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The following has just been sent out to Trust members.
"Cardiff City Supporters' Trust Statement on Cardiff City FC
As many supporters are aware, the Trust has regular meetings with the directors and senior management of Cardiff City Football Club to discuss major issues which impact on fans, both on and off the field. These issues have included FFP (Financial Fair Play or Profitability and Sustainability as it is now called) and the conversion of the club`s debt due to Tan Sri Vincent Tan into shares with the aim of making the club debt free. Following recent meetings on these issues, the Trust is issuing the following updates.
FFP/P&S
This is a topic which has recently received extensive media coverage because of the case of QPR who face a potential fine of in excess of £50m for breaching the rules which were in place during their promotion season to the Premier League in 2013-14. There was a formula in place, known to QPR as well as all other Championship clubs, limiting allowed financial losses in that season. QPR exceeded the allowed level of losses to an extremely large extent, but the calculated fine could not be levied by the League until their subsequent relegation back to the Championship. QPR appealed against the level of fine, but were recently unsuccessful in their appeal and now face a level of fine which will have a major impact on their finances.
Some fans may argue that such a high financial penalty is harsh. However, the counterargument is that, unless blatant breaches are subject to severe sanctions, there is no incentive for other clubs to adhere to the rules either.
In the case of our own club, Cardiff City has continued to work extremely hard to ensure that the club is compliant and so not face the very real risk of such fines and other sanctions. This is not an easy task if it is noted that in season 2015-16 (the most recent publicly filed accounts) CCFC had the third highest wages bill of all clubs in the Championship (behind only QPR and Fulham). As fans, we would all like to see major new signings and the best players attracted to the club but this is only really feasible if increased revenue streams and favourable financial conditions are in place and the club`s management should therefore be congratulated in the work they have carried out to date in significantly reducing the wage bill whilst still retaining a playing squad proving itself to be more than competitive in the Championship.
We know that CCFC was compliant with the FFP/P&S rules as at March 2017 because as at that date the club had to submit three year financial information to the League to be vetted for compliance. This information comprised audited accounts for two years (2014-15 and 2015-16) plus projected results for 2016-17. In March 2018, the club will have to submit the 2016-17 audited figures plus an estimate for 2017-18. The Trust is not privy to the 2016-17 figures but our discussions with the club lead us to believe that there is every chance that the work done to further reduce costs will also result in an ongoing compliance position.
A word of caution, which is meant to be realistic, not pessimistic. Fans should remember that there will be no parachute payments available to the club after July 2018.This will result in a reduction of income for somewhere between £10m and £15m for next season and this loss of income has to be compensated for by other means – either additional income from other sources or by further cost reductions. Fans can help in this regard of course by making efforts to turn up for home games in greater numbers!
Conversion of debt to equity
The current position is that periodic conversions of debt into shares have continued since the commitment to do so was made in early 2016. Since the latest published accounts date of 31 May 2016 another £20.7m of debt has been converted into shares, the most recent conversion being in June 2017.
The Trust`s understanding is that Tan Sri Vincent Tan is committed to make the club debt free by further debt to equity conversions in the near future, subject to compliance with the regulations controlling such transactions.
Summary
The club continues to make strenuous efforts to make sure that it is not at risk of the type of problems facing QPR and perhaps other clubs currently in the Championship when they submit their results to the E.F.L in March 2018.
As fans, we need to be patient and understanding (as hard as that is as fans) when the club no longer spends fortunes on players transfer fees and wages. We need to get behind the team in as great a number as possible to help them on the road to footballing success and also assist on the financial front at the same time.
Keith Morgan, Chair"
Good news.
This doesn't seem to have worked however :
Some fans may argue that such a high financial penalty is harsh. However, the counterargument is that, unless blatant breaches are subject to severe sanctions, there is no incentive for other clubs to adhere to the rules either.
Good to hear the debt conversion is continuing. From the outside the club really does seem to be being run as well as it ever has, what a contrast to s few years ago. Also this really illustrates what a fantastic job Neil Warnock is doing.
