Trust Chair's Analysis Of Cardiff City's Latest Accounts

Last updated : 11 March 2023 By CCFC Trust

Trust Chair Keith Morgan, a football finance expert, comments on the latest Cardiff City FC (Holdings) Ltd accounts for the year ended May 31, 2022.

The accounts were signed off by Chair Mehmet Dalman on February 24, 2023 and the accompanying group strategic report by CEO Ken Choo on the same date. The audit report was signed off by auditors BDO on  February 28, 2023.


The accounts show an operating loss for the year of £28.9m (2021 £12.1m) and a loss after tax of £26.6m (2021 £12.0m).

As a consequence of the above losses and other adjusting transactions the balance sheet deficit as at May 31, 2022 rose from £36m as at May 31, 2021 to £56m.

Profit and loss account

Turnover fell dramatically in the year from £55.2m in 2020-21 to £20.0m as a consequence of losing income from “parachute payments” and despite an increase of £3.5m in gate receipts in the post-Covid pandemic period.

Efforts were clearly made to reduce operating costs to try and offset at least part of the loss of income with player salaries down by approximately £4m although it should be noted that the majority of player salary savings would have occurred after the balance sheet date with 11 players whose contracts had expired coming off the payroll in June 2022. The 14 players brought in to replace them (and 3 other loan signings) were at significantly lower salary cost.

Administration costs were down by £11.4m from £30.9m to £19.5m. This was principally due to a reduction in the cost of amortising (depreciating) and making an impairment provision for the playing squad where this cost reduced by £11m compared to 2020/21. There was a profit on player sales of £4.2m (2021 £2.9m).

Interest payable in the year of £2.4m was slightly up on the 2021 figure of £1.9m

Directors` remuneration was down significantly to £143k (2021 £550k) with the highest-paid director paid £121k (2021 £413k).  The reduction is almost certainly as a result of the CEO Ken Choo moving to a part-time role at the club.

Balance sheet

The value of the playing squad as at May 31, 2022 had been written down to £2.5m from a value at the previous year end of £10.5m. Player addition costs in the year were only £1m with players originally costing over £14m leaving the club at a profit of £4.2m compared to their written-down value.

The club`s stadium asset stood in the accounts at £76.7m.

As at May 31, 2022 a total of £7.7m was due to the club, including £4.6m of football receivables

The main liabilities in the May 2022 balance sheet were amounts of £73m due to Vincent Tan and his family and £20.8m due to Tormen Finance, a company in which Mehmet Dalman has a significant interest – this loan carries interest at 9%. This amounted to £93.8m of total debts due of £123.4m (up from £113.4m in 2021). The balance of debts due included £12m of accruals (including season ticket money received in advance), transfer fee installments payable of £2.6m and the remaining balance of an EFL pandemic support loan of £5.5m.

There continues to be full provision in the accounts at £20.7m for settlement of the Emiliano Sala dispute with FC Nantes, as has been the case since 2019.

There are important matters to note in respect of the debt due to Vincent Tan

a There were new loans of £19.8m made by him in the year, with repayments to him and his family of only £1.1m

b In the year he converted £6.6m of debt due to him into shares

c Just after the year end, in June 2022 he converted a further £19m of debt into shares

d Of the total due to Vincent Tan £51.2m carries interest at 7% and rights to convert into shares. The rest carries no interest and has no conversion rights. Interest payable has always historically been waived by Vincent Tan.

Contingent liabilities

The Companies Acts require companies to disclose material liabilities which might arise in future, dependent upon certain events occurring. In the balance sheet notes is a disclosure of a potential liability of £4.9m relating to player contracts. The notes state that such events will probably not occur so no provision is needed for this in the balance sheet.

Related party transactions

In the year consultancy fees were paid to WMG Group in respect of the services of Mehmet Dalman and £1.7m was paid in loan interest to Tormen Finance.

Post balance sheet events

Some significant events have occurred between the May 31, 2022 balance sheet date and the date the accounts were signed off by the directors on February 24, 2023 which are noted in the accounts

a As noted above, Vincent Tan converted a further £19m of debt into shares

b Further loans of £24.4m were made to the club at 9% interest by an unnamed party

c New players were acquired at a cost of £5.4m

d Legal actions regarding the Emiliano Sala case are ongoing

Other matters

The directors’ reports accompanying the accounts reveal two other important points

a The club is negotiating with the EFL to have the current transfer embargo under EFL rule 52.6 fully lifted.

b Plans are progressing for the construction of a new training facility for sole use of the club first team to be held under a 150-year lease with the aim of completion in time for the 2025-26 season. This is not the same facility currently being developed in Llanrumney for the club to utilise for its Academy teams