Cardiff City Forum



A forum for all things Cardiff City

WOULD YOU INVEST

Wed Dec 16, 2009 10:42 am

The new plan for season ticket whilst appealing to fans purely on a financial basis, does concern me on the long term. It does look somewhat like a panic incentive to simply keep us going short term, but what could it mean long term.

It does look like another Leeds scenario,and we all know what happened there, you cannot sell all future revenue streams and still have a future income. Imagine our potential investors being told "yes you can by the club for X amount,But if the team is successful and gets into the Premiership, you will lose any ticket revenue from possibly ten thousand fans who will now have free tickets"that is somewhere around 4 to 5 million pound of lost revenue.

It all smacks a bit of short termism, and us fans aren't in it for the short term, we are stuck with it for life.It's O.K. for some short term current investors/profit seeking business men who by then will be sitting in the Caribbean villas drinking cocktails.

We are being told that this money will be made available to Dave Jones (that's a new one,NOT!!)yet next year we are supposedly paying back Langstones, PMG, HMRC so if we can do all that next year, how are we in such a mess this year and yet we have not made any payments to afore mentioned.And barring one or two players, our crown jewels have already been sold off, so there wont be the 28 million pounds player sales we have recently had.

I am genuinely concerned, I don't want to put any fans off buying season tickets, I'm in the process of buying mine, but I really am worried about our future.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:44 am

Top Post Gwyn......

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:45 am

I agree with most of what you say in there Gwyn.

The only possible plus would be getting the promotion that would turn the £4m lost into a profit of say £35m. Season tickets that wouldnt sell in next seasons Championship most likely would in the top flight then bridging that gap.

However, if we weren't to go up then, as uou say it's £4m down before pre season is underway.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:50 am

As you say Gwyn, Leeds all over again.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:54 am

Not only would the lost £4-5 million be outweighed by the extra £35-40 million we would be getting for being in the Premiership but we would also get extra money as the club would charge more for the remaining season tickets, walk up prices and also the Premier seating so I dont think the club are gambling by offering us the free renewals if we go up.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:56 am

top post gwyn.if we did get to the prem then any remaining seats would be sold at a premium making up the three/four million shortfall.However i dont believe the money raised will go on new signings but will be used to pay off existing debts.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:58 am

It's exactly what I was thinking. If we get the season ticket money in early we can buy in the January transfer window but then what about the summer? What will we do when we usually have the season ticket money coming in but it's not coming in because it has already come in?

Really good post Gwyn. It does have me thinking that the club is just concerned with plugging the current holes and isn't thinking of the long game. It does seem as if they want to deal with what is happening now and what happens in the future will sort itself out.

Like the comparison you made with Leeds where Ridsdale made decisions based on the best case scenario. It seems the club is making decisions based on the event that we will a) be invested in and b) make the Premiership.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 10:58 am

Mind you, if we sell, say 10,000 season tickets out of a home capacity of 24-25,000 of our ground (on this offer), we will still have 10,000 to sell to new fans if we make the Premiership, who will not get any money back/free tickets. Clubs who go up do generally sell their ground out, or very close to it, with ST holders, so maybe they're taking this into account. If the prices go up from what they are this season, which would seem likely, then the club could end up making a profit on STs over this season anyway

Re: WOULD YOU INVEST

Wed Dec 16, 2009 11:11 am

If we invest this money in players now but fail to go up then I would expect us to sell come next summer.

You need a back up plan for this kind of move. With Adam Matthews being valued at £5 million we can expect to see him sold next summer to make up for it. Ross MacCormack, Joe Ledley and perhaps one or two others could be considered also as possible assets to cover the loss. Also whats to say someof the players we bring in could go up in value. DJ has got a record for doing this.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 11:16 am

herefordblue wrote: i dont believe the money raised will go on new signings but will be used to pay off existing debts.


Todays Echo says precisely that

Re: WOULD YOU INVEST

Wed Dec 16, 2009 11:18 am

Gerry Hat Trick wrote:
herefordblue wrote: i dont believe the money raised will go on new signings but will be used to pay off existing debts.


Todays Echo says precisely that


Yes well lets just say the Echo and the club dont seem to like each other.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 11:18 am

Zabier wrote:It's exactly what I was thinking. If we get the season ticket money in early we can buy in the January transfer window but then what about the summer? What will we do when we usually have the season ticket money coming in but it's not coming in because it has already come in?

