The extent to which Norwich City Football Club were bathing in Premier milk and honey became ever more clear with this morning’s publication of the latest set of accounts.
Now wholly free of external debt, the fact that the Canaries posted a post-tax profit of just £500,000 merely demonstrated how close they had got to running the perfect ‘mutual’ model – with all profits being ploughed back into the ‘software’ that was the football department.
The fortunes that come with continuing membership of the English Premier League were not lining the pockets of either shareholders or foreign oligarchs – nor was it being used to keep the bankers and the lenders at bay.
Those dark days are a thing of the past; it is also why Canary chairman Alan Bowkett remains loathe to take out a new mortgage on rebuilding the City Stand and lifting the capacity of Carrow Road from 26,800 to nearer the 35,000-mark.
He was, you sensed, enjoying not have to talk to the bankers on all-too regular and urgent basis.
“It’s not in our immediate plans,” was Bowkett’s preferred line on the question of a new City Stand.
“It’s something that we would like to do in the mid-term,” added Canary chief executive David McNally at yesterday’s accounts briefing. “Its easier to be a Premier League team on a consistent basis with gates of 35,000 than it is on gates of 26,800.”
But being able to guarantee Premier League status for the next 20 years – the lifetime of any likely mortgage on a new stand – was not something either of them could predict given the fickle and all-too often cruel nature of the football beast.
For now – and with every good reason – they were content to savour life without debt based on the £49 million worth of TV cash that membership of the Premier League brings.
That figure will rise again this season with the start of the latest rights deal; should Norwich finish, say, 14th at the end of this campaign, it is likely to net them in the region of £71 million.
On the basis of a philosophy of ‘continuous improvement’, they were however looking to finish in the top ten; do that and that figure will rise again to nearer the £80 million mark.
“We were faced with the legacy of a very difficult balance sheet,” said Bowkett, who has been a central figure in masterminding Norwich’s remarkable turnaround in financial fortune.
“But last year we have been able to shrug off all those difficulties.
“To the extent that we are now one of the few clubs in the Premier League making a profit – and one of the few clubs in the Premier League actually paying Corporation Tax, I suspect.”
The club still has an ‘internal’ debt of £2.1 million to its principal shareholders, Michael Wynn Jones and Delia Smith, plus Michael Foulger.
That too was scheduled to be repaid in the coming financial year. “So we will have no internal debt either – again not many Premier League clubs can say that,” Bowkett added.
The big increase in costs – and the reason profits were down from the £13.5 million recorded the year previously – was simply explained. Football expenditure rose from £40.8 million in 2011-12 to £59.6 million in 2012-13. It will rise again this year given Chris Hughton’s £25 million summer spending spree – and all with the wages attached.
The club continue to install punitive ‘Championship clauses’ in any new contracts; relegation to tier two of English football will hit the players where it hurts them the most – in the wallet.
It is, therefore, designed to keep their minds fully focussed on the job in hand; keeping Norwich firmly in the Land of Milk and Honey.