up in Premier seats, only around 40% as it stands out of the 2,250 available. With monthly prices starting at over £100 and a signing on fee of around £1,500, you can see how much a full up take would generate. While I despise the corporate infestation of sport, alas, it is undoubtedly a necessary evil and a source of great income.

Now for the negatives. Two things jump out at me straight away, that we consistently make an operating loss (before transfers) of at least £5m and the overall debt is still rising. Another concern is the wage bill consistently being greater than, or occasionally a frighteningly high percentage at best, of our entire turnover. That the debt since 2004 has “only” risen by £4.6m in 4 years is purely down to selling the likes of Chopra, Ramsey, Jerome and others on a yearly basis, while spending very little, if anything, on transfer fees in return. My concern is what happens when the well of saleable assets dries up? Though we are well stocked with Ledley (albeit not for much longer), McCormack and Johnson as highly profitable saleable assets, for me we cannot expect to keep that production line going indefinitely and expect to replace them adequately for peanuts. Were we to simply go one year without being able to make such a profit via transfers, the debt would push very close to £40m. Our youth academy is also one of the most productive in Britain, though again I am concerned should that well run dry. The fairly new rules regarding youngsters only being able to play for clubs within a certain radius of where they live, should serve us very well indeed, but there is always a risk with such things and certainly no guarantees no matter how promising that avenue has been and looks like continuing to be in the future. The chances of our production line of young, local talent continuing is indeed high, but to take it for granted and effectively budget for it would be a grave mistake.

Many also accuse the Club of lacking ambition, but as is documented above, there is absolutely no way on earth we can spend any real money on transfers. Indeed, the club in mine and many others view is actually gambling on gaining promotion by keeping such a high wage bill when it is clearly not sustainable to do so. The club is wholly reliant, and has been for years, on being able to raise at least £5m through net player sales per annum just to cushion the blow of our huge operating losses. Despite doing so, it has often still resulted in us making heavy losses nonetheless.

However, were the club not to invest in a high wage bill, such is the ultra-competitive nature of the Championship, that too brings massive risk, though even then there are no guarantees of success or even survival. In many ways, the Championship is even more of an unbalanced and unfair playing field than the Premiership, with the parachute payments given to relegated Premier League clubs totalling more in itself than our entire turnover, save for last year, at £11m or more. Bearing in mind the relegated clubs will have a far higher turnover than us, not including the additional parachute payments, it’s a clear indication of what we are up against. You also only have to look at the three clubs relegated this year to see how easy it is for the mighty to fall. Norwich, Charlton and Southampton will join Leeds in the third tier of the Football League, with another big club, Leicester, only just coming back up the other way. I truly dread to think what the ramifications of relegation would hold for us.

Unquestionably our greatest assets are the new stadium and training facilities, whilst the playing staff at the moment boasts some very saleable and profitable players too. Ledley, McCormack and Johnson would quite conceivably raise £15m in themselves, while with £9m in naming rights due to come off the debt, that potentially takes £24m off our £32.8m debt, leaving a much more serviceable debt of £8.8m. However, it’s not quite that simple due to the operating losses being a conservative £5m a year which would soon begin to build up the debt again, unless we continually sell players to cover those losses. There is also the big risk of not replacing those players adequately and the unthinkable and catastrophic possible threat of relegation as a result.

It’s quite clear from the figures above that Peter Ridsdale is a high risk, high reward businessman. While I personally manage my finances extremely frugally, never embracing risk and my sole aim being to pay off my mortgage as quickly as possible before I consider indulging in any substantial, extravagant expenditure, I do accept that there can be a need to speculate to accumulate and that sometimes debt, and considerable debt at that, can be a necessary evil for businesses and indeed football clubs. It also needs to be pointed out that it was Sam Hammam who incurred this huge debt, not Ridsdale. Other factors that have to be taken into account are that we are in a much publicised global recession, which brings even more uncertainty and risk to potential income, while such is the insatiable need to get money flowing into the club, we had the ridiculous scenario of having to buy season tickets in December, a full 8-9 months before the season even begins! It led to a somewhat fraudulent slip by my good self when I did buy my ticket to ask, in automatic pilot I stress, do we have the tickets now as we normally do…! As soon as the words left my lips I knew, but the damage was done!

