Thursday, 7 June 2012

The Death of the Bluebirds

Marcus Stead is a lifelong Cardiff City fan. Like many Bluebird traditionalists, he's outraged at the decision to change the kit from blue to red next season. Here on Soccermongery, he discusses the background to the club's recent history.

Traditions are like trees. They take years, even decades to grow and develop, but can be destroyed forever by one quick act of vandalism. For this reason, Cardiff City fans, and indeed the football community in general, should be extremely concerned by the announcement that the Bluebirds are no more and in future, they’ll be kitted out in red.

The concept of Cardiff City playing in red is as crass and as out-of-place as blue London buses or a bride walking down the aisle in black.

It’s worth taking a moment to look at what has led to this announcement, and what has actually been promised in return for the change. The club has massive debt problems, which date back to Sam Hammam’s time as chairman, which began at the end of 2000. At the time, as a 16-year-old, I felt like the only person in Cardiff who had reservations about this man taking over the club. For me, he conjured up memories of Wimbledon ending up homeless for years, which eventually led to the club relocating to Milton Keynes. There was also a nasty edge to the ‘Crazy Gang’ culture at Wimbledon, which Hammam embraced and encouraged. I was concerned about what he had in store for Cardiff City.

Ridsdale doing that Hammam thing
When he arrived at Cardiff, it didn’t take long for Hammam to show his true colours. Characteristically, he sucked up to the club’s hooligan element, which led to the disastrous events that marred the club’s FA Cup third round victory over Leeds Utd in January 2002. I was in the audience of ‘Any Sporting Questions?’, coincidentally held in Cardiff a few days later. The hooliganism was the main topic, while the astonishing Cup win was barely discussed.

Furthermore, the way Hammam ran the club was absurd from the start. He spent cash to get the team out of the lower divisions, knowing full well that it would cost the club more every year than it was actually bringing in. He anticipated losses of between £1 million - £1.5 million each year.

He wrongly believed that despite losing money each year, the building of a new multi-million pound stadium would result in new assets being created, both on and off the pitch, which would in time swallow up the debt.

In fact, the losses were far higher than Hammam anticipated, totalling somewhere between £3 million and £4 million each year. The club were borrowing, through Hammam, from Citibank, who wanted their money back. To prevent the club from going under, Hammam set up a hedge fund called Langston to take on the debt and purchase the loan notes. It’s very unclear to what extent Hammam is in control of Langston but he has certainly acted as a mediator between them and the future owners of the club in the years since.
Black and white but Cardiff's greatest moment is in blue
Hammam’s financial planning for the club depended on him being granted permission to build the new stadium, but Cardiff Council did not do this at the time due to concerns over financial security. With the club’s finances in a mess, Hammam interviewed three people for the position of financial consultant, one of whom was Peter Ridsdale, a man experienced in running, or more specifically, ruining football clubs.

In the previous few years, Ridsdale had taken Leeds Utd and Barnsley to the brink of disaster. It quickly became clear that Ridsdale and Hammam had very different visions, and, after a bitter boardroom meeting, Ridsdale’s company, PMG, effectively took control of the club.

When and how Langston would receive their money has been a contentious issue that has held the club back ever since, with near-constant threats of court cases, winding up orders and possible takeovers. The debt owed to Langston is estimated to be worth around £31 million. Ridsdale was a nightmare chairman in a different way. He flirted with disaster while trying to build up a promotion-winning side. In other words, he was behaving in a similar way to his time at Leeds.
Most Bluebird fans' worst nightmare.
During his three-and-a-half years as chairman, the club fought off four separate winding up orders. He also lied to fans when, at Christmas 2009, he offered season ticket holders the chance to renew for the following campaign at a discounted price, with the promise that the money raised would be made available to then-manager Dave Jones to spend on players.

It turned out that Ridsdale instead spent the money on repaying debts. When Ridsdale left the club in May 2010, the club was estimated to have £30 million of debt. On 16 June that year, the club faced a fifth winding up order over a £1.9 million unpaid tax bill.

In fact, the debts were far, far worse than Ridsdale was letting on. Accounts for the year 2009, released in August 2010, showed that the club’s actual debt was £66 million. The Malaysian consortium, headed by Dato Chan Tien Ghee, paid £6 million for a 30% stake in the club that summer. This payment was clearly only a fraction of what was needed to put the club on a stable financial footing.

