How much promotion was worth to Cardiff

A forum for all things Cardiff City

How much promotion was worth to Cardiff

Postby Forever Blue » Tue Mar 12, 2019 3:54 pm

How much promotion was worth to Cardiff?


By Dean Rudge

Tuesday 12th March 2019


Here, we take a look at the key take aways from the club's accounts, for the financial year ending May 31st, 2018.




The lucrative nature of the Premier League should ensure Cardiff will meet debts on time.


The last time Cardiff were promoted, the club’s revenues jumped by around £66m, from £17.3m in 2012/13 to £83.1m in 2013/14.

Here is the evidence of the sizeable broadcasting revenues on offer in the Premier League, even before the major upgrade to prize money that was instated for the 2016/17 season.

Were Cardiff to slide back into the Championship, the payout would still be astronomical compared to 2017/18’s revenues, and the club would be eligible for parachute payments next season.

Last season, the three relegated clubs each picked up just shy of £100m from the Premier League – Swansea and Stoke taking just under £99m and bottom-placed West Brom £95m.

Escaping relegation by just three points, 17th placed Southampton took home £107m.


What’s more, Cardiff can expect a boost in gate receipts from playing Premier League football.

During their previous Premier League campaign, Cardiff’s average attendance was 27,440, adding £2million to ticket sales year-on-year.

Last season in the Championship, an average crowd of 20,164 watched the Bluebirds storm to a second-placed finish.

This was a more than 20 per cent rise on the average attendance for 2016/17, when 16,564 watched Cardiff finish 18 points outside of the play-offs.

So far this season the average home attendance, up to and including the West Ham match, is 31,180, a significant increase on the last time the club were in the Premier League.



During the summer of 2018, the club’s accounts reveal, Cardiff spent £35.4m on new players – including permanent deals for Josh Murphy, Bobby Reid, Alex Smithies and Greg Cunningham – of which £2.6m is contingent on the club competing in the Premier League next season.

These signings were backed by a £28.3m loan facility Cardiff entered into with a third party, which provided extra capital.
Attachments
0_Cardiff-City-v-Reading-Sky-Bet-Championship-Cardiff-City-Stadium.jpg
0_Cardiff-City-v-Reading-Sky-Bet-Championship-Cardiff-City-Stadium.jpg (89 KiB) Viewed 4877 times
Annis Jnr Author and Publisher of 7 Books.

My 7th Book is Available Now "MY STORY"

http://www.annisabraham.co.uk/books/buy-books/
http://www.annisabraham.co.uk/news/

My email : annisabraham@aol.com
Twitter: http://www.twitter.com/annisabraham
User avatar
Forever Blue
Admin
 
Posts: 112521
Joined: Sat Nov 21, 2009 11:30 am

How much promotion was worth to Cardiff

Advertisement

Advertisement
Login or Register to remove this ad.

Re: How much promotion was worth to Cardiff

Postby Forever Blue » Tue Mar 12, 2019 3:55 pm

Huge promotion bonuses drag down Cardiff profits

Nailing down Cardiff’s losses for 2017-18 proved a tricky business, with various moving parts at play.




Despite revenues rising by around £6m year-on-year to £34.8m, following a near £4m rise in sponsorship and advertising income, the club slumped to a £34m operating loss, excluding the benefit of profit derived from offloading players.

This was a near £16m rise on 2016-17’s £18.4m operating loss, although Cardiff moved deeper into the red on the back of one-off huge bonuses and contractual commitments for regaining Premier League status.

Exactly £23.16m was paid out by the club in these bonuses.

Stripping out the payments brought an operating loss of £10.9m, meaning nearly two-thirds of the club’s losses were due to these exceptional one-off bonus payments.

In all, the club’s total wage bill rose more than £19m to £48.4m, with player wages and salaries around £10.5m higher at £31.2m.

Cardiff’s pre-tax losses for the season increased from £21.1m to £39.3m, as a £2.4m gain on selling players – down from £5.6m in 2016/17 – was heavily outweighed by £7.7m worth of finance costs. These mainly centred around a technical accounting treatment of loans made to the club by owner Tan.