Many are also up in arms as to the wages/ bonuses Peter Ridsdale has picked up from Cardiff City. My personal opinion has always been that while I and around 15,000 others would work for Cardiff City out of pure love for the club, maybe taking a bag of rice as a token gesture to feed the family, people such as Peter are professionals who do it solely for the money, not out of love for the club and we would be naïve to believe otherwise. As such, I don’t care what people take out of the club, as long as they take the club forward and payments made are affordable. While Peter ticks the first box for me, the second is very much down to interpretation, though in his defence, the owners decide his wages, not him.

My final view is pretty much in line with Peter’s thinking himself. I think he has improved the profile of the club beyond all recognition, from major things such as the new stadium and training facilities being completed, to more minor, but vital issues nonetheless such as his handling of the coin incident and turning the club into a far more respectable and family orientated club. Under his and Dave Jones stewardship, we have also had our highest finish in decades and unthinkably been to Wembley twice. Without that incredible achievement, we would still be averaging around 12-13,000 a game, as indeed we were in the F A Cup Final year, as opposed to the 18,000+ this year and probably even bigger next season off the back of that and the new stadium.

For me, though, it all comes back to those figures regarding our accounts. Leeds, Barnsley, and W H Sports are all irrelevant for me, it’s his record at Cardiff that matters, nothing else. Peter has served his purpose in getting things done and improving our image, but the debt is still rising with guarantees of real progress on that front being far from assured. Peter himself said that once the stadium was built, it would probably be time for him to move aside. I think the time has come to thank Peter for all the good he has done, which has been plentiful, but for him to remain in charge of the finances of Cardiff City would be a mistake, one we almost certainly cannot afford to make.
Last edited by saladthedragon on Thu Dec 31, 2009 5:24 pm, edited 2 times in total.
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Cardif City's Business Strategy

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Re: Cardif City's Business Strategy

Postby saladthedragon » Thu Dec 31, 2009 4:38 pm

Some of you will know I have been attempting to ascertain what we can expect our turnover & expenditure to be in the new stadium (which will be from 2010 when the stadium has started generating turnover) amidst Peter’s claims that the new stadium virtually ends our need to sell & make us a viable business proposition. It has been extraordinarily difficult, impossible actually, for me to gauge an accurate figure as to what our turnover & expenditure is likely to be for 2010, the best I can do being calculated estimates. Indeed it would be impossible for even those at the Club to do so accurately. Some of these will be pretty accurate, others will be speculative estimates, though the end figures shouldn’t be too far away. While the figures in the initial thread documenting our current financial situation are 100% accurate, I stress the following are estimates to which I am open to input from those who may be able to do so. I will offer my line of thought & likelihood of accuracy. Turnover first;

Season Ticket sales - 15k @ £330 each = £5m
Walk-up crowd - 5k @ £25 = £2.8m
Premier Club - 1k @ £120 p/month = £1.2m
Programme sales - 5k per match = £350k
Merchandising - £1m
T V Money - £3m
Catering - £500k
Cup Games - £500k
Blues Rent - £750k
Pre-season Friendlies - £500k
Use of stadium - £500k
Sponsorship - £500k
Total = £17m

Season Ticket sales and walk up crowds have not taken concessions into account, though neither has it taken premium prices into account too and erred towards the lower full price to be paid generally, so should be a decent estimate. Also, I’m hoping crowds of 21k would be a slightly conservative estimate too. I have not accounted for the sign-up fee from the Premier Club as this is intended to ascertain regular turnover, not one off payments, besides, that money has already been spent. Programme sales I would guess are also conservative, TV money is about right as is the Blues rent, maybe touching closer to £1m but there or thereabout nonetheless. As for friendlies, 20k tickets alone at £35 makes £700k, so should be about right. My hopefully conservative estimate on that would negate additional expenditure for hosting the games. Merchandising I’m at a loss to estimate with any certainty. Wild guesses here, but 20k fans spending £50 in a year would be £1m perhaps? My extremely conservative estimate might off set the expenditure incurred in producing the merchandise and other costs involved? So too use of stadium, another wild guess, as is catering & sponsorship which includes all kind of sponsorship such as match day, billboards, shirts etc. Peter has mentioned that hiring out the stadium for conferences & various other functions is a potentially lucrative option, though very hard to put a figure to it. Very difficult for anyone to budget for cup games, but given our stature it’s not unrealistic for us to expect, via the law of averages, to have decent cup runs (probably no more finals though!) more often than not. Playing Arsenal away last season reaped almost as much as reaching the final the previous year so its not a case necessarily of how far we progress. Speculative estimate nonetheless, possibly conservative which again would offset the additional costs incurred in staging additional matches. Now expenditure;


