Bournemouth & Cardiff's risky strategies
Tue Mar 02, 2010 2:07 pm
Re: Bournemouth & Cardiff's risky strategies
Tue Mar 02, 2010 2:28 pm
Good read- may help some of the blinkered laid back people reaslise how things are ! 
Re: Bournemouth & Cardiff's risky strategies
Tue Mar 02, 2010 2:42 pm
heres the Cardiff Ref for those who might be in work and cant open the link:
Cardiff are paying their taxes, but only just. Newspaper headlines last week made it clear that the recent sale of land adjacent to the club’s new stadium had “saved” them. Not that you’d think so from the extraordinary general meeting of Cardiff shareholders, held on Planet Ridsdale, at which the land sale was approved. Ridsdale had heavily trailed the line he was going to take at the meeting; that Cardiff were self-sufficient. “We haven’t borrowed a penny from the bank since I’ve been here,” he had told Five Live.
This was true, but hardly the truth, as the Guardian’s Matt Scott – on a roll after his comprehensive vindication over Notts County – took delight in exposing, listing the multiple mortgages and loans from other sources which have funded Cardiff. Among these other sources, of course, were fans who had participated in the “golden” season ticket scam…sorry…scheme. And shareholders used the EGM to question Ridsdale and his board on that.
EGMs are constitutionally bound to deal with one specific, pre-advertised item. But with fans calling for an EGM on general club finances, the club decided to make a financial presentation to shareholders at this meeting. This gave them an easier ride than a motion at a separately convened EGM. It’s cheaper, too – two meetings for the price of one. Finance director Alan Flitcroft unimpressively explained where the £2.6m season-ticket money had gone. And “largely, it’s gone, yes” he confirmed. The club had brought the money in by giving the strong impression that it would cover transfer window expenditure. When that was exposed as untrue (though not a “lie” because there was no intent, claimed Ridsdale, like it was a contentious handball decision) the strong impression was that the money would cover the tax arrears for which HMRC had petitioned the High Court.
But Cardiff only paid £1m prior to their hearing, which was adjourned for 28 days to let them find the rest. So where had the season-ticket money gone? “There have been significant costs since we launched the scheme,” Flitcroft noted, meaning ordinary wages and tax. This gave the strong impression that the club would not have been able to cover these without the season-ticket money.Lack of promised external investment was again blamed and Ridsdale reported that he was “talking to investors, talking to sponsors, talking to people with access to funding.” Since he’s been doing that for months with minimal success, though, his report was an admission of failure.
Flitcroft, pressurised out of grammatical logic by the situation, declared “with hindsight, I knew it was risky” to rely on investment promises. After all, Cardiff were hardly keeping promises themselves. Ridsdale was interested “that the most difficult questions came from people who are not shareholders (but were) there as proxies.” This was a clumsy attempt to portray the questioners as minority troublemakers, because “those that were there were complimentary about our presentation” (nice slides?).
But what was more than interesting was the absence of any strategy to deal with medium and long-term debt. The short-term problems have been “solved” with long-term money. What are the club going to do for money when that long-term becomes “now?” Ridsdale is banking, almost literally, on promotion to the Premier League and its attendant cash-not-so-much-flow-as-avalanche. With hindsight, that will be risky. And Preston didn’t help.
Cardiff are paying their taxes, but only just. Newspaper headlines last week made it clear that the recent sale of land adjacent to the club’s new stadium had “saved” them. Not that you’d think so from the extraordinary general meeting of Cardiff shareholders, held on Planet Ridsdale, at which the land sale was approved. Ridsdale had heavily trailed the line he was going to take at the meeting; that Cardiff were self-sufficient. “We haven’t borrowed a penny from the bank since I’ve been here,” he had told Five Live.
This was true, but hardly the truth, as the Guardian’s Matt Scott – on a roll after his comprehensive vindication over Notts County – took delight in exposing, listing the multiple mortgages and loans from other sources which have funded Cardiff. Among these other sources, of course, were fans who had participated in the “golden” season ticket scam…sorry…scheme. And shareholders used the EGM to question Ridsdale and his board on that.
EGMs are constitutionally bound to deal with one specific, pre-advertised item. But with fans calling for an EGM on general club finances, the club decided to make a financial presentation to shareholders at this meeting. This gave them an easier ride than a motion at a separately convened EGM. It’s cheaper, too – two meetings for the price of one. Finance director Alan Flitcroft unimpressively explained where the £2.6m season-ticket money had gone. And “largely, it’s gone, yes” he confirmed. The club had brought the money in by giving the strong impression that it would cover transfer window expenditure. When that was exposed as untrue (though not a “lie” because there was no intent, claimed Ridsdale, like it was a contentious handball decision) the strong impression was that the money would cover the tax arrears for which HMRC had petitioned the High Court.
But Cardiff only paid £1m prior to their hearing, which was adjourned for 28 days to let them find the rest. So where had the season-ticket money gone? “There have been significant costs since we launched the scheme,” Flitcroft noted, meaning ordinary wages and tax. This gave the strong impression that the club would not have been able to cover these without the season-ticket money.Lack of promised external investment was again blamed and Ridsdale reported that he was “talking to investors, talking to sponsors, talking to people with access to funding.” Since he’s been doing that for months with minimal success, though, his report was an admission of failure.
Flitcroft, pressurised out of grammatical logic by the situation, declared “with hindsight, I knew it was risky” to rely on investment promises. After all, Cardiff were hardly keeping promises themselves. Ridsdale was interested “that the most difficult questions came from people who are not shareholders (but were) there as proxies.” This was a clumsy attempt to portray the questioners as minority troublemakers, because “those that were there were complimentary about our presentation” (nice slides?).
But what was more than interesting was the absence of any strategy to deal with medium and long-term debt. The short-term problems have been “solved” with long-term money. What are the club going to do for money when that long-term becomes “now?” Ridsdale is banking, almost literally, on promotion to the Premier League and its attendant cash-not-so-much-flow-as-avalanche. With hindsight, that will be risky. And Preston didn’t help.