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There has been a lot of talk about the latest transfer window. Trust chair Keith Morgan sets out the issue of profitability and sustainability in a message to Trust members.

 Dear Member

You will recall that, in my last communication to you after the meeting called by Mehmet Dalman prior to the Preston game. I undertook to update you on the current situation regarding Profitability and Sustainability (formerly known as FFP). I have now been able to clarify some issues so here is my summary of the current situation and its impact on the January Transfer Window. 

There has been quite a lot of criticism on social media about the club only making player signings very late in the transfer window and missing out on “first-choice signings”, so I thought that this brief explanatory note might be helpful.

Since March 2022 the monitoring of club finances in the EFL has been carried out by a separate independent panel of qualified accountants called the Club Financial Reporting Unit (CFRU). It is they who decide whether EFL clubs are in an adequate financial position to have transfers authorised and to what extent. Their rules have become increasingly strict and their monitoring checks far more frequent recently.

The basic rules have not changed much. EPL and EFL clubs are monitored on the basis of the losses they incur. If losses are below £5m on average over a rolling three-year period then no further checks are made. Greater losses are allowed if the difference is made up by new cash introduced and funding guarantees by club owners so that the average is increased to £35m in the EPL and £13m in the EFL. In Cardiff City`s case the “top up” has been made by new cash introduced by Vincent Tan by way of paid-for new share issues.

There was a further restriction introduced in June 2023 in that if a club is even a few days late in paying its HMRC debt then this has to be reported as a Default Event and the EFL can introduce an immediate transfer embargo until the matter is sorted.

The impact in January was that the CFRU only gave clearance to a number of clubs very late in the transfer window. As a consequence, there were more Championship club transfers in during the last two days of the transfer window than in the whole of the rest of the full month.

Keith Morgan

Chair

The latest Trust magazine is about to be delivered to members.

In our main feature article, Peter Jackson, distinguished journalist and former Cardiff City reporter for the South Wales Echo, recalls the club’s efforts to qualify for European competition from the bottom end of the then Division 2. Those fans of Cardiff City today concerned about the club’s form might be interested to learn that over 10 weeks back in the 1960s the Bluebirds went 10 games without a win with just two draws and the rest losses. There are also Bluebirds-related pieces from Rob Jeffery, Paul Evans and David Collins, so plenty to digest.

And, of course, there is the usual Bluebirds Brainteaser quiz for members which comes with a £50 prize.

Note of Meeting with Mehmet Dalman February 10th, 2024

Prior to kick off on Saturday, the Fans Advisory Board (FAB), of which myself and Mike Spear are members, were invited at short notice to a meeting chaired by City Chairman Mehmet Dalman. Also in attendance were Ken Choo (Chief Executive), Steve Borley (Director) and various Heads of Department at the club.

The meeting was informal and was an opportunity for Mehmet to meet with FAB members including those recently elected who may not have met senior officials of the Club before. There was no fixed agenda and the floor was open to questions on any subject. Inevitably, the January Transfer Window was discussed at length.

Mehmet emphasised that player negotiations had taken place throughout the month but, as is usually the case, could only be concluded in the final days with some transactions going to the wire. He stated that the Club’s transfer activity, in the context of the Club’s financial position, was under close scrutiny by the EFL under Profitability and Sustainability Rules (formerly known as FFP). Members will be aware that there is a new focus on Profitability and Sustainability and all EFL clubs were under the same level of scrutiny during the last Window. I will be preparing a separate detailed note on the new approach to the rules governing the financial viability of clubs and will circulate it to members in due course.

Keith Morgan

Chair

Keith Morgan, Trust Chair

Trust Chair Keith Morgan writes to members about the settlement of legal action against football agent, Willie McKay.

“You will recall we wrote to you last month to let you know that Cardiff City was suing Willie McKay, who was involved in the transfer of Emiliano Sala from FC Nantes.

“The action was to retrieve documents and correspondence relating to McKay’s relationship with FC Nantes to support the club’s claim against the French club (Nantes’ defence was based on a claim that they didn’t know him).

“As you may have seen in the media this week, legal action by Cardiff City against McKay has been settled out of court although the terms of the settlement are covered by confidentiality clauses.

“However, it now appears that the club’s lawyers have recovered the information they wanted to strengthen their legal case against Nantes.

“We believe this will considerably aid the club’s case against Nantes and the Trust hopes it will bring the case against Nantes closer to a conclusion, which we welcome.”

Keith Morgan, Trust Chair

Trust Chair Keith Morgan has spoken to senior sources at Cardiff City Football Club to get clarification following issues raised by Bluebirds fans on social media.

Keith Morgan said: “Having had a conversation with senior club officials, I thought it would be useful to update members on the current position regarding player transfers etc. at Cardiff City Football Club to clarify a few misconceptions on social media over the last few days.

“The club directors are working in close cooperation and agreement with the manager and recruitment team to bring in new players either on loan or permanently and a number of potential deals are at an advanced stage.

“Deals are never straightforward as they have to be agreed with the players involved and their current clubs but it is anticipated that some deals will be finalised and announced in the coming week. The announcements will include players in and out of the club.”