Wages (players only) - £10m
Policing - £2.5m
Other Staffing Costs - £4m
Academy - £1m
Total = £17.5m

This was particularly tough and very speculative in parts. The wage bill is right, policing shouldn’t be too far away either as too the Academy costs. It cost £250k to police the Swansea game and whilst that will be by far the most costly game to police, there are many other high profile games too. My calculations work out roughly £100k a game. Other staffing costs are a guess and for simplicity combine any additional costs I can think of such as Director pay, admin, other staffing costs, DJ’s wages, maintenance, stewarding etc. Admin expenses alone in 2008 were over £2.6m so could be, alas, a conservative figure. Very much open to any input overall, but especially on this side of things. However, the end figures shouldn’t be too far away.

Peter assured us that he expected turnover to increase to between £16-18m, which I very much doubted, and that expenditure would drop significantly. While he looks like being right on the turnover, it seems he was only partially right. Taking into account the figures above are not beyond reproach, nonetheless the very best conclusion that can be made is that we will break even at the very, very best and this is taking 2010 into account, not 2009 which will not bring in anywhere near as much as it incorporates the final year at Ninian. Now that in itself would be very much acceptable for a Championship club, but crucially the figures include no loan payments whatsoever which are roughly an additional £2m per year. Peter is understood to be in negotiations with Langston to pay them off for a one off fee with under £10m being mentioned as a figure. While that seems highly optimistic, should a renegotiation take place, it would make the above calculations far more desirable, but that is far from certain. There is also the very real prospect of the debt remaining, just with somebody else, however much more desirable that would be. Ultimately, being in a position of breaking even & selling players to re-invest is a realistic aim for what we all want, but it seems we are still in a position where we unequivocally have to sell to survive, despite the new stadium. To be fair to Peter, had he previously operated within our means & a wage budget accordingly, there is a very high possibility, probability even, that we would now be in League 1 & as a result, not in business at all. However, that does not right the wrongs of expensive mistakes such as the JFH saga & various other instances which were not cost effective for us.

To summarise, I won’t go back over all the figures, they are easily obtainable via the original article, but there is very little option for us, I believe, other than for Peter Ridsdale to continue to operate pretty much as he is. This is in contrast to my feelings in the original article where I felt he should go. Yes, things could be run on a tighter ship, his wages are generous, as too the likes of other board members such as Flitcroft & Harris, while DJ picks up a princely wage too, but they are improving the stature of the club within football circles and making us more conducive to investment or a takeover, however far away that seems. Besides, if it weren’t them getting paid it would be someone else who maybe even less productive. Figures also get buried within the Holding Companies name as opposed to the Club’s, allowing PR to give false indications of prosperity when actually the finances are still hugely concerning. While this may seem on the face of it a discredit to us, I’m sure he is mainly keen not to put off potential investors by truthfully documenting our perilous state. The much publicised incident at Liverpool is a good example, where the Club made a profit of £10m or so, but the Holding Company lost well over £40m & was around £400m in debt. Bad news can be buried in Holding Companies which are inextricably linked to the Club. Cuts could be made elsewhere, the wage bill for example being the most obvious, but £10m on a turnover of £16m is not reckless, the £12m+ wages on turnover of £12m or less as in previous seasons unquestionably was and has contributed to the mess left by Sam. We are still not in a position to be self sufficient & the need to sell players to service the debt is still absolutely critical. For me, though, I believe Peter deserves the opportunity to put things right by seeing how far he gets with renegotiating the debt to Langston and/or waiting for investment of some sort.