The ‘front man’ for the Malaysian consortium is billionaire businessman Vincent Tan, who has built up a vast empire in his home country, with interests ranging from golf courses, a gambling company, and a pay TV outlet, as well as having close links to the extremist former Prime Minister of Malaysia, Mahathir Mohamed, who has a long track record in vile racism and human rights abuses. The new owners wasted little time in making it clear they had little interest in the club’s heritage. First to go was the small Welsh flag on the back of the shirt, which had been a permanent presence for some years. Can anyone REALLY imagine a potential supporter in the Far East being put off by the presence of a tiny Welsh Dragon on the back of the shirt? Is it that much of a marketing disaster? Try telling that to the owners of the Mumbai Indians, an IPL franchise that was created a few short years ago with the aim of having a global appeal. Next, the word ‘Malaysia’ became the club’s main shirt sponsor.

The fans were willing to put up with this, taking a pragmatic approach that if this was what was needed to put the club on a secure financial footing, it was a price worth paying. However, it wasn’t long before the next financial crisis loomed. With the situation with Langston still far from resolved, there was more bad news when it was revealed that around £175,000 was still outstanding to Motherwell relating to the transfer of Paul Quinn. Half the money was paid off, with the rest still outstanding, as far as is known. The plans to completely re-brand the club were first leaked last month. The deal, as reported at the time, would see the club’s debts paid off, or at least better controlled, with £100 million made available to manager Malky Mackay. Supporters were in uproar, and the plans were dropped within a few days. Of course, £100 million is small change by Premier League standards. Once it had been spent, that would have been that, and no long-term plan was in place to keep the club on a secure financial footing.

The plans were quietly resurrected during the Jubilee Bank Holiday weekend, but this time, it was done in such a way that meant there would be no consultation, and they were going ahead whether the fans liked it or not. 113 years of playing in blue were over, just like that. The apparent advantage of switching to red is that it will attract a huge new fanbase in the Far East, where superstitiously, red is a lucky colour. The timing was also significant. There was not the backlash of a month ago, with many fans now on holiday, or enjoying the Jubilee break, while the football media’s attentions were very much on Euro 2012. Yet what exactly is being proposed in return for destroying the club’s heritage?  

There is no £100 million spending spree being promised this time around. The wording of the news release is interesting. It says: "As part of this commitment, funds have been earmarked to finally resolve the historical Langston debt issue which for so long has cast a dark cloud over the club and its future. "Negotiations have been continuing and a final offer has been made to those representing Langston and [former club owner] Sam Hammam which we believe is both fair and reasonable." “The club plan to invest in a new training ground and facilities, and will look into the feasibility of expanding the stadium. "Our investors have also fully reaffirmed their support to enable [club manager] Malky Mackay to strengthen his squad for the season ahead in line with the viable and prudent budgets agreed with him."

The rest of the press release is so full of platitudes and clich├ęd that it is not worth repeating on here. There are no concrete plans in place. Absolutely nothing has been guaranteed. It’s carefully worded, and is full of phrases like ‘plan to’ and ‘look into the feasibility of’.

Furthermore, what happens if Langston and Sam Hammam reject the offer that has been made to them? I also can’t help but think back to that excellent Channel 4 ‘Dispatches’ documentary that was broadcast last year, titled ‘How to Buy a Football Club’. The formula was relatively simple to understand: Buy a club with potential at Championship level, sometimes lower (Leicester City and Cardiff City’s names featured prominently), get them promoted to the Premier League, and sell them on at a huge profit, with scant regard for the club’s finances or long-term future.

It would be wrong to assume this is the agenda of the Malaysian investors, but we do have to ask why they were so interested in the club in the first place. Much as I hate to say it, the club does not have the prestige of, say, Manchester United or Liverpool. Cardiff City have not played in the top flight since 1962. Furthermore, Cardiff is not a ‘global’ city in the way London is. It is only really recognised by the general population in countries that have a strong rugby union heritage, because of experiences at the Millennium Stadium or the old Arms Park.

Those who support the change to red state that there is no alternative but to go along with whatever the Malaysian owners want if the club is to have a future. But this brings into play a wider issue – the state of football in general. The truth is that, in 2010, 60% of English professional football clubs were insolvent, including some in the Premier League. The owners of these clubs are cheating. If you can’t pay your bills, that means you are insolvent. It is a criminal offence for directors of companies to trade insolvently. This sort of lunacy simply cannot continue long-term, and the very survival of the national game may well depend on more stringent measures being put in place to force clubs to get their houses in order.

Cardiff City was firstly a victim of Sam Hammam taking absurd risks with the club’s finances, followed by Peter Ridsdale, who had his priorities all wrong and spent money on the team instead of keeping the tax man and creditors at bay, and the failure to achieve promotion as a result of this only made the situation worse. It’s hard to know what exactly is motivating the Malaysian owners, but the proposals are far too vague for my liking. The change to red means the club’s soul has been lost, quite possibly forever.

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