PMG and CCST: A Clarification

Following Friday’s announcement on Cardiff City’s official website concerning the latest agreement between the football club and major creditors PMG, discussions have been taking place on Annis Abraham’s message board with regard to a joint statement that was issued by the Cardiff City Supporters’ Club and the Cardiff City Supporters’ Trust in March 2010.

As was the case when that statement was initially released, its content and intentions are once again being misrepresented by certain ill-informed individuals on AAMB. Therefore, as the person who was responsible for drafting the statement on behalf of CCSC and CCST, I feel duty bound to set the record straight. Unfortunately, I am unable to respond directly to the comments on Annis Abraham’s forum as he has permanently banned me from posting there, so I shall have to respond here instead.

In mid-March 2010, representatives of the Supporters’ Trust board were contacted by members of the Supporters’ Club committee and asked to attend an emergency meeting in order to discuss the club’s ongoing financial crisis. The meeting took place on Sunday 14 March in the function room at the Duke of Clarence public house and talk centred on the delicate negotiations which were taking place at the time between the club’s largest shareholders and prospective investors Vincent Tan and Dato Chan Tien Ghee.

The Supporters’ Club representatives had information which revealed the full gravity of the club’s financial position and underlined the fact that major secured creditors Paul Guy and Mike Hall were the key figures in any potential deal with the Malaysian investors due to the size of their company PMG’s shareholding and the amount of money they were owed by the football club.

At that stage, a small group of Bluebirds fans from AAMB were actively involved in a futile campaign to force the resignation of Chairman Peter Ridsdale. While the frustrations of those supporters were fully understandable given the club’s financial problems, the truth of the matter is that Ridsdale was already the proverbial dead man walking. He had stated publicly on a number of occasions that he was ready to quit the club as soon as any new investment was secured and he’d said exactly the same during various meetings with Supporters’ Club and Trust officials.

It was crystal clear that Ridsdale was a relatively minor factor in the ongoing negotiations with the Malaysians and he would play no part in a new regime should the potential investment come to fruition. Therefore, it was quickly agreed that targeting the Chairman was a pointless exercise. While everyone present believed that Ridsdale’s position had become untenable and he should leave the club as quickly as possible, it was blatantly obvious that no amount of demonstrations, marches or brown and orange scarves would hasten his exit. Ridsdale had stated he was only going to walk away after the new investment had been rubber-stamped and so it proved.

Given the fact that Paul Guy and Mike Hall were central to the negotiations with the potential investors, it was unanimously decided to issue a joint CCSC/CCST statement appealing for them to do the right thing by the football club. The information we had available to us strongly suggested that Guy and Hall were attempting to obtain the best possible deal for their company during their discussions with the Malaysians, which was only natural; PMG is, after all, a business and not a charity. However, bearing in mind Hall’s comments to the media when Sam Hammam was forced out of the club in December 2006, we felt it was fair and reasonable to remind PMG of their responsibilities to Cardiff City.

Following the meeting, I was given the job of preparing the statement. After it had been completed and approved by the rest of the Trust board and members of the Supporters’ Club committee, it was released to the South Wales Echo for publication on 18 March 2010. The release was timed to coincide with a series of meetings that were scheduled to take place between Mike Hall and Dato Chan Tien Ghee. The statement read as follows:

Despite being granted a 56-day stay of execution in the High Court last week, it appears that the future of Cardiff City Football Club is once again on a knife edge.

We have been reliably informed that administration is virtually inevitable before the end of March if significant new investment in the club has not materialised by then. We understand the Bluebirds’ cash reserves are practically exhausted, there is little money available to pay this month’s wage bill and debts are now estimated at almost £40 million.

The situation is clearly perilous, although we are led to believe there may be light at the end of the tunnel thanks to a written offer of investment from a Malaysian consortium. The group’s front-man, Dato Chan Tien Ghee, is said to be arriving in the UK on Thursday for a series of meetings with Bluebirds officials, during which the club’s fate will effectively be sealed.

The men who appear to hold the key to the football club’s future are Cardiff-based property developers Paul Guy and Mike Hall. Their company, PMG, is the club’s biggest shareholder and also its largest secured creditor. Consequently, they are certain to be central to any takeover negotiations.

During recent years, PMG has benefited from a series of lucrative land deals connected to the Cardiff City Stadium project. Not only has the company become the sole owner of the successful Capital Retail Park, but it was also chosen to develop and build the Glamorgan Records Office, which stands adjacent to the new stadium. In addition, PMG recently purchased another large plot of land on the stadium site, upon which a hotel will eventually be developed.

It is clear that PMG has been doing well from its relationship with Cardiff City, but the current state of the football club’s finances suggests the benefits of this association have not been entirely mutual.

It should be acknowledged that Paul Guy and Mike Hall were largely instrumental in getting the new stadium project off the ground. They advised on all stadium development issues, while PMG advanced the club £9 million of the funding required to build it. The loan was secured against future income from the Premier Club seating area and attracts interest estimated at £500,000 pa.