In May 2017, the Cardiff City Stadium was independently professionally revalued to reflect its current depreciated replacement cost value. As a consequence, the stadium's value rose from £54m to £83.5m. The stadium is held on a 150-year lease from Cardiff City Council from September 2009.
Annis Jnr Author and Publisher of 7 Books.

My 7th Book is Available Now "MY STORY"

http://www.annisabraham.co.uk/books/buy-books/
http://www.annisabraham.co.uk/news/

My email : annisabraham@aol.com
Twitter: http://www.twitter.com/annisabraham
User avatar
Forever Blue
Admin
 
Posts: 112521
Joined: Sat Nov 21, 2009 11:30 am

Re: How much promotion was worth to Cardiff

Postby Forever Blue » Tue Mar 12, 2019 3:56 pm

Vincent Tan continues to write off debts

Debts had risen from to nearly £200million in the last 10 years,now they are falling massively.

The club’s owner, Vincent Tan, had previously pledged to have Cardiff debt-free by 2021.

A trend of writing off debt at the end of the season to achieve this goal continued last year, with a huge £79.1m of Tan’s debt converted into equity.






This came in two tranches across the season, as he also waived payable interest.

In June 2017, Tan wrote off approximately £12.6m of loans via an equity conversion, before turning a further £66.4m he had loaned to the club into equity in May 2018.


This helped Cardiff’s net liabilities fall dramatically, from £80.8m to £10.7m year-on-year, strengthening the balance sheet.

The club’s current liabilities – due by 31 May 2019 – stand at a little under £116m, including £72.4m loaned to the club by Tan during the season.

“While the company has significant net liabilities,” the club acknowledges in its Strategic Report, “the principal indebtedness at the year-end was to the controlling shareholder.”

Cardiff say they are confident of the “support of the its controlling shareholder,” maintaining that while this funding is “not guaranteed, the ultimate owner has indicated that providing the business develops as planned, he will continue to support the company in the foreseeable future.”

Tan will also provide additional finance in order that the club can settle its liabilities as they fall due, the club understand.

The lucrative nature of the Premier League should ensure Cardiff will meet debts on time.
Annis Jnr Author and Publisher of 7 Books.

My 7th Book is Available Now "MY STORY"

http://www.annisabraham.co.uk/books/buy-books/
http://www.annisabraham.co.uk/news/

My email : annisabraham@aol.com
Twitter: http://www.twitter.com/annisabraham
User avatar
Forever Blue
Admin
 
Posts: 112521
Joined: Sat Nov 21, 2009 11:30 am

Re: How much promotion was worth to Cardiff

Postby Forever Blue » Tue Mar 12, 2019 3:59 pm

During the summer of 2018, the club’s accounts reveal, Cardiff spent £35.4m on new players – including permanent deals for Josh Murphy, Bobby Reid, Alex Smithies and Greg Cunningham – of which £2.6m is contingent on the club competing in the Premier League next season.

These signings were backed by a £28.3m loan facility Cardiff entered into with a third party, which provided extra capital.
Annis Jnr Author and Publisher of 7 Books.

My 7th Book is Available Now "MY STORY"

http://www.annisabraham.co.uk/books/buy-books/
http://www.annisabraham.co.uk/news/

My email : annisabraham@aol.com
Twitter: http://www.twitter.com/annisabraham
User avatar
Forever Blue
Admin
 
Posts: 112521
Joined: Sat Nov 21, 2009 11:30 am

Re: How much promotion was worth to Cardiff

Postby Forever Blue » Tue Mar 12, 2019 4:01 pm

Huge promotion bonuses drag down Cardiff profits

Nailing down Cardiff’s losses for 2017-18 proved a tricky business, with various moving parts at play.




Despite revenues rising by around £6m year-on-year to £34.8m, following a near £4m rise in sponsorship and advertising income, the club slumped to a £34m operating loss, excluding the benefit of profit derived from offloading players.

This was a near £16m rise on 2016-17’s £18.4m operating loss, although Cardiff moved deeper into the red on the back of one-off huge bonuses and contractual commitments for regaining Premier League status.

Exactly £23.16m was paid out by the club in these bonuses.

