Ridsdale had previously visited the Muni in mid-November 2007. On that occasion, he faced the wrath of a group of nineteen angry fans, myself included, who were upset about the team's woeful form at the time. City had just been thumped 3-0 by Charlton Athletic at the Valley and were hovering two places above the relegation zone thanks to having a better goal difference than fellow strugglers Preston and QPR. In his book, United We Fall, the Chairman wrote a brief account of that particular meeting. He described the Muni as "not a place for the faint-hearted or thin-skinned," and said walking into it was "like entering the lion's den."
Back in November 2007, Ridsdale arrived at the venue alone, but on Monday evening he was flanked by several of his colleagues, including Group Finance Director Alan Flitcroft, General Stadium Manager David Spencer, Head of Media and External Relations Gareth Davies and Stadium Manager Wayne Nash. The Chairman took his place at the centre of the stage alongside event organiser Annis Abraham Jnr, and the inquest into the club's current on and off-field problems began at 7:00pm prompt.
Insolvency expert and Supporters' Trust board member Keith Morgan opened the meeting by probing Ridsdale about City's present debt levels. The Chairman stated the club owes the mysterious Langston Corporation £15 million, although that figure could be written down to £10 million as a part of a revised loan notes agreement that is currently the subject of prolonged negotiations. He said major shareholder Paul Guy's company, PMG Estates Ltd, are owed just over £9 million plus interest on a loan they gave the club to fund the new stadium build. I understand that debt amounts to a total of almost £9.7 million when the interest is taken into consideration. Ridsdale added that around £2 to £3 million is owed to contractors for fitting out the stadium, and said the HMRC tax bill, along with earlier loans from directors Steve Borley and Michael Isaac, are currently being paid off by monthly instalments. The tax bill and the remaining balances on those loans apparently account for a further sum of around £2 million.
When all the figures are taken into account, I would estimate the club's current debt stands at approximately £29 million. Ridsdale claimed the figure is closer to £24 million, but I believe he was subtracting the £5 million that could be wiped off the Langston debt if it settled early. At the moment, there appears to be no guarantee that will happen, although it remains a strong possibility if the prospective Malaysian investment comes to fruition.
The revised Langston loan notes deal was the subject of much discussion. Ridsdale stated that he and Langston representative Sam Hammam have reached a verbal agreement they are both happy with, but the respective lawyers are currently squabbling over some of the legal jargon contained in the related paperwork. He said he expects this mini-dispute to be resolved and the agreement to be signed off by both parties in the very near future.
Ridsdale maintained he is confident that Langston have no intention of pursuing any further legal action against the club, and I share his confidence. Another litigation could take up to two years to reach court and would cost Langston a small fortune. They would also have precious little chance of winning the case. When I last talked to Sam Hammam at any length, which was a few months ago, he spoke of his desire to get this matter sorted out once and for all for the benefit of all concerned, including his family, and said he wanted everything to be done and dusted by the end of December at the latest. Dragging things out any longer won't benefit anybody, so I'm sure we will finally see a resolution within the next couple of weeks.
The details of the revised loan notes agreement are interesting, to say the very least. Provided the relevant paperwork gets signed, monthly repayments to Langston will commence in January 2010 and I'm reliably informed they will be set at around the £83,000 mark, meaning approximately £1 million will be paid off the debt each year between now and 2016, when an additonal balance of £9 million will be due. However, there are significant incentives for early repayment of the entire liability. For instance, if it is settled by the end of 2010, then the total payable by the club will be just £10 million. If it is paid off by the end of 2011, the total will be £11 million, and so on.
As was the case with the 2007 revision of the original 2004 agreement, all historic interest has been written off, and this time around all future interest has also been written off, which is a massive financial boost for the club. In a further amendment, Langston will receive a sum of £5 million if the stadium naming rights are sold or if the club reaches the Premiership - whichever happens first.
The loan notes debt initially stood at £24 million plus interest. We are now in a position whereby it could be reduced to as little as a flat £10 million. Of course, Langston's hands have been tied to a large degree by the financial situation at the club, but nevertheless the debt has been the subject of some remarkable reductions in recent years, and credit for that should go to those who have been involved in the negotiating process. A £24 million plus interest debt was simply unmanageable for a club of Cardiff City's size, but a debt of £10 million makes the Bluebirds a far more viable proposition for any prospective investors, especially now the new stadium is up and running.
On the subject of possible investors, Ridsdale confirmed that new board member Datuk Chan Tien Ghee has already advanced a significant sum of money in relation to his investment in the club and more cash is expected to follow later this week. I'm led to believe that investment is likely to total around £2 million at this stage, with Tien Ghee taking a 10% stake.