In December 2006, while he and his colleagues were in the process of taking control of Cardiff City, Mike Hall claimed the new investors were local people who were interested in the football club’s long-term future. He also described former-owner Sam Hammam as being motivated by “total greed and self-interest”.

We sincerely hope that Messrs Guy and Hall will not put themselves in a position whereby they will be open to similar accusations from Bluebirds’ supporters during the coming weeks. We therefore call upon them to set aside their personal interests and do what is right for Cardiff City Football Club in the critical days ahead.

The statement was well received on the main Cardiff City Mad forum, but it was a very different story on Annis Abraham’s message board, where a blatant anti-Supporters’ Trust campaign had been in full swing for several months. Comments posted by some of the more prominent members of that forum included the following:

“This statement is pathetic and clearly highlights the weakness of the Trust. The fact is it’s just a publicity tool for Sugarman.” (18/3)

“The Trust’s dig at PMG astounds me. Their claims that PMG could make or break any deal are pretty ludicrous based upon what everybody else has been hearing. Which then makes you wonder precisely how much information the Trust actually has and, more importantly, where it's coming from.” (18/3)

“The truth of the matter is that there have been clandestine meetings between the Trust and Peter Ridsdale over these last few weeks and the outcome of those meetings is this statement. The Chairman via the Trust has successfully deflected criticism from himself and onto Paul Guy.” (19/3)

“As far as I’m concerned an individual has abused his position in the Trust with regards to releasing this statement. The trust is being run as some sort of dictatorship.” (19/3)

“This statement has come about because a certain member of the Trust was railroaded and misled by Peter Ridsdale. He is abusing his power for a personal agenda, trying to put heat on some, and taking heat off others.” (20/3)

“Has anybody found out who is behind the pathetic PMG statement issued by the Trust? As if it's not difficult to guess. With that press statement they shot themselves in the foot entirely, wrong tactic, wrong target.” (20/3)

Meanwhile, the website's owner Annis Abraham said:

“What a pathetic statement. Why have a go at PMG? Why are certain people now turning on Paul Guy? What is their agenda? To turn on PMG, well the Trust has lost it in my opinion.” (18/3)

As tends to be the case with so many issues, much of the gossip on AAMB relating to the CCSC/CCST joint statement was complete and utter nonsense. As I have already explained, the statement was the result of a meeting between representatives of the two official fans’ groups rather than any clandestine meetings between me and Peter Ridsdale. The truth is I never had any secret meetings with the former Chairman. Rumours that I was somehow in cahoots with Ridsdale were circulated by the usual suspects in a calculated attempt to discredit me as an individual and the Trust as an organisation.

There was also no personal agenda or abuse of position on my part. In fact, the meeting at the Duke of Clarence was called by officials of the Supporters’ Club as opposed to the Trust, while the contents of the joint statement were arrived at during the discussions that followed. Furthermore, the statement was fully approved by members of the Supporters’ Club committee and the Trust board before it was submitted to the South Wales Echo for publication.

The motives behind the statement were misinterpreted by certain individuals when it was released and they are being misinterpreted again now. The statement was never intended to be an attack on PMG, as has been suggested. It was merely an attempt to remind Paul Guy and Mike Hall of their obligations to the football club and a public appeal for them to do all they could to facilitate the Malaysian investment. The statement was also obviously not a plea for PMG to pay the club’s outstanding tax bills, as has been claimed this week by one prominent AAMB member.

When details of the new investment package were circulated to shareholders in May 2010, it became apparent that Paul Guy and Mike Hall had indeed made significant concessions in order to ensure the deal went through. As a condition of their investment, the Malaysians had insisted that several debts and contractual arrangements were restructured, with PMG’s loan being easily the largest and most important. Under the terms of the new agreement, £300,000 of the cash owed to PMG was converted into shares, while the balance of the debt was restructured so it was repayable in full by 30 September 2013 as opposed to being repayable immediately. The deal also stated that a further amount of up to £2.7 million of the outstanding debt could be converted into shares at the club’s discretion at any time before 31 December 2011 provided sufficient written notice was given to PMG.

I am extremely confident that the terms of the May 2010 agreement were far more beneficial for the football club than those which Paul Guy and Mike Hall were originally seeking in their negotiations with the Malaysians, so credit is due to them for giving ground in order to facilitate the investment deal. It would be fanciful of me to suggest that the joint CCSC/CCST statement had any bearing on their decision to make those concessions, but history has shown that it didn’t do any harm.

Friday’s announcement that a further agreement has been reached regarding the club’s largest secured debt is excellent news. According to a statement on the official Cardiff City website, PMG have agreed to convert a significant amount of their outstanding loan into shares while also agreeing a new payment plan which will improve the club’s balance sheet. Both steps are very positive, while the news that Mike Hall will be rejoining the club’s board of directors in order to work with the Malaysian investors on addressing the Langston issue is interesting to say the least.