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Sport
Paul Abbandonato

Cardiff City's immediate future on the line as hat-trick of court cases create perfect storm that could change things forever

Cardiff City are facing one of the most important 10 week periods in their 123-year history - with the immediate future of Wales' capital city club at stake.

And it has absolutely nothing to do with whether Steve Morison keeps them in the Championship or not, which looks certain anyway.

Three time-sapping legal cases the Bluebirds management have been fighting behind the scenes for a couple of years are coincidentally coming to a head together, thus creating a potential £40million-plus perfect storm for Cardiff owner Vincent Tan.

The importance of the outcome of the lawsuits can't be overstated enough in terms of what happens next.

Win them, and a re-energised Tan might choose to release the purse strings in the transfer market to bring in talented older heads next to the gifted young guns in Cardiff's team who are already offering so much promise.

Alternatively, after 12 years at the helm, Tan could look to sell a club with so much vast potential and which suddenly doesn't have such heavy legal liabilities hanging over it for any prospective new owner.

As things stand there is no suggestion Tan has any inclination to sell and remains committed to seeing through his wishes for Cardiff.

Lose the court cases, however, and Cardiff would need to find the money from somewhere, and fast - inevitably leading to significant cutbacks in the playing budget and the probable sale of star men.

That's the enormity of what is at stake here. Some shrewd pundits reckon this is the most important little period in recent memory for the club.

Cardiff can either begin compiling a team capable of stabilising in the short term and then making a genuine push for the Premier League and staying there - or they may end up with a real battle against relegation into League One next term.

Of the three cases, the Emiliano Sala appeal is the headline act and goes before the Court of Arbitration for Sport this week.

But Cardiff's colourful former owner Sam Hammam is taking High Court action in May in a bitter dispute over the Bluebirds Presidency he was given.

A third case, this time brought by ex-Cardiff director Michael Isaac, is already being heard in London and comes to a conclusion soon.

Bluebirds chairman Mehmet Dalman has been forced to spend an enormous amount of time in the background building the cases x 3 in conjunction with the club's solicitor, Chris Nott of Cardiff-based Capital Law.

Cardiff chairman Mehmet Dalman has been doing painstaking work behind the scenes on the three legal cases (Gareth Everett/Huw Evans Agency)

While the litigation has been occupying their minds, Cardiff's hierarchy will dispute that they have taken their eye off the ball with regards matters on the pitch. But they certainly weren't anticipating the appalling run of results under Mick McCarthy earlier this season and the need to act upon the manager.

In time, conversations will turn to whether to keep stand-in boss Steve Morison beyond next year, or whether Tan goes for someone like Craig Bellamy, Michael Beale, or perhaps a more experienced hand as the club's permanent manager for a few years.

Once more, the outcome of the court cases could prove key to who Cardiff can, and cannot, afford and the type of budget that will be available in the summer transfer window.

While the focus of the fans has understandably been on the fight to remain in the Championship, the three court cases have been hovering in the background for a while and Cardiff feel they are presenting as compelling a case as possible in each of them, with the legal process needing to take its course.

These are the issues the Bluebirds are dealing with and how it could affect Tan's thinking for the way forward after more than a decade in charge.

Michael Isaac (ex-Cardiff director)

Local businessman Isaac, who was voted off the Bluebirds Board in 2015, is suing Tan and Cardiff City Football Club (Holdings) amid claims that his shareholding was diluted.

The matter has gone before the High Court, with QCs giving their final submissions last Wednesday and the Judge will make a decision shortly.

Initially this was reported to be a £10m case, with Isaac feeling he was entitled to a certain percentage of the club's value, but that figure has come down.

The row centres around a rights issue which was open to shareholders when Tan converted a sizeable portion of his debt to equity a few years backs.

Tan owns in excess of 90 per cent of the club today and Isaac feels he has in effect been neutralised and victimised.

The Judge has to determine whether Isaac's shares were diluted unfairly. If so he could get four per cent of the value of the club, whereas Cardiff argue it should be 1.28 per cent.

However, the Bluebirds also feel the shares are in effect worthless because the debt is greater than the club's current value.

Even when Cardiff were a Premier League team, and potentially worth up to £100m for argument's sake, the debt owed was higher than that.

The Judge has the facts, he's heard the two sides of the story and should make his verdict known within a matter of weeks.

Cardiff feel their case is very strong, but will the Isaac underdog factor have any bearing?

Sam Hammam (ex-Cardiff owner)

This £15m case is due to go to trial in London mid-May - and it could be explosive with Hammam and Tan each called as star witnesses.

Fair to say that should be fun, if so.

The dispute revolves around the terms of the Presidency Hammam was given as part of the agreement over the historical £24m Langston loan notes debt, which had been a problem for many years.

Tan and Hammam are forceful characters and neither man is backing down at present.

Hammam, a 75-year-old Lebanese businessman, was Cardiff owner between 2000-2006 and it was under his stewardship that the Bluebirds' success this century was kick-started, with promotions from League Two and League One.

