The true devastating cost of Cardiff City's relegation

The true devastating cost of Cardiff City's relegation and the repercussions that will be felt for some time yet


Sunday 5th May 2019


After a long battle against the odds, Cardiff City are finally relegated.

Saturday's 3-2 defeat to Crystal Palace sealed their fate on a deflating day at Cardiff City Stadium.

Amid all the emotion, there is also the cold hard financial impact to come to terms with.

The Bluebirds have been relatively conservative in recruiting new players compared to the last time they were in the Premier League, so what exactly will the financial costs now be?







TV money and parachute payments

This, of course, is the big one.

Overseas TV rights have been shared out equally between the 20 teams in the Premier League in recent seasons, working out at around £39million per club per season from the £3billion total package for 2016-2019. The even more annoying news for Cardiff is those figures are set to rise significantly again from next season under a new TV deal.

Domestic TV revenues have also seen Premier League clubs get a guaranteed figure of around £35m, plus at least £12m for live TV matches and further money based on finishing position. Cardiff City's likely finishing place of 18th is worth around £6million.

A pooled commercial revenue pot also pays out £5million per club.

So, big figures that start pushing even struggling clubs towards the £100million TV revenue marker.

TV rewards in the Championship are relative peanuts, even though a controversial new deal with Sky has been agreed by the EFL that should increase revenues for clubs.







What sort of loss are we talking about?

Last season, in their promotion-winning campaign, Cardiff City recorded revenues of £34.8million – a £6million rise on 2016/17, thanks to a large kick-up in sponsorship, advertising and other commercial income, possibly triggered by promotion.

Broadcasting revenues that season were £21.4million, up marginally from £20.6million the season before, with the club receiving the final instalment of Premier League parachute payments following their relegation in 2014.


Parachute payments under the system in place at the time were doled out over four years, compared to three now.

Cardiff’s broadcasting revenues will have skyrocketed this season, with match receipts almost certain to have gone up too as fans flocked to see Premier League football.

Using rivals Brighton as an example, their revenues leapt from £29million in 2016/17 to £139.2million in 2017/18 on the back of broadcasting revenues increasing from £7.7million to £110.3million, from being in the Premier League.

Matchday revenues and commercial income also rose in the single-digit millions thanks to lure of Premier League football.

Stoke City were relegated in 2018, and their broadcasting revenues from finishing 19th were a little under £101million – so Cardiff could possibly expect broadcasting revenues in that ballpark for this season, an increase of around £80million from 2017/18.








So, how much will Cardiff now lose?

Well, Middlesbrough, who were relegated in 2017, saw broadcasting revenues slip by around £55million to £46.3million last season, giving Cardiff a taste of what their income is likely to be, even with parachute payments.

On top of the broadcasting hit, gate receipts will be down in the Championship, which will have an obvious negative impact.

The likes of Steven Caulker were sold following Cardiff's previous stay in the Premier League
How are parachute payments worked out?

They are calculated based on the TV and prize money from the season in which the club are relegated: with 55 per cent of that figure handed out in the first year in the Championship, before falling to 45 per cent and 20 per cent in years two and three respectively.

However, a sticking point for Cardiff is that clubs which only spend single seasons in the Premier League before relegation are not eligible to receive the third instalment.








Player sales

Another worry for Cardiff is the club's profit on selling players has been pretty minuscule in the past couple of seasons, being only £2.4million last season.

Typically, clubs relegated from the Premier League rescue, or at least mitigate, operating losses through large gains on player sales, thereby avoiding the attention of the EFL.

In their previous first season after relegation, 2014/15, Cardiff were £9.7million up on selling players, as the club realised minimum profits following the quick turnarounds of the likes of Steven Caulker, Jordon Mutch and Gary Medel.

For reference, Newcastle made a £42.3million gain on offloading players in 2016/17 following their relegation.

Stoke City made a much more modest but still respectable £22.2million profit last season.








So who might leave?


Well, one player who is confirmed as departing is Aron Gunnarsson.

The Icelander is heading to the Middle East after eight years of stellar service in the Welsh capital.

As previously stated, when the Bluebirds were relegated from the top flight last time around a number of first-team members left.

Oumar Niasse and Victor Camarasa will return to Everton and Real Betis respectively, but in terms of other departures you'd have to say not that many will go, with Cardiff's squad already having a Championship feel about it.

The likes of Josh Murphy are attracting interest, while the superb form of Neil Etheridge, who has performed admirably between the sticks, could also see him become a wanted man.








The Warnock situation

Cardiff City manager Neil Warnock (Image: Gareth Everett/Huw Evans Agency)
Will the 70-year-old be in the dugout next season now?

This is what the manager said recently: "If Mehmet wants me to stay, I’ll stay.

"But it is one of those jobs where if they want me to go, I will go without any compensation or anything like that.

"It does not bother me about contracts. Because they have never talked about that, but who would they get who was better for the job than me if I was up for it?"

This campaign has understandably taken its toll on Warnock. The Emiliano Sala tragedy, which the former Sheffield United boss handled extremely well, pushed him to his limits. How could it not? It was an unprecedented situation which had unbearable consequences.

You would not blame him if he walked away at the end of the season.

If Warnock does want to stay, Cardiff City chiefs will have a big decision to make. Cardiff's future in the coming years will clearly go in a different direction from Warnock so you could argue an immediate change would be best. Then again, who better to get the club promoted from the Championship than the man who has done it so many times before?

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I think we are in a far better place than the last time we went down

I think we are in a far better place than the last time we went down

In think your right although I'm pretty sure that teams relegated in their first season only get one year of parachut payments now. Cant remember where I read that though.

