In the cyclical nature of football I guess you could say City are ‘mid trough’
We have had a good run – a brilliant run in fact – and not a single foot soldier could have seen it coming as those two fat blokes hurled their season tickets in the direction of poor Bryan Gunn.
What followed was beyond our wildest dreams and it felt good. The peaks are now etched in Canary history.
That it has now gone southwards – and caused divisions aplenty in the Canary Nation – is hard to swallow but, in the greater scheme of things, I would suggest it is symptomatic of where Norwich City is as a football club.
In the real world we are of an ilk where ‘continued improvement’ in the Premier League was always going to be a massive ask – certainly in terms of improving on 11th place. It didn’t seem an unreasonable aspiration at the time but as it turned out now seems a million miles away.
While I can understand ‘continued improvement’ forming the core of the club’s mission statement (it’s hardly likely to say ‘to stand still’) to sustain it while still in the hands of “poor millionaires” was always going to be a big ask.
To have a balance sheet that shows zero level of external debt is one huge achievement, and can’t be under-estimated but, as we found to our cost, does little to gear you up for going toe-to-toe with those backed by massive wealth.
And I’m not just talking the Manchester Citys or Chelseas – whose reliance on Russian and Middle Eastern oil has taken them to a completely different financial stratosphere. I’m talking the Southamptons, the West Hams, even the