What is evident is that Peter is caught between a rock and a hard place. Today is a good time to highlight this with Dave Jones comments imploring PR to show “courage.” This “courage” is what led to us being in this position in the first place along with Leeds astronomical fall from grace under Peter’s stewardship. Sounds more foolish than courageous to me. There is absolutely no getting away from the fact these comments are simply to get fans on his side. There is much bad feeling towards Jones, disgracefully in my eyes, and should we be anything other than top half at least after 10 games, the pressure on him will be immense. This is merely to try and get some of those fans on his side & give him a readymade excuse. For me he should not need one, it’s a virtue not practiced by football fans I know, but patience is of the essence and he needs time to rebuild, but just as we should be realistic with DJ as to what he can do with limited resources, so too should he be more understanding of the resources the club are able to give him. I’m very disappointed at DJ’s grandstanding which is so out of character for him.

Some think Peter is not ambitious enough and should strive harder to keep our better players and invest on top too, others believe he is already gambling and operating beyond our means. The evidence points unequivocally to him doing the latter. While the figures in the original post prove this beyond any doubt, the signing of Chopra was and is an expensive gamble on promotion too, one a club such as us was foolish to take. An unambitious Chairman would have told his Manager with some justification what to do with that request. Sheffield United did a very similar deal with Beattie, signing him for £5m from Everton on £20k+ a week, selling him 17 months later for £4m just to get him off the wage bill as their gamble on his firing the goals to Premiership glory failed. The only thing that offered insurance to our gamble was the saleability of at least 2 of Ledley, Johnson & McCormack, with the very real possibility of Chopra being sold within a year too to get him off the wage bill. The simple & basic mathematics of it are we have to bring in £5m a year just to survive, that’s before we invest in players or before paying off the debt, so how can we spend £5m on players having only recouped the same amount and still be expected to spend more? We cannot. I know the complexities of transfer fees mean we will not have physically spent £4m on Chopra, Sunderland may owe us around £2.5m for the initial deal, leaving 3 yearly payments of £500k as the actual money paid out for example, but nonetheless it is money that we will not have received which was budgeted for a couple of years ago. However it is structured, a fee of £4m is a £4m commitment just as the £5m for Roger is worth £5m, even though we will only see £1m or so of it this year I believe.

Without knowing the exact details of what the Clubs outgoings are, it’s hard to say where savings could be made. A player wage budget of £10m on a turnover of £16m is pretty good business, but it would be remiss of me to say where else cuts could be made without knowing the facts. The emotive and popular answer would probably lie with Peter Ridsdale’s wages, maybe Alan Flitcroft and especially Keith Harris too, but as much as Harris seems to be taking a wage for doing very little, should the time come where his contacts provide investment or a takeover, it will have made sound financial sense. Investment or a takeover is, along with promotion, the only real chance we have of becoming debt free. Having such high profile board members will improve our chances of doing so, though we would be foolish to believe takeovers are not devoid of risk. Mike Ashley anyone? Sometimes it can be a case of better the devil you know.

As for gaining promotion, of course it’s a possibility, but due to the ultra-competitive nature of the league it is a long shot, regardless of our policy and ability to keep our best players. We have to operate a fine balancing act, a juggling act if you wish, between showing ambition & practising sound fiscal management. Occasionally we will drop one of those balls, but as long as they don’t all hit the floor at the same time, we will have the opportunity to pick them back up & start again. That seems to be the case this year, we may have to take a bit of a hit in losing Ledley & Johnson, maybe Ross & Chops too before the start of next season, but providing the club is run well, we will have the chance to rebuild. The problem really starts if we go into even more debt by gambling on promotion. It becomes a vicious circle, we will need to sell more than ever, clubs will know this and force prices down and we would be in more trouble than ever. We are already gambling, to gamble yet more would unquestionably mean committing financial suicide and result in no club at all.