For the first time in public, Ridsdale mentioned the name of Vincent Tan - Chairman of the Berjaya Corporation. The Bluebirds boss revealed he had dinner with Tan last week and it now seems increasingly likely that the billionaire businessman will also be investing in the club before too much longer. It is unclear at this stage whether Tan's prospective investment would be in addition to that of Tien Ghee, or whether it would form a part of the same deal, but the Malaysians are apparently midway through the due diligence process, so we should hear some further news in this respect very soon.
In relation to last week's court appearance regarding a winding-up order issued by HMRC, Ridsdale said the debt concerned was an historical one. He suggested that payments hadn't been made on time this year because of an overspend on the stadium fitting-out costs. However, he was keen to point out that the winding-up order was suspended well in advance of the court hearing after a satisfactory repayment schedule had been agreed with HMRC. The Chairman admitted a degree of naivety over this matter as he'd assumed the case wouldn't reach the public domain because of the agreement. He claimed he hadn't even known the date of the court hearing as he believed it to have been little more than a rubber-stamping exercise.
Ridsdale assured those present that City would not be the subject of an FA transfer embargo during the January window as a result of the tax issue and he spoke of his anger over the way in which the story had been presented by Media Wales on their website and in their newspapers. He said he felt the coverage did not offer a true reflection of the situation and had unnecessarily worried the club's supporters and creditors alike due to the tone adopted by the Media Wales writers.
Other titbits of information which emerged during the meeting included news that the Chairman's salary actually amounts to £350,000 per annum as opposed to £500,000 as is so often claimed on the internet message boards. Ridsdale told the audience his wages are determined by fellow directors Keith Harris and Alan Whiteley, and he said he believes he's worth every penny of his salary. It was also revealed that the club's annual wage bill currently stands at around the £12 million mark, and that General Stadium Manager David Spencer is working for the club on a one-year consultancy contract which will be reviewed at the end of the season.
During a brief discussion about the proposed House of Sport development, which the club has a contractural commitment to the council to build before the end of December 2010, Ridsdale stated the project will cost somewhere between £1 and £2 million, and will be funded by selling land banks on the stadium site which have a similar value.
The Premier Club seating area of the Grandstand was also the subject of a short debate. The Chairman conceded the marketing of this section of the new stadium had been "a complete cock-up." He revealed that the Premier Club will be relaunched in January, when packages that give better value for money will be offered to existing and prospective members.
Turning to on-field matters, Ridsdale described the team's recent displays as "wholly unacceptable" and said he had been "absolutely appalled" by the second half display against Ipswich on Sunday. He said he had already outlined his feelings to Dave Jones and the rest of the management team, and he expects to see a significant improvement from the players against Preston next Saturday. However, despite the dismal performances against Swansea, Barnsley and Ipswich, he predictably defended his manager and underlined the progress he feels the side has made under Jones in recent years. Ridsdale stated that as and when he thinks the club will benefit from a change of manager, he will take the appropriate action, but he clearly doesn't believe that time is now if his comments at this meeting are anything to go by.
The Chairman talked about how much the team is missing Steve McPhail, how he feels Joe Ledley is currently "playing like he's somewhere else" and how he knows the side needs strengthening in several positions. He hinted that the squad will be added to during the January transfer window but warned that finances are likely to remain tight for the time being despite the prospective investment from the Malaysians.
In terms of his own future at Cardiff, Ridsdale said that although he is not a born and bred Bluebird, he has become a big City fan since arriving in South Wales, and he claimed he is as passionate about the team as any of us while games are being played. Nevertheless, he said he will consider his job here has been done as and when the debts are cleared and the club reaches the Premiership.
On Monday evening in the salubrious surroundings of the Municipal Club, Peter Ridsdale provided us with a masterclass in winning over an initially sceptical audience. That should have come as no surprise to anybody, as we've seen him do so before and no doubt we will see him do so again before he leaves our football club for pastures new. While I was not entirely convinced by one or two of the answers he gave and I'm dubious about his suggestions that the club could be debt-free by the end of next year, I am nevertheless feeling reasonably positive about City's off-field prospects at present, as I think I have demonstrated in earlier entires to this blog.
While there is obviously much work for Ridsdale and Co to do in order to put an end to the Langston saga, make the prospective Malaysian investment a reality and start clearing those horrendous debts, I believe there is finally some genuine light at the end of the tunnel. Let's hope I'm right and that light gets progressively brighter during the coming months.
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