Tan has since taken things onto the next level, Cardiff winning two promotions to the Premier League and regularly challenging near the top of the Championship.

As part of what Cardiff felt was an act of goodwill whilst paying off the problematic Langston debt, Tan also negotiated a new Cardiff role of President for Hammam.

Although officially called a 'Ceremonial, Non-Executive' position, a formal contract was drawn up whereby Hammam could attend matches, receive privileges, act as a figurehead and help promote the image of the club. There was also the suggestion of powers enabling every area access on match-day, including the dressing room, and the possibility of Hammam seeing the contracts of managers and players.

Many will feel those last two should be the domain of the manager, owner, chairman and chief executive only.

Whatever, Tan and Hammam quickly fell out. Hammam stopped coming to matches and the two parties appear poles apart in what they feel the monetary value should be of the Cardiff City Presidency.

Cardiff believe the role entitles you to top seats home and away, car parking, pre-match meals and the glamour that goes with being able to walk football's corridors of power.

Hammam is understood to be arguing the position was created for him as part of a package to reduce the Langston debt.

The Bluebirds dispute this.

Hammam still retains something of an obsession about Cardiff City FC, feels that he has unfinished business at the club he left shortly before the new stadium was built and that under his stewardship the Bluebirds would thrive.

So how will this one play out?

The two parties could choose to settle out of court to avoid a public slanging match and dragging the club's name through the mud in the courts.

However, as things stand it's not clear how this can be achieved given the amount Hammam is claiming and Cardiff insisting he can't have anything remotely resembling that sum.

If Tan and Hammam do each end up in the witness box, this could become Welsh football's trial of the century.

Emiliano Sala and CAS

Where to start with this one?

Let's just say it is an enormously complicated case and not as simple as saying 'Sala was a Cardiff player, the club should pay up.'

The Bluebirds were ordered by FIFA to pay the first instalment to Nantes of the £15m fee originally agreed to buy the Argentine striker during the Premier League campaign under Neil Warnock.

Cardiff are the appellant at the Swiss-based Court of Arbitration of Sport, in effect appealing to a higher court for a reversal of the decision made by a lower body.

The case is due to begin towards the end of next week, with a three-man arbitration panel sitting in judgement in Lausanne. It will be headed up by Professor Ulrich Hass, a 58-year-old sport law specialist who has previously adjudicated on controversial issues arising from the Olympics and Formula One.

Because the Sala case involves English law, French law and also Swiss law (when it comes to football matters), Cardiff and Nantes each have an Army of lawyers fighting their case. Cardiff have 16 involved, Nantes 18.

Sala's inquest is currently taking place in Bournemouth and is likely to still be going on while the CAS hearing takes place.

Cardiff are understood to have asked for a short delay so the inquest could be completed, but as things stand the hearing is due to go ahead towards the end of this week.

Trying to simplify an enormously complicated matter as best possible, Cardiff's case in effect boils down to two main things.

Who is responsible for the money and who is liable for the incident?

A provision of £21m was mentioned in previous accounts to cover the Sala costs, but with Cardiff also emphasising they didn't think it would be payable. There is a difference, however, between that sum being on the balance sheet and Tan actually needing to suddenly find the money.

Two days of intense legal arguments are about to commence and what CAS decide is anyone's guess at the moment, although Cardiff feel they can have done no more in presenting their arguments

So what happens next with Tan?

Back to the very outset of this article, Cardiff's future hinges on the outcome of the court cases.

If Cardiff win the three of them, the financial situation would be substantially eased and they could look to kick on by signing quality players and push for the Premier League.

Who the manager should be moving further forward, be that Morison or a new man, would be the subject of discussions.

But Cardiff could certainly afford to be ambitious in those circumstances.

Alternatively, after 12 years of ownership, Tan could choose to sell the club, a more attractive proposition for would-be new owners unburdened by the current legal liabilities which are bound to otherwise put people off.

If Cardiff lose the three cases, further cutbacks would be inevitable given the hammering Tan's business empire has already taken during the pandemic. That's just the reality of the economics.

If there is a mix and match, win one, lose two - or even win two of them - Cardiff would find that a little more manageable, but again there would need to be cutbacks.

It could well be that, like this season, Cardiff remain a club in transition for the next couple of years, the younger players gaining more experience before they look to kick on further down the line

There is little doubt that with a couple of years more Championship experience behind them, talents like Rubin Colwill, Isaak Davies, Joel Bagan, Mark McGuinness and Ryan Wintle - with others as well - could form the nucleus of a successful team moving forward.

It was hugely crucial Morison kept Cardiff in the Championship this year and he appears to have done that.

But what happens next off the field is arguably even more important given the enormity of what is at stake here because it defines where the Bluebirds go next on the pitch as well.

Cardiff City have been burning the midnight oil and leaving no stone unturned in their fight to win the court cases. Tan and Dalman know the future hinges on them.

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