Peter’s plan seems wholly reliant on having crowds of 20k plus just to keep us treading water. That is fine to a degree and realistic as it stands, but what if poor performance this season leads to apathy and a drop in attendance to a more historical average of 14k next season? Big trouble. Unless we reach the Prem, there is no conceivable way Peter can manage the finances in a way that will allow us to make progress off the field which will in turn help us on the field. The other option is of investment/ takeover, but that seems as far away as ever. As stated, even were it to happen, there are risks aplenty. The final option is for Peter to go, but what would that actually solve? Probably nothing. Would someone else come in and improve our operating profit by £5m a year? If so I’ll help Peter pack now, but I can’t see it. Every which way we turn there are risks and more questions, yet no answers. Will we maintain or improve our attendances, will an investor come in and not screw us over, or will we reach the Prem?

It’s a pretty indefinite conclusion to come to, but with the mess we are in there is little we can do other than to continue to operate on the very edge of what we can afford and conservatively gamble on getting promotion, but to gamble yet more would lead to almost certain oblivion for us. Until someone else rides into town, all we can hope that is that Peter is better the devil you know.
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Re: Cardif City's Business Strategy

Postby boring glory » Thu Dec 31, 2009 4:47 pm

wow
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Re: Cardif City's Business Strategy

Postby sack » Thu Dec 31, 2009 4:48 pm

i was expecting at least a week before the first reply!!

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Re: Cardif City's Business Strategy

Postby SBF1 » Thu Dec 31, 2009 4:56 pm

Sheesh!
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Re: Cardif City's Business Strategy

Postby Gareth Bluebird » Thu Dec 31, 2009 4:58 pm

Interesting reading , well I'll bet it is anyway ................... :shock:
It's time we stood up for ourselves so get up off your knees
We'll shake off our detractors and attain our hopes and dreams
And if we fall prey to in-fighting, we're never gonna win,
So put aside your differences, sing loud, sing proud
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Re: Cardif City's Business Strategy

Postby Bourne Blue » Thu Dec 31, 2009 5:17 pm

Who's this player Johnson we can sell? Or have we already sold him?
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Re: Cardif City's Business Strategy

Postby croesybluebird » Thu Dec 31, 2009 5:19 pm

Good, well researched articel Salad my friend.

Thank you - thought provoking
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Re: Cardif City's Business Strategy

Postby Tony Blue Williams » Thu Dec 31, 2009 5:24 pm

Hell of a read Salad but I would point out a couple of simple things.

Firstly please stop getting ahead of yourself you keep doing that by citing the worst case scenario.

Secondly Ridsdale has until 22 April 2010 to pay off the £400,000 owed by W H Sports. If he does the liquidation of his company does what it says on the tin, its voluntary winding up. Also I note that one of the creditors is Barclays Bank, the same bank which has recently made two large loans to the club with Ridsdale at the helm. I have to wonder would they do that knowing him to be such a bad risk.

Thirdly with regard to the estimated figures for turnover at the new stadium if turnover is 40% up on Ninian then a simple sum will give you a ball park figure for turnover at the new stadium.

In the 2008 accounts turnover was £14.9m; 40% of which is £5.98m. Add those two figures together and you get a turnover of £20.98m.

Please note the increased turnover is nearly double the £3m being spent by advanced season tickets in January 2010. Also if you take the £3m away from the total turnover it would leave you with £18m which would have been enough for us to have broken even in 2008.
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Re: Cardif City's Business Strategy

Postby Bluebird4eva » Thu Dec 31, 2009 5:33 pm

Great post Salad! Very thought provoking.
The first part of it appeared on the CCMB a good few months back, hence the mentioning of Johnson in that piece.
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Re: Cardif City's Business Strategy

Postby Joff » Thu Dec 31, 2009 5:36 pm

Firstly I would like to say a very informative and well written post.

Your figures are looking at an extract of the P&L, there are 2 much more useful statements to interpret a companies position, these are: -

Statement of Financial Position (SoFP) (Balance Sheet)
Statement of Cashflows

A SoFP summaries the non-current & current assets and the Current & long term Liabilities to the Equity of the company.
Having this information allows a company or individual to calculate several ratios which will interpret a companies future or performance over a period of time, e.g Liquidity ratio (Debt v's Equity). Investors and lendors will use this in order to make a judgement on that companies solvency.

