Cardiff City have announced pre-tax losses of £11.6m for the last financial year after making investments which the club state will put them on a "more stable and stronger footing for the future".
The losses published are up £231,000 from the 2023 financial year, meaning the balance sheet deficit rose to £30.8m, however the club have built a plush new academy in Llanrumney and have invested £1.7m in payments to secure a 150-year lease for the development of the new 42-acre training base for the first team. Running costs, including a one-off payment to terminate the old academy site lease, also increased by £1.1m.
The heavy investment, which includes £7.5m pumped into the playing squad over that year - an increase of £2m on the previous year, has been offset by a number of notable income streams during that period. Sign up to our daily Cardiff City newsletter here.
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The club received what they described as "exceptional gains" of £18.4m, a significant proportion of which - £12m - came from litigation claims made by the club.
Cardiff City Supporters' Trust chair and chartered accountant Keith Morgan said in relation to the above in a statement: "The only matter that I believe this can relate to is the club’s long running legal claim for damages against FC Nantes arising from the tragic death of Emiliano Sala in 2019.
"There are enterprises that will buy the rights to all or parts of legal claims, but only if they believe that the claim has a very good chance of success. Therefore, it seems that it is just not the club and its legal advisors that continue to believe they will eventually succeed in their claim against Nantes but an independent third party who are willing to advance £12m – non refundable no matter what the outcome of the case.
"To 'an outsider looking in' this gives me increased confidence that the club will win the case. On a prudent basis , and in line with accounting requirements , the club has not included the potential future financial benefit from this source in these accounts as it is what is referred to as a 'contingent asset' rather than an actual realised asset."
There is also the potential for more income from further litigation pertaining to the case, however they are not included in these accounts.
The club's turnover was £23.2m, down £3.4m from the previous year, with a dip in sponsorship, advertising and commercial incoming accounting for the much of the shortfall compared to the 2023 financial year.
The actual operating costs - i.e. the ongoing expenses the club incurs to run its day-to-day operations - of £10m have reduced by £1.2m compared to the previous year.
As for loans, owner Vincent Tan, and "connected parties", has injected additional funding of £11.8m. The loans have increased when compared to the previous year, however Tan's loans specifically do not accrue interest. Chairman Mehmet Dalman has previously stated that Tan will likely, at some point in the future, either write off the loans or convert them into equity.
The accounts also show that £2.1m of the £2.6m payable interest was to Tormen Finance Inc., in which Dalman has a significant involvement. That interest is at 6 percent per annum. Tormen Finance put £11m into the club during the year in question, taking their total debts owed up to £37.3m, while owner Tan is now owed £68m in total.
Importantly, as the losses incurred are in-keeping with the EFL's allowances - £41.5m over three years - they have not breached profit and sustainability rules.
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In a statement, the club said: "While the reduction in the Operating Loss for the year is encouraging, there is still a great deal of hard work ahead to continue the downward trend in the Operating Loss.
"We have, however, in 2024 been able to expand our investment in the First Team squad, complete the new Academy development and lay the ground for the construction of our new purpose-built First Team training ground.
"Each of these advancements will put us on a more stable and stronger footing for the future."
