Cardiff City Debt Rises to £83m

Championship football team Cardiff City have recorded losses of £13.6m ($21.5m), symptoms taking their overall debt to over £83m ($131m).

Rising administrative costs and interests on current loans have contributed to the figures, ailment despite the club earning £2.3m ($3.6m) in turnover from their Carling Cup final appearance against Liverpool and turnover being up from £15.9m ($25.1m) to £20.2m ($32m).

Additional costs were raised when the club sacked their former manager Dave Jones and hired current manager Malky Mackay. Around £1.6m ($2.5m) was spent sacking Jones and his backroom staff.

Cardiff City Football Club (Holdings) Limited, the umbrella company incorporating the club, owes £51.9m ($82m) to creditors in the next year and £31.2m ($49.3m) to creditors in the following  year. £37.4m ($59.2m) of that however, is owed to Vincent Tan, the club’s Malaysian backer.

In the report, directors said: “Whilst the dream of reaching the Premiership wasn’t realised, increased revenues and some improvement in operating performance was achieved.

“The results for the year to May 2012 include the impact of reaching the Carling Cup Final at Wembley which contributed almost £2.3m to turnover for the year.

“The club continues to face the challenging financial environment presented by the Championship competition, as illustrated by the operating loss year-on-year, despite significant turnover growth – these gains being absorbed by increased direct football costs.”

In 2012 the wage bill also increased from £13.9m ($22m) to £18.5m ($29.3m), despite the figures not including big transfers made recently.

City directors went on to add: “Through the continued support of our Malaysian investors we have invested in the playing squad and hope to see the benefit of that investment during the remainder of the season as we push for the desired aim of promotion and beyond.

“For the 2012/13 season the club made a strategic decision to change the colour of its home strip from blue to red but retained the blue strip for away matches.

“Accompanied by a change in the club’s badge, the rebranding is seen by the club as a positive step in securing future commercial opportunities.

“The new investors have indicated that providing the business develops as planned, they will continue to support the club in the foreseeable future and provide additional finance in order that it can settle its liabilities.”