‘Nobody asks the pertinent questions” was one of the accusations that Sam Jermy’s well-marshalled MFW column threw at those of us who don’t think there’s any sort of crisis at Norwich City.
Well, I pose apposite queries all the time, but not everyone wants to hear the accurate answers.
Question 1: Norwich City are free of external debt. Is that a good thing?
Answer: Yes, but we didn’t have any choice.
Relegation to the third tier in 2009 left the club we all care about on the verge of penury. We had repayments due on debts of £23m and didn’t have the funds to pay them. Chairman Alan Bowkett used his nous and personal relationships with bankers to negotiate a repayments ‘holiday’ — a miracle during the global banking crisis.
To strike the deal that saved us he had to promise that, if NCFC got to the Premier League, they’d pay back all the money they owed in two seasons.
We went up, repaid the £23m as promised, and became free of external debt.
Why do Norwich keep declaring small profits?
The short answer is that ambition is pointless if you are pot-less.
The longer answer begins with that £23m. In season’s 2011-12 (Lambert) and 2012-13 (Hughton), Norwich had to pay back the £23m back, so of course we had to make operating profits.
The story of season 2013-14 was different. Sam Jermy quotes The Guardian’s David Conn, who wrote (I paraphrase) that making an operating profit of £9m wasn’t good business, because we were relegated.
Instead of falling for that glib Conn trick, though, let’s look at what we were told by our own annual report and at the annual meeting. That profit (actually £9.5m before tax) was the fund set aside for the bonuses that would have been owed to the players if we’d stayed up in May 2014.
If City had remained in the Premier League, the board would have spent pretty much every available penny on the playing budget (transfers and wages).
The following season, 2014-15, we made a loss (more of that later).
We haven’t yet seen the accounts for 2015-16, but we know that, despite what Sam and others assume, the Norwich City business model is to spend every bean on trying to get and keep good players. The accounts show it time and time again.
Why don’t we spend more though?
You can’t spend money you haven’t got. Football clubs cannot borrow money to spend on players. Nobody will lend for that.
Why are we suddenly skint?
We’re not. But, as Alex Neil said before the Cardiff match, there’s not a stash of unused money lying around. We are not as well-placed as we were when we were relegated in May 14.
But the anomaly is not that we’re a bit short of readies now. It is that we didn’t struggle for dosh in May 14.
Relegation from the Premier League is usually devastating. Look at Fulham and Cardiff, who went down with us that summer.
Cardiff sold 25 players, released seven and sent another 12 out on loan. That’s 44 all together. The sales brought in £28.7m. They spent a mere £6m recruiting just 18 replacements.
Fulham let 16 players go on free transfers: men including Steve Sidwell, Brede Hangeland and Kieran Richardson departed without a single penny coming in. The London club’s strategy was simply to get well-paid players off the payroll.
Yet, in that summer of 2014, Norwich sold seven and bought 16. They spent £2.7m more on the new men than they got for the ones who left. They offered handsome incentives to keep players at Carrow Road and entice others to join them.
And so, in that 2014-15 season, which ended with the stirring Wembley triumph, Norwich made an operating loss. In a year, we’d gone from £9.5 profit to a loss of £8.5m. We’d blown it all on getting back up.
Why do we have such wretched transfer windows?
We don’t generally. Not in terms of spending money, at least.
Once we’d paid back that £23m, it was obvious (to those prepared to look) that we were having a splurge. And, in July 2013, we committed ourselves to a club record deal. Unfortunately, Ricky Van Wolfswinkel only very briefly looked worth £9.69m (which is what I believe the fee and wages amounted to).
Gary Hooper, snatched from under the noses of QPR for a £5.5m fee, fared not a lot better, but add in Leroy Fer, Nathan Redmond and Martin Olsson, and nobody with a fair mind could say there was a lack of ambition that summer.
The RVW mistake was costly, though, and Ewan Chester, the director of recruitment, was sacked almost as soon as relegation was confirmed.