Stripping out the payments brought an operating loss of £10.9m, meaning nearly two-thirds of the club’s losses were due to these exceptional one-off bonus payments.

In all, the club’s total wage bill rose more than £19m to £48.4m, with player wages and salaries around £10.5m higher at £31.2m.

Cardiff’s pre-tax losses for the season increased from £21.1m to £39.3m, as a £2.4m gain on selling players – down from £5.6m in 2016/17 – was heavily outweighed by £7.7m worth of finance costs. These mainly centred around a technical accounting treatment of loans made to the club by owner Tan.




In May 2017, the Cardiff City Stadium was independently professionally revalued to reflect its current depreciated replacement cost value. As a consequence, the stadium's value rose from £54m to £83.5m. The stadium is held on a 150-year lease from Cardiff City Council from September 2009.
Annis Jnr Author and Publisher of 7 Books.

My 7th Book is Available Now "MY STORY"

http://www.annisabraham.co.uk/books/buy-books/
http://www.annisabraham.co.uk/news/

My email : annisabraham@aol.com
Twitter: http://www.twitter.com/annisabraham
User avatar
Forever Blue
Admin
 
Posts: 112521
Joined: Sat Nov 21, 2009 11:30 am

Re: How much promotion was worth to Cardiff

Postby Forever Blue » Tue Mar 12, 2019 4:02 pm

In May 2017, the Cardiff City Stadium was independently professionally revalued to reflect its current depreciated replacement cost value. As a consequence, the stadium's value rose from £54m to £83.5m. The stadium is held on a 150-year lease from Cardiff City Council from September 2009.
Annis Jnr Author and Publisher of 7 Books.

My 7th Book is Available Now "MY STORY"

http://www.annisabraham.co.uk/books/buy-books/
http://www.annisabraham.co.uk/news/

My email : annisabraham@aol.com
Twitter: http://www.twitter.com/annisabraham
User avatar
Forever Blue
Admin
 
Posts: 112521
Joined: Sat Nov 21, 2009 11:30 am

Re: How much promotion was worth to Cardiff

Postby SirJimmySchoular » Wed Mar 13, 2019 12:47 pm

This is all very confusing.
On the face of it, it seems impossible to run profitably. However ,what's missing is the sum exact they received or will receive as their share of tv fees from the premier league this season.
There should be lots of ancillary revenue schemes but it's often occurred to me that they don't exploit them . Surely we could get a lot of money renaming the stadium - I don't like the idea much but everyone else seems to have renamed their grounds the Weetabix Stadium or something and gotten a lot of money from that.
SirJimmySchoular
 
Posts: 1721
Joined: Sat Jul 21, 2018 9:52 pm

Re: How much promotion was worth to Cardiff

Postby ccfcsince1962 » Wed Mar 13, 2019 2:09 pm

SirJimmySchoular wrote:This is all very confusing.
On the face of it, it seems impossible to run profitably. However ,what's missing is the sum exact they received or will receive as their share of tv fees from the premier league this season.
There should be lots of ancillary revenue schemes but it's often occurred to me that they don't exploit them . Surely we could get a lot of money renaming the stadium - I don't like the idea much but everyone else seems to have renamed their grounds the Weetabix Stadium or something and gotten a lot of money from that.


It is very difficult to make a profit at Championship level , which is the level we were at for the May 2018 accounts.

This season we will make a profit , despite greatly increased wage levels (don`t believe NW`s claim that our budget is only half that of Huddersfield), due to the benefit (at least £98m) derived from t.v. money and increased gate money, sponsorship, commercial income etc. I have no access to actual figures but would estimate that profit to be around the £20m level.

The various extracts which Annis posts above are different sections of the same report prepared by Paul Abbandonato but attributed to another Walesonline employee and which itself is based on a commentary I did on the accounts some weeks ago and posted via the Trust website. There is nothing new or different in the recent report.
ccfcsince1962
 
Posts: 247
Joined: Tue Jan 31, 2017 9:51 am

Re: How much promotion was worth to Cardiff

Postby JJ1927 » Wed Mar 13, 2019 2:35 pm

ccfcsince1962 wrote:
SirJimmySchoular wrote:This is all very confusing.
On the face of it, it seems impossible to run profitably. However ,what's missing is the sum exact they received or will receive as their share of tv fees from the premier league this season.
There should be lots of ancillary revenue schemes but it's often occurred to me that they don't exploit them . Surely we could get a lot of money renaming the stadium - I don't like the idea much but everyone else seems to have renamed their grounds the Weetabix Stadium or something and gotten a lot of money from that.