Statement of Cashflows are ultimiately linked to the P&L and SoFP, any company can make a profit but not all can be cash rich. A cashflow starts with the operating profit/(loss) and makes allowances for any non-cash items from the other statements e.g Depreciation (in the P&L but no cash effect, not until the asset is sold). It looks at the increase/decrease in payables (creditors) and Receivables (debtors) as this has a cash effect. The list goes on.

I have previously stated that a P&L shows the extract for that period, e.g. rates will be split over a 12 month period in the P&L yet paid in one installment for cashflow purposes.

All 3 financial statements are required to make a full interpretation of their position, also, as correctly stated all f/s are historic and usually published many months after the event.

Following certain well-publicised corporate collapses it is much more difficult to have any off-balance sheet finance and given that CCFC will need a full audit and I presume the final accounts are always stated to be a true and fair view we should have some faith in the published accounts.
I may not agree with what you say, but I will defend with my life your right to say it," Voltaire,
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Re: Cardif City's Business Strategy

Postby saladthedragon » Thu Dec 31, 2009 6:07 pm

Cheers for the comments guys. Just to clarify, the first part of this was done back in June, the second part in July, hence the odd anomaly to the present day. Wish we did have another Johnson on the books, and I don't mean Eddie!

Tony my friend! I won't go over the sensitive subject you mention, to be honest I forgot that was in it and is not the focus of the piece anyway, CCFC is. I'm also not stating worst case scenario's here, merely trying to ascertain what our turnover and expenditure will be given Peter's claims of our future prosperity and that we didn't need to sell players as a result of the new stadium, which he was quoted as saying back then. Indeed, Peter has publicly stated turnover will be between £16-18m at the CCS, although he has more recently accepted it will be towards the lower end of that estimate. Where you get your estimated £20m+ turnover from is wishful thinking I'm afraid, something even Peter himself would agree with. I also understand 2008 turnover to stand at just under £12.8m rather than £14.9m. Either way, I will not profess to state something unequivocally if I'm not 100% certain, but if we have a turnover anywhere near £20m, my names Dirk Diggler! Another oversight from my estimates are no tax, aside form not factoring in any debt payments, which would be another significant addition to the expenditure, so it is far from worst case and maybe somewhat optimistic. I'm sure people such as Joff and others who have a far more innate knowledge of financial matters than me would be able to come up with an improved estimate.

You will probably notice from the tone of the pieces that I was far less anti-Ridsdale then than I am now. The figures are also not altered in anyway to suit a preconceived agenda, to do so would be folly. I did my research for these pieces back in May/June with no pre-conceived agenda and firmly believeing Ridsdale at the time was doing much good for the club, but having reflected on the information yielded and the subsequent shenanigins we have encountered, his lies, deceit & propaganda are a long way from the transparency he purports to convey and as such I make no apologies for wanting him out of our club.
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Re: Cardif City's Business Strategy

Postby asensibleman » Thu Dec 31, 2009 6:23 pm

As you say of yourself:

"I am not remotely qualified to give a specific opinion on the technicalities documented above as much of this techno-financial-gobbledygook flies over my head"

Yet you then go on to use these words "lies, deceit".

Do you know the meaning of libel? Does the site owner?
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Re: Cardif City's Business Strategy

Postby saladthedragon » Thu Dec 31, 2009 6:30 pm

It would not be difficult to prove, it already has been. The easiest way of proving just one of his lies is the claim of the Malysians having already invested in the club back in November. Then he changed it to "imminently, in a week or so" at the Muni meeting in front of hundreds of witnesses, backed up by people who took notes from the meeting. Now it is February at the earliest. Or is that not lying in your book, to state something, knowing it to be untrue, then trying to cover your tracks? Sorry, liar.
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Re: Cardif City's Business Strategy

Postby Ninian 72 » Thu Dec 31, 2009 7:07 pm

I need a few days to to take it all in, your a good writer joff, get annis to sign you up :lol:
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