I think we are in a far better place than the last time we went down

In think your right although I'm pretty sure that teams relegated in their first season only get one year of parachut payments now. Cant remember where I read that though.

I don't really look at it as a loss. We were promoted unexpectedly, so it was a windfall that will help us for a further two seasons.
We never gambled like last time so haven't expensive hangovers for seasons, we can quickly rebuild in the summer and make a sustained bid for a long term success.

I've really enjoyed this season, with some amazing highs. I expected us to be relegated but the fight the team has showed and winning 9 games has been inspiring. We go down as a cohesive club, a strong fan-base, players who will still want to fight and have things to prove, and 3 years of parachute payments estimated at £42m+ pa for 3 years. Am geniunely looking forward to next season and if NW wants to stay I am 100% with that, if he wants to pass the reins on, 100% with that too, he has been outstanding and is already a Cardiff City legend.

I think we are in a far better place than the last time we went down

Agree 2 or 3 midfielders in to replace gunnars arter and camarassa a striker as well and i would say we have the squad to challenge top 6

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

Devastating is the effect of losing a son,brother and well loved friend in a tragic accident.My team’s relegation to a more competitive ,less greedy, less elitist league is not comparable.We should be completely out of debt with the parachute payments and still be highly competitive in a more level competition.Throw in a few youngsters who play for the shirt and not a fat pay packet and I’ll enjoy next season more than this.

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

A very good way of looking at it and like someone else said,last time coming down we were in the financial brown stuff.We are considerably better off this time and maybe Vinnie will spend a few bob building on what is already a decent squad.

I think we are in a far better place than the last time we went down

In think your right although I'm pretty sure that teams relegated in their first season only get one year of parachut payments now. Cant remember where I read that though.

If you Google it its not clear but looked at Swansea and unless they've changed it this season its worth around 90m over 3 yrs 40m then 35m then 15m give or take couple millions but sure someone as better figures.

I think we are in a far better place than the last time we went down

In think your right although I'm pretty sure that teams relegated in their first season only get one year of parachut payments now. Cant remember where I read that though.

It is three years provided you have been in the PL more than one year. If like us a club lasts only one season in the PL the parachute payments are for 2 seasons only. I think they are £45m the first season and £35m the second season. I doubt our wage bill is anything near what it was last time we were relegated and I presume that all player contracts contained relegation clauses. If our turnover was anywhere near £140m then we must have made a healthy profit from our one year in the PL.

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

Absolutely correct

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

Absolutely correct

We have a nuclious of a good championship team but nw needs to sort out who he wants as got until start season to get in players as window closes then!

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

Absolutely correct

We have a nuclious of a good championship team but nw needs to sort out who he wants as got until start season to get in players as window closes then!

Last season he got his players in super early. Gave then all a good pre season together. And we started the season at a sprint (was it 7 wins from 7?).

This season went right to the wire with Arter and Camarasa last min!

I'm hoping for the previous...

To get the money on offer we have to get back into the Premier League at the first attempt. So don't hold back on recruiting quality players.

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

spot on mate..
how relegation from a division nobody { the owner/board } expected us to be in can be described as DEVASTATING is crazy.


we looked a good bet to go down from the second we went up

It's not a cost if we didn't have the money in the first place!

Would we be better off if we hadn't been promoted last year? No.

This season has been a bonus. Hopefully a bit of the PL cash can be used to sign a few quality midfielders.

Absolutely correct

We have a nuclious of a good championship team but nw needs to sort out who he wants as got until start season to get in players as window closes then!

Last season he got his players in super early. Gave then all a good pre season together. And we started the season at a sprint (was it 7 wins from 7?).

This season went right to the wire with Arter and Camarasa last min!

I'm hoping for the previous...

Well he did say recently that they looked st players for both scenarios so hopefully will be sorted sooner than later! Hopefully most of the present squad will choose to stay as they are really good championship standard couple of additions and optimistic about next season

we are in a much better position this time ,remember the tv money and parachute payments are a lot more this time, next season parchute payment is 63 million we didnt get that for the season in the prem last time ,minimum of 100 million thus season plus increased gates etc our turnover will be around 130 million it was 80 odd last time,we spent less and if its to be believed our wage bill is only 35 million half of huddersfield ,i think we are strong financially bow now compared to other championship clubs ,a bit of wheeling and dealing in the transfer market and it could be another successful season next year

It’s far from devastating I reckon, much better than last time with huge debts, countless useless players signed by ole on long contracts plus the money grabbers like caulker.....the extra sky cash just goes in agents and bigger wages anyway, you just balance it better and lesser in the championship. The same team that did it last time but with bobby Reid, Murphy, if he stays, Cunningham etc....hardly any debts now hopefully. The good ship ccfc is in good shape to go again, unlike last time.

It’s far from devastating I reckon, much better than last time with huge debts, countless useless players signed by ole on long contracts plus the money grabbers like caulker.....the extra sky cash just goes in agents and bigger wages anyway, you just balance it better and lesser in the championship. The same team that did it last time but with bobby Reid, Murphy, if he stays, Cunningham etc....hardly any debts now hopefully. The good ship ccfc is in good shape to go again, unlike last time.

agree

Not a devastating cost at all.

It’s like saying I didn’t win the lottery last night it’s a devastating cost.

We are a thousand times better off then last time we still have a squad who want to be here and will be at the top of the championship next season.

Two midfielders an a striker we will be good to go

Devastating ? Ridiculous word to use.
I’m not an expert on Ccfc, but you seem to have your finances under control these days, so relegation will obviously have some kind of impact, but that impact, certainly won’t be devastating.