It is very difficult to make a profit at Championship level , which is the level we were at for the May 2018 accounts.

This season we will make a profit , despite greatly increased wage levels (don`t believe NW`s claim that our budget is only half that of Huddersfield), due to the benefit (at least £98m) derived from t.v. money and increased gate money, sponsorship, commercial income etc. I have no access to actual figures but would estimate that profit to be around the £20m level.

The various extracts which Annis posts above are different sections of the same report prepared by Paul Abbandonato but attributed to another Walesonline employee and which itself is based on a commentary I did on the accounts some weeks ago and posted via the Trust website. There is nothing new or different in the recent report.

Not exactly sure how they account for certain things and I may be wrong but I would expect the profit to be higher than the 20 million you quote as I understood the £35 million spent on the 4 signings will be written off over the term of the contract which is probably three years. Thus only about 12 million this year. To this you need to add a third of Madine's and Tomlins fee which will be written off this year, so something like 15 million will actually hit the profit in respect of signings. With turnover likely to be in the region of at least £120 million (TV money for finishing 18th at worst will be £100 million, gate, sponsorship etc) that leaves around £105 million to cover everything else. Be surprised if they cant make at least £30 million on that.
JJ1927
 
Posts: 517
Joined: Mon Sep 12, 2016 12:19 pm

Re: How much promotion was worth to Cardiff

Postby Sir » Wed Mar 13, 2019 6:41 pm

to run a club sustainably requires a very disciplined focus on controlling costs, and a determination to maximise revenue. we dont have either. very few clubs do.

most of the financial benefits of premier league status accrue to the players, £23m in bonuses, and big jumps in wages for all of them. we've spent in the region of £50m if you include sala, and loan fees, in fees this year. factoring in increased wages, and despite running a much lower budget than most rivals it's easy to see who gets the lions share of the spoils.

if you think our figures are bad, look at the likes of wolves, villa and newcastle when they were in the championship. owners of small PL teams and championship teams are gambling because you are chucking money at the cause with a very uncertain outcome.
Sir
 
Posts: 28
Joined: Tue Mar 05, 2019 8:09 pm

Re: How much promotion was worth to Cardiff

Postby ccfcsince1962 » Thu Mar 14, 2019 9:46 am

JJ1927 wrote:
ccfcsince1962 wrote:
SirJimmySchoular wrote:This is all very confusing.
On the face of it, it seems impossible to run profitably. However ,what's missing is the sum exact they received or will receive as their share of tv fees from the premier league this season.
There should be lots of ancillary revenue schemes but it's often occurred to me that they don't exploit them . Surely we could get a lot of money renaming the stadium - I don't like the idea much but everyone else seems to have renamed their grounds the Weetabix Stadium or something and gotten a lot of money from that.


It is very difficult to make a profit at Championship level , which is the level we were at for the May 2018 accounts.

This season we will make a profit , despite greatly increased wage levels (don`t believe NW`s claim that our budget is only half that of Huddersfield), due to the benefit (at least £98m) derived from t.v. money and increased gate money, sponsorship, commercial income etc. I have no access to actual figures but would estimate that profit to be around the £20m level.

The various extracts which Annis posts above are different sections of the same report prepared by Paul Abbandonato but attributed to another Walesonline employee and which itself is based on a commentary I did on the accounts some weeks ago and posted via the Trust website. There is nothing new or different in the recent report.

Not exactly sure how they account for certain things and I may be wrong but I would expect the profit to be higher than the 20 million you quote as I understood the £35 million spent on the 4 signings will be written off over the term of the contract which is probably three years. Thus only about 12 million this year. To this you need to add a third of Madine's and Tomlins fee which will be written off this year, so something like 15 million will actually hit the profit in respect of signings. With turnover likely to be in the region of at least £120 million (TV money for finishing 18th at worst will be £100 million, gate, sponsorship etc) that leaves around £105 million to cover everything else. Be surprised if they cant make at least £30 million on that.


