Cardiff City to hit Premier League jackpot
- 17 April 2013
- From the section Wales
Promotion to the Premier League in the modern era has always meant hitting the jackpot but even more so than ever next season.
BT will be showing 38 live matches for the first time and in order to do that the company entered into a bidding war with Sky. As a result, it pushed up the television revenue available to the clubs.
The deal, including the international rights, is worth more than £5bn over the next three seasons.
For Cardiff City, it means that its revenue is likely to quadruple from a current £20m to an eye-watering £80m.
Around £60m of that total will be from the TV rights alone, which means the club becomes bigger than the Welsh Rugby Union.
The club currently loses money in the Championship with latest figures for the year to the end of May last year showing it lost £13m.
With such a huge rise in income, it should be able to turn in a profit but that will depend on keeping a lid on costs.
The wage bill, which last season rose from £13m to £18m, could easily double next season with potential transfer fees having to be paid as well.
Latest figures show just five Premier League clubs made profits in the season 2010/11 but new financial regulations coming in next season are designed to keep costs under control.
And then there are the debts which the latest figures show stand at £83m.
Cardiff City's Malaysian owner Vincent Tan - who has made hundreds of millions of pounds from fast food franchises and owning the country's biggest lottery - says he has put in around £75m so far to buy players and stem losses.
The vast majority of that money is in the form of loans to the club.
Mr Tan says he will clear that debt by swapping it for more shares in the club, but he says he'll only do it after a deal has been struck to clear an existing debt of £19m to Langston, a Swiss-based company linked to Cardiff City's former chairman Sam Hammam.
Mr Tan has already offered Mr Hammam a place on the board, and shares in the club, as well as money but a deal has not been struck.
Mr Hammam is due to receive £5m from the club's promotion to the Premier League so unless the matter is sorted this summer, the debts will remain on the books as Cardiff City enters the Premier League.
If a deal can be done, then the prize will be a place at the top table, largely debt-free which is the enviable position Swansea City finds itself in.
The difference will be that Cardiff City would have received tens of millions of pounds from a Malaysian tycoon to have got there.
There will inevitably be wider economic benefits from reaching the Premier League but they are virtually impossible to quantify.
Probably the biggest benefit will be the huge international profile it gives Cardiff, and Wales, as it boasts two clubs in the world's richest football league.
Planning for future
Meanwhile, Steve Borley, a former chairman of Cardiff City who is still a member of the board, said the "world has changed" for the club.
"Today we need to start planning for the future," he said.
He insisted that the club was ready to face the challenges of the Premier League with its previous financial worries now in the past.
"I think when you look at the structure of the club, everything's come together," he told BBC Radio Wales.
"We're top of the league, our development squad is top of the league, we have a brand new stadium and infrastructure behind us - everything's come up at the same time and I think we will be well placed to face the challenge.
"And we have every chance to make a success of the Premier League."