His successor, a man I already knew, was Barry Simmonds, whose best work in the summer of 2014 was keeping the squad together before adding Championship specialists like Lewis Grabban and Gary O’Neil — and then, as the window was shutting, grafting a grafter into the forward line: Cameron Jerome.
But Simmonds was sacked in March 2015. In July, when much of the transfer work for the 2015-16 season should have been done, Lee Darnborough was appointed Head of Scouting, but that’s not the same as leading the recruitment department.
It was that summer 2015 window which nobody can pretend was anything other than disappointing. Robbie Brady and Matt Jarvis looked quality acquisitions, but we needed shoring up at the back.
And the Steven Naismith deal, which fell through that summer only to be completed in January 2016, tells a story.
When Norwich signed a Redmond from Birmingham, or a Hooper from Celtic, we were able to offer the sort of money that didn’t need a lot of thinking about. But Naismith was at Everton, already on a multi-million pound contract, and Norwich couldn’t offer him a life-changing deal. His wife and children were settled on Merseyside and liked being able to get “home” to Scotland relatively easily.
So in January, McNally pushed the boat out to get Naismith, and offered him terms so good that Premier League Sunderland couldn’t match them this summer. Timm Klose and Ivo Punto won’t have come cheaply either. It was only in March, two months after the window, that Tony Spearing arrived as Head of Recruitment.
What went wrong in this summer’s transfer window?
Most relegated clubs throughout the Premier League era have had to sell players, and get high-earners off their wage bills before signing anyone new. For instance, Matt Holland’s reluctance to leave Ipswich when they were relegated in 2002 was a major factor in their going into administration.
Norwich didn’t have to shed many in 2014, but that situation was a rarity. This time, we were in the position in which most clubs find themselves: we needed to get fees in and players off the wage bill in order to sign (and be able to pay) new recruits.
Our situation changed during the window. Players that were expected to leave chose not to. If we’d given them “frees” we’d have had to pay up their contracts.
But keeping Brady, Klose, Tettey and Rudd (for whom their were offers) should be regarded as part of this window’s business. Keeping Naismith might prove its value as well.
Why haven’t we attracted “investors”?
Let me tell you a hither-to undisclosed story. At about the time Bowkett was renegotiating with those to whom Norwich owed money in 2009, I was trying to interest David Sullivan in buying our club.
He and David Gold were selling Birmingham and had not yet struck a deal for West Ham. Of course, Norwich wasn’t mine to sell, but I knew Sullivan well enough to exchange emails with him, so I asked him if he’d be interested.
His first question was: “How much money do they owe?” Our email-chat ended very quickly. He wasn’t prepared to even consider stumping up £23m and have nothing to show for it other than a couple of happy bank managers. Besides, he said, he didn’t want to drive to Norwich twice a week.
In 2010 chairman Bowkett asked Keith Harris to see if there were any potential buyers for Norwich City. He helped broker the sale of Fulham to Shahid Khan and Aston Villa to Randy Lerner. I spoke to him while he was conducting the search for a Norwich buyer. He said the club’s location was a problem but that the bigger problem was that men like Lerner were, um, learning that English football is a bottomless money-pit. Harris was unable to find anyone, anywhere, who wanted to buy Norwich City.
So the Gospel truth is that Delia Smith and Michael Wynn Jones have only ever received one firm bid from someone wanting to buy the club: Peter Cullum, in November 2007, when the team was near the foot of the second tier. The Norfolk-born businessman offered £20 million to become majority shareholder. He was insisting the money should be spent on new players.
That didn’t stack up. If you spend £20m on transfers, what about the club’s debts, and how do you finance the wages of the new players? How do you restock the playing squad each year? The club needed structured, continued investment, not a one-off gamble on a handful of new players.
And, in fact, there was not £20m on the table. Cullum offered £5m up front, in an attempt to stay in the second tier in that troubled season. If City did stay up, there would be another £15m available. If they were relegated, he would want his £5m back — and that would have plunged City into administration. Not for the first or last time, Delia and Michael took the course that ensured the club stayed alive.