By David Owen
March 1 – Cardiff City’s Bluebirds may recently have reverted back to their traditional blue home shirts, but when it comes to their accounts they are still in the red. The Welsh club’s brief excursion into the Premier League last season resulted in a near five-fold increase in revenue from £17.3 million to £83.1 million. But, as shown by its recently-published financial statements, not even this was enough to push the club into profit in the year ended 31 May 2014 – although the pre-tax loss did dip sharply from £30.4 million to £12 million.
The massive jump in broadcasting receipts following promotion in 2013 was, of course, the main factor behind the revenue spurt, with centralised broadcasting and commercial distributions catapulting from just £4.9 million in promotion year to £64 milllion – 77% of the total. Sponsorship, advertising and other commercial income rose from £6.2 million to £10.9 million; with average attendance climbing from around 23,000 to nearly 27,500, gate receipts and match day income climbed from £6.2 million to £8.3 million – less than 10% of the total.
Payroll costs understandably rose sharply from £32.8 million to £53.2 million, while a £5 million-plus loss on disposal of player registrations also didn’t help. The club also incurred just over £2 million of exceptional costs relating to “the change of football and senior management” – presumably the switch from Malky Mackay to Ole Gunnar Solskjaer in the manager’s hot-seat, which took effect between December 2013 and January 2014.
The club – who have already parted company with Solskjaer and, after relegation, appear condemned to at least one more season in the Championship, English football’s second tier – is majority owned by Tan Sri Dato’ Seri Vincent Tan Chee Yioun, better known as Vincent Tan (pictured). Notes to the accounts showed that the club has about £157 million of current and non-current liabilities, £130.3 million in the form of “loans from overseas shareholders and associated undertakings”.
Under this heading, the accounts noted that the group received loans during the period from its main shareholder, Tan. The loans are said to be convertible into equity at a fixed conversion price of 15.69p a share. While interest accrues at an annual 7%, total interest due to 31 May 2014 was said to have been waived in September 2013.
In addition, Torman Finance, a company which has a common director with the club, was said to have advanced £7.5 million during the year at an interest rate of 8%.
The accounts disclose that the club will from this month start to incur an annual rental charge of £180,000 on Cardiff City Stadium, whose land is held on a 150-year lease from Cardiff City Council. The council, which provided a capital contribution towards the cost of the stadium brought into use in 2009, also received a one-off £720,000 payment on the club’s promotion to the Premier League.
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