And what a decent job Russell Slade did in all fairness (yes, the football was awful).Originally Posted by Barry Shitpeas
Yes , good to hear that £20.7m of debt was converted to equity in June 2017. As far as I am aware this had not been made public previously and it is great to see that Mr Tan is keeping his word and making these financial commitments to the club and without a lot of fuss over it either. This should keep some of the doubters happy for a while.
I know we have spent a lot , not by other clubs standard though, since NW has been here but we have managed to get a lot of players off the payroll who were probably on high wages, Huws, Adeyemi, Whittingham, Le Fondre, Noone, Macheda, Lambert, Saddi, Immers< Marshall and a load of yongsters too. And Manga on a reduced contract. I would imagine the players coming in would be on less money. It goes to show it takes years to recover from financial folly.
Good and bad news. Good news is debt to equity, bad news is if we arent promoted this year we are in the shit. Even a significant incease in gates would barely touch the amount we will lose in parachute payments. Austerity here it comes.
At least the club have been active in trying to sort the issue long before it becomes a problem. How well this has been done will be evident soonish, but at least its been recognised and confronted.
Agree. Slade deserves a lot of credit for the job he did.
All good news (except the reminder about the end of parachute payments).
I am interested to know how much debt Vincent Tan has converted to equity so far. This news of a further £20.7m in June is very welcome and it must now be adding up to a significant % of the debt owed to him. It isn't a conversion at the level or the speed that was implied when he made the announcement in (I think) February 2016 - before the issues with the Malaysian regulatory authorities came up - but it is major progress nevertheless.
And just missed out on play-offs, finishing 8th.
It was more of a capitulation. When we really had a chance Slade's tactics went defensive and negative. The draw aat Burnley away we showed we had it in us to maybe get in top 6. Then a run of spineless performances. Wednesday away last game was embarrassing. He may well be deserving of praise for reducing wages etc. But on the pitch management the guy was out of his depth.
Spedger
But still finished 8th! Football wasn’t brilliant but that side overachieved by finishing where they did Was he out of his depth, when he was virtually managing a fire sale, give him the credit he deserves for the job he was brought in to do.
I’m pretty sure I read there was just over £8m converted last year?
Maybe be totally wrong on that one mind.
QPR were found guilty in part as one of the directors wrote off loads in one go, from memory. Maybe that is why it's not as quick as people would want.
I know people didn't l
I know people hated the rebrand but I'm amazed that Vincent Tan converting 20 million debt to equity has turned into a "let's give the PE teacher some credit thread!
I do give him credit for the job he was supposedly brought in to do (never saw any official statement from the club to say he was brought in to reduce wage bill/reduce playing staff etc). But I felt the team and management rolled over after getting us in and around the play off places at the business end of the season. The latter is my criticism and rightly or wrongly a lay the blame at Slade's door.
Spedger
16000 gates not helping.
Very poor support
If we dont get promoted we will have to sell our best players
You are at the wind up again.
No doubt about it
In years to come it will be seen as a life saving few years financially , he shipped so many out ,and kept us up, yep not pretty , it's easy to have a dig at an unpopular person , not so easy to see the bigger picture or reason why.
Slade was all right , it was the massive spending of Jones and malky that screwed us up
Jones paid out huge wages
Well, Ridsdale but get your point.
It was a balance - during the Ridsdale / Jones era we paid high wages but spent little in transfer fees. That balances out to a degree.
Under Mackay / Tan, high wages were given but fees were higher than the previous regimes.
Let's be a bit more honest, here. We had a ridiculously large squad because of Solskjaer having the club chequebook. Slade was forced to offload most of the top earners but was still left with a squad that was more than decent for the Championship. It wasn't as if we sold anyone worth selling and had to scratch around the transfer market for bargains. We still kept a nucleus of good players. In fact, Slade's record in the transfer market wasn't great - given he had a good record for finding good youngsters, little of this happened during his tenure.
Only in Mackay's second season did we spend big. Much of that was due to directives from above - Tan gave Malky 3 years to get promoted, but due to our success in his first season he gave him only 1 more year to take us up and bankrolled it. Funnily, most of the big money spent wasn't so successful for us!
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