What about the annual write-off of the cost of players already at the club (who had a written down value of £12m at the end of May 2018)? That would be another £4m a season.

Excluding the wages bill of £48m, the costs of running the club in the year to 31 May 2018 was about £25m. If the wage bill for the current season is around the £75m mark (which I expect it to be), then total costs this season would be £12m + £4m +£25m + £75m - a total of £116m.
ccfcsince1962
 
Posts: 247
Joined: Tue Jan 31, 2017 9:51 am

Re: How much promotion was worth to Cardiff

Postby JJ1927 » Thu Mar 14, 2019 1:31 pm

ccfcsince1962 wrote:
JJ1927 wrote:
ccfcsince1962 wrote:
SirJimmySchoular wrote:This is all very confusing.
On the face of it, it seems impossible to run profitably. However ,what's missing is the sum exact they received or will receive as their share of tv fees from the premier league this season.
There should be lots of ancillary revenue schemes but it's often occurred to me that they don't exploit them . Surely we could get a lot of money renaming the stadium - I don't like the idea much but everyone else seems to have renamed their grounds the Weetabix Stadium or something and gotten a lot of money from that.


It is very difficult to make a profit at Championship level , which is the level we were at for the May 2018 accounts.

This season we will make a profit , despite greatly increased wage levels (don`t believe NW`s claim that our budget is only half that of Huddersfield), due to the benefit (at least £98m) derived from t.v. money and increased gate money, sponsorship, commercial income etc. I have no access to actual figures but would estimate that profit to be around the £20m level.

The various extracts which Annis posts above are different sections of the same report prepared by Paul Abbandonato but attributed to another Walesonline employee and which itself is based on a commentary I did on the accounts some weeks ago and posted via the Trust website. There is nothing new or different in the recent report.

Not exactly sure how they account for certain things and I may be wrong but I would expect the profit to be higher than the 20 million you quote as I understood the £35 million spent on the 4 signings will be written off over the term of the contract which is probably three years. Thus only about 12 million this year. To this you need to add a third of Madine's and Tomlins fee which will be written off this year, so something like 15 million will actually hit the profit in respect of signings. With turnover likely to be in the region of at least £120 million (TV money for finishing 18th at worst will be £100 million, gate, sponsorship etc) that leaves around £105 million to cover everything else. Be surprised if they cant make at least £30 million on that.


What about the annual write-off of the cost of players already at the club (who had a written down value of £12m at the end of May 2018)? That would be another £4m a season.

Excluding the wages bill of £48m, the costs of running the club in the year to 31 May 2018 was about £25m. If the wage bill for the current season is around the £75m mark (which I expect it to be), then total costs this season would be £12m + £4m +£25m + £75m - a total of £116m.

I had already included the big write offs of players in my calculation for Tomlin and Madine. I would be very surprised if the wage bill is anywhere near £75 million. The bulk of the wages are paid to the players who are in the squad of 25. Even at todays ridiculous wages I cant see many of them being on much more than 20K a week - 1 million - and some will be on a fair bit less e.g Healey, Kadeem Harris, Peltier, Murphy etc. An average wage bill of £1 million a squad player seems about right which would mean another £50 million is being spent on other players, coaches and admin staff. Seems much too high to me. But if you are correct and the wage bill is around 75 million is correct, then the club is still a financial basket case. Of course, if we stay up the figures will change as bonuses will be added.
JJ1927
 
Posts: 517
Joined: Mon Sep 12, 2016 12:19 pm

Re: How much promotion was worth to Cardiff

Postby bluecityblue » Thu Mar 14, 2019 8:21 pm

What does debt to equity actually mean? If Tan owns the club, and it owes him £70m odd, he then converts that debt into equity of something he already owns? Wouldn't that be like buying the club twice? Sorry if it's a stupid question but I've wondered this for ages.
User avatar
bluecityblue
 
