Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of! Football Finance

Thin ice at Cardiff?

Posted by John Beech on August 18, 2010

The news of Craig Bellamy’s loan to Cardiff City, coming as it does on top of five other signings (Koumas, Heaton, Drinkwater, Oloinjana, and John), will have done much to lift the spirits of Bluebirds fans, and to offer them hope that this year they will make it to the Premier League following their recent disappointment.  Excitement in Cardiff has “seldom been so tangible” (1).  In the broader picture, the club now has the backing of Malaysian investor Dato Chan Tien Ghee (aka TG) too of course.

But is all as well with the club as might at first glance seem?

The recruitment of Bellamy has provoked a furious reaction North of the border, in Motherwell to be precise.  The background to this is the transfer of Paul Quinn from Motherwell to Cardiff last July for an estimated fee of £300,000 (2).  At the time Motherwell were in a CVA, having previously been in Administration.  Having turned small profits since agreeing the CVA in 2004, for 2008/09 the club had made a loss.

As is often the case, payment was agreed to be over a period of time.  Motherwell were due a payment of £100,000 last January and a further £75,000 this summer.  Neither payment has been made, and Motherwell are now claiming interest additionally.

Cardiff meanwhile have of course been through a traumatic period (see postings passim), appearing regularly in court to ward off winding-up petitions from HMRC.  On the other hand, there has been the much vaunted arrival of TG with a £6m investment at the end of May (3).  Not that the club’s woes immediately disappeared – they were last in court against HMRC just over a week ago (4), and the transfer embargo was only lifted the week before (5).  It was the subsequent spree of signings that have prompted Motherwell’s actions, although almost a month ago they had made clear their dissatisfaction with the fact that the Quinn debt was outstanding (6), declaring then “We have made clear to the board of Cardiff that we are left with no option but to pursue every possible avenue of recourse to secure our own club’s interests“.  Cardiff Chief Executive Gethin Jenkins responded by saying “We are fully aware of the debt owed to Motherwell and we are working to resolve the issue as soon as possible“.  Not quite hard enough it would seem.

On Friday Motherwell issued a writ against Cardiff City (7), with no-one from Cardiff City apparently attending the hearing at Hamilton Sheriff Court.  They did however offer to pay the money by installments – erm, isn’t that precisely what they have failed to do so far?  Motherwell Chairman John Boyle said “We’ve followed every football and legal regulation and we’ve been messed around. The bailiffs are coming towards Cardiff; be afraid. We will use every legal means at our disposal.”  Jenkins’ rather low-key response? “I see they jumped in ahead of us.  Our lawyers have been in communication with them and it will be resolved within the next seven days“.  Cardiff manager Dave Jones was reported this morning on BBC Radio Wales as suggesting dismissively that Motherwell were seeking “an opportunity to get on television“.

Motherwell are thus presenting themselves as the ‘David’ of the pairing, against ‘Goliath’ Cardiff, who barely seem to acknowledge that there is any problem.  By failing to score in the first half of the public relations game, Cardiff are in serious danger of giving the impression that they either can’t pay or won’t pay – either still on shaky financial grounds or cavalier in their attitude to paying for a player whose service they have had for a year.  Either way, it’s hardly an impression I imagine they would want to give.  It will not help them when they next dabble in the loan or transfer markets, and it gives easy ammunition to HMRC should they face each other again in court.  Not a smart move, as I would imagine that Cardiff’s scalp is up there with Portsmouth’s and Southend United’s as one they would dearly like to claim.

As a final thought, I am wondering what role, if any, Peter Ridsdale has played in the summer spending spree that kick-started Motherwell into action – when he stood down as Chairman in May, it was reported that he was “set to have a big hand in the Bluebirds’ transfer dealings this summer” (8).

UPDATE – 18 August 2010

Cardiff’s acquisition has attracted the attention of the Football League (A).  The club has been asked to prove they have the means to fund Bellamy’s loan move.  Without these assurances the League may refuse to register Bellamy.

Good to see this move.  As FL Chairman Greg Clarke says “Our job is to make sure there is an integrity of competition, that people don’t take on liabilities they cannot meet“.  Heaven forfend.

With an almost Risdalesque sense of self-rectitude, the club complains of Clarke “We are disappointed that he’s chosen to discuss these matters in public and will be in contact with the Football League on Thursday morning“.  No sense of having created the situation themselves then.  But at least slightly more sense of urgency than they have shown in dealing with Motherwell.


4 Responses to “Thin ice at Cardiff?”

  1. John Beech said

    Cardiff City have said of the Bellamy deal “This deal has been fully supported and underwritten by our Malaysian investors who have shown unprecedented support since joining the club” (1), which begs the question of why this support has not extended to the Quinn deal which the club was already committed to.

  2. I know you have seen my more simplistic version of this (and my Pompay part also ;-)) but it stands being restated, Cardiff City fans are on the verge of making the same mistakes as last season, assuming all is well, trusting the owners and directors and ultimaily finding their optimism was misplaced.

  3. John Beech said

    The Football League has now cleared the Bellamy signing (1). Motherwell are meantime holding back from further action in anticipation of Cardiff chief executive Gethin Jenkins keeping his word that they will be paid by Tuesday.

  4. John Beech said

    Latest from Cardiff is that they have paid the debt to Motherwell (1). Chief Executive Gethin Jenkins says “We also understand we need to establish new credibility and engage with the supporters and businesses in South Wales and the larger community in order that they can engage with us. To date significant cash investments have been put into the club to pay down historical debts and creditors, and TG and Vincent Tan have committed to resolving the other issues faced.” He also says, adding confusion where there seemed to be clarity about where the money tp pay Motherwell has come from, “as a result of the increased cash flow with the interest since Craig Bellamy’s arrival we have now paid half of the money owed to Motherwell” (2).

    Ambitious plans have been announced to expand the stadium (see postings passim) at a cost of £6m. The same report states that “Dato Chan and fellow Malaysian investor Vincent Tan are backing City’s chase for Premier League football – and they are personally paying Cardiff’s £21,000 share of Bellamy’s weekly wages“. Financial doping is thus alive and well then. Let’s hope for the fans sake they have no plans to play in Europe, where they will fall foul of the Financial Fair Play protocol.

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