I'm not sure I agree with all of your post, Zabier. I think the club are maybe thinking that not everyone who intends to be a season ticket holder next season will be taking up this offer, so there will probably be some ticket income in the summer. I would have thought, even though they get their money back, some people will still be wary of this offer. I would be interested to see the percentage of people who bought their tickets early for this season against people who bought in the summer

Re: WOULD YOU INVEST

Wed Dec 16, 2009 11:21 am

Based on recent trends Season Tickets for 2011-12 will go on sale in September 2010. So you get your refund (presuming there is a promotion) in August and then you give the cash back to the club 4 weeks later to purchase the following seasons ticket.

Ridsdale ain't daft.

Re: WOULD YOU INVEST

Wed Dec 16, 2009 2:02 pm

BigGwynram wrote:The new plan for season ticket whilst appealing to fans purely on a financial basis, does concern me on the long term. It does look somewhat like a panic incentive to simply keep us going short term, but what could it mean long term.

It does look like another Leeds scenario,and we all know what happened there, you cannot sell all future revenue streams and still have a future income. Imagine our potential investors being told "yes you can by the club for X amount,But if the team is successful and gets into the Premiership, you will lose any ticket revenue from possibly ten thousand fans who will now have free tickets"that is somewhere around 4 to 5 million pound of lost revenue.

It all smacks a bit of short termism, and us fans aren't in it for the short term, we are stuck with it for life.It's O.K. for some short term current investors/profit seeking business men who by then will be sitting in the Caribbean villas drinking cocktails.

We are being told that this money will be made available to Dave Jones (that's a new one,NOT!!)yet next year we are supposedly paying back Langstones, PMG, HMRC so if we can do all that next year, how are we in such a mess this year and yet we have not made any payments to afore mentioned.And barring one or two players, our crown jewels have already been sold off, so there wont be the 28 million pounds player sales we have recently had.

I am genuinely concerned, I don't want to put any fans off buying season tickets, I'm in the process of buying mine, but I really am worried about our future.



Gwyn

As a marketing ploy , the new offer is very well thought out - the prospect of a possible free season ticket for Premiership football next season is attractive and will give a big boost to sales over the next couple of weeks (they have been poor to date , despite the 5 year price freeze offered). By the way , Burnley did this last year , so it is not quite the new idea of Dave Jones that the club is making out , but full marks to him if he suggested to the board that they copy the idea.

Financially , the deal has its flaws.

Not a problem if promotion is actually achieved as the cost of the scheme even at the max. of 10,000 tickets is likely to be less than £3m taking nto account child and over 60 tickets and this will be affordable out of the £30m plus of extra prize money that would come from that promotion. Also ,I would think all the other 14,000 seats (including the expensive Premier Club ones that have been hard to shift so far) would be sold at normal or higher prices to compensate as well. Plus there would be additional adverising and sponsorship money.

The problem comes if the money comes in now and is spent .I don`t believe that the majority of it will go on new players , but a lot used to deal with existing pressing debts and instalments due to Langston until any new Malaysian investment arrives (if it does at all) - in any case it will be spent (and quickly). Therefore , we could arrive at the start of next season with half our gate money already long since received and spent , and very little to replace it .What replaces that hole in the cash flow finances?

Peter Ridsdale really does worry me with a policy of borrow money now and spend it in exchange for giving away next season`s income and beyond.It worried me further when he mentioned at the recent Muni meeting the term "securitisation" - which is basically giving away many years of future income in exchange for a lump of cash now and relies heavily on that future income being as good as or better than current levels for it to work. Highly risky and probably one of the main factors that brought Leeds Utd to its knees financially (when they didn`t qualify for Europe each and every year they didn`t generate enough income to pay off the loans and had few players to sell to balance the books as they had already sold them to finance companies!). I had hoped (perhaps naively) that he had learnt a valuable lesson from that failure and wouldn`t risk repeating it.

I truly hope that a full takeover by the Malaysians takes place with a new cash injection into the club (rather than just into the personal pockets of a few individuals who sell their own shares to them at inflated prices , reducing the balance available for the club itself). Without it , the only Plan B available is the continuation of fire sales of players in every transfer window to raise cash , and there is no guarantee of that happening all the time.

But the club needs lots of money , and soon and the Malaysians must be aware of this (and that they are probably the only bidders out there - I don`t quite believe this "second potential investor " bit) and will use this in their negotiations on price and other terms - people like Vincent Tan don`t become billionaires by wasting their money on business deals on a whim. So , if the current shareholders are too greedy with their personal pay-offs they are seeking , that could delay or even scupper any deal.

Just some of my personal thought.


Keith