Posts: 828
Joined: Sat Jul 24, 2010 5:32 pm

Re: How much promotion was worth to Cardiff

Postby WelshPatriot » Fri Mar 15, 2019 7:20 am

JJ1927 wrote:
ccfcsince1962 wrote:
JJ1927 wrote:
ccfcsince1962 wrote:
SirJimmySchoular wrote:This is all very confusing.
On the face of it, it seems impossible to run profitably. However ,what's missing is the sum exact they received or will receive as their share of tv fees from the premier league this season.
There should be lots of ancillary revenue schemes but it's often occurred to me that they don't exploit them . Surely we could get a lot of money renaming the stadium - I don't like the idea much but everyone else seems to have renamed their grounds the Weetabix Stadium or something and gotten a lot of money from that.


It is very difficult to make a profit at Championship level , which is the level we were at for the May 2018 accounts.

This season we will make a profit , despite greatly increased wage levels (don`t believe NW`s claim that our budget is only half that of Huddersfield), due to the benefit (at least £98m) derived from t.v. money and increased gate money, sponsorship, commercial income etc. I have no access to actual figures but would estimate that profit to be around the £20m level.

The various extracts which Annis posts above are different sections of the same report prepared by Paul Abbandonato but attributed to another Walesonline employee and which itself is based on a commentary I did on the accounts some weeks ago and posted via the Trust website. There is nothing new or different in the recent report.

Not exactly sure how they account for certain things and I may be wrong but I would expect the profit to be higher than the 20 million you quote as I understood the £35 million spent on the 4 signings will be written off over the term of the contract which is probably three years. Thus only about 12 million this year. To this you need to add a third of Madine's and Tomlins fee which will be written off this year, so something like 15 million will actually hit the profit in respect of signings. With turnover likely to be in the region of at least £120 million (TV money for finishing 18th at worst will be £100 million, gate, sponsorship etc) that leaves around £105 million to cover everything else. Be surprised if they cant make at least £30 million on that.


What about the annual write-off of the cost of players already at the club (who had a written down value of £12m at the end of May 2018)? That would be another £4m a season.

Excluding the wages bill of £48m, the costs of running the club in the year to 31 May 2018 was about £25m. If the wage bill for the current season is around the £75m mark (which I expect it to be), then total costs this season would be £12m + £4m +£25m + £75m - a total of £116m.

I had already included the big write offs of players in my calculation for Tomlin and Madine. I would be very surprised if the wage bill is anywhere near £75 million. The bulk of the wages are paid to the players who are in the squad of 25. Even at todays ridiculous wages I cant see many of them being on much more than 20K a week - 1 million - and some will be on a fair bit less e.g Healey, Kadeem Harris, Peltier, Murphy etc. An average wage bill of £1 million a squad player seems about right which would mean another £50 million is being spent on other players, coaches and admin staff. Seems much too high to me. But if you are correct and the wage bill is around 75 million is correct, then the club is still a financial basket case. Of course, if we stay up the figures will change as bonuses will be added.


10 of our 25 are all on over 20k a week, Reid and Manga get around 30k.
WelshPatriot
 
Posts: 1617
Joined: Fri Nov 11, 2016 11:40 am

Re: How much promotion was worth to Cardiff

Postby Sir » Fri Mar 15, 2019 10:40 am

bluecityblue wrote:What does debt to equity actually mean? If Tan owns the club, and it owes him £70m odd, he then converts that debt into equity of something he already owns? Wouldn't that be like buying the club twice? Sorry if it's a stupid question but I've wondered this for ages.


technically the club owes him money, but in practice, the debt is so large that the club could not reasonably pay it back, so it is effectively written off.

to club would have to be asset stripped to pay back the total debt (which was the original £115m debt which was largely run up by tan) and we'd probably end up in league 2 or the conference as a result. we dont generate surplus cash every year like manchester united, who are one of the few clubs to be run like a business.
Sir
 
Posts: 28
Joined: Tue Mar 05, 2019 8:09 pm

Re: How much promotion was worth to Cardiff

Postby SirJimmySchoular » Fri Mar 15, 2019 10:51 am

It does seem that unless something is done to improve revenues progress can't happen .
The big six clubs have other world wide revenue streams so they can afford the players and salaries needed to compete properly in the premiership.
If something isn't done then we've probably already done as well as anyone in the circumstances could , which would be dissapointing and certainly unfair.

Off the top of my head I'd be putting 10% on all ticket prices straight away and planning the quickest practical extension to capacity in the break, ( subject to being in the premiership then of course).
I'd be looking for commercial stadium sponsorship and additional forms of sponsorship and advertising plus new kinds of merchandising and events management where corporate clients get a weekend being coached and meet some players .

Those outside the top six need to collectively approach the premier league to either improve their share of revenue or restrict the sound of the rich clubs, and play hard ball when they make that approach.

At present ,it seems that the price of trying to compete with these big clubs is eventual bankruptcy or failure , and this is hardly sport.
SirJimmySchoular
 
Posts: 1721
Joined: Sat Jul 21, 2018 9:52 pm

Re: How much promotion was worth to Cardiff

Postby JJ1927 » Fri Mar 15, 2019 1:46 pm

bluecityblue wrote:What does debt to equity actually mean? If Tan owns the club, and it owes him £70m odd, he then converts that debt into equity of something he already owns? Wouldn't that be like buying the club twice? Sorry if it's a stupid question but I've wondered this for ages.

By converting part of the debt into equity he effectively is giving up his right to have any call on the assets before or at the same time of the clubs other creditors. So if he is owed say £120 million and he converts £70 million to equity only the remaining £50 million could be paid to him before other creditors if the company was wound up. And only then if he has secured the £50 million on the assets of the company. If not he only has the same rights of the other unsecured creditors. He would only get paid at his £70 million equity if there was anything left- unlikely. The reason its done varies but it gives confidence to creditors, lenders and other parties that the owners have confidence in the clubs finances.

It may also help with the interest charge being lowered as I know we had problems with this last time with FFP rules. Interest isn't charged on equity but it is on debt and though VT waive the interest on that debt a couple of years ago, I believe the Football League took into account and it added to our reported loss for FFP purposes.
JJ1927
 
Posts: 517
Joined: Mon Sep 12, 2016 12:19 pm

Re: How much promotion was worth to Cardiff

Postby Sir » Fri Mar 15, 2019 8:58 pm

SirJimmySchoular wrote:It does seem that unless something is done to improve revenues progress can't happen .
The big six clubs have other world wide revenue streams so they can afford the players and salaries needed to compete properly in the premiership.
If something isn't done then we've probably already done as well as anyone in the circumstances could , which would be dissapointing and certainly unfair.

Off the top of my head I'd be putting 10% on all ticket prices straight away and planning the quickest practical extension to capacity in the break, ( subject to being in the premiership then of course).
I'd be looking for commercial stadium sponsorship and additional forms of sponsorship and advertising plus new kinds of merchandising and events management where corporate clients get a weekend being coached and meet some players .

Those outside the top six need to collectively approach the premier league to either improve their share of revenue or restrict the sound of the rich clubs, and play hard ball when they make that approach.

At present ,it seems that the price of trying to compete with these big clubs is eventual bankruptcy or failure , and this is hardly sport.


the club isnt run like a real business. by which i mean maximising revenue. we should have a stadium sponsor, and a real shirt sponsor.

putting season ticket prices up by 10% would raise a comparatively small amount of money, whilst pissing people off, and some would not renew. the stadium is a bit too big for our purposes as it is. spending yet more money on raising the capacity would not make financial sense. have you been under a rock for the past few years? if not, you would have seen our average capacity fall from over 27,000 in the 2013/14 PL season, to 21,000, then to 16,000.
Sir
 
Posts: 28
Joined: Tue Mar 05, 2019 8:09 pm



Return to General Chat

Who is online

Users browsing this forum: Bing [Bot], bluebirdrob, CF23 Bluebird, dogfound, Google [Bot], Google Adsense [Bot], Majestic-12 [Bot], maltablue, SirJimmySchoular and 220 guests

Disclaimer :
The views and comments entered in these forums are personal and are not necessarily those of the management of this board.
The management of this board is not responsible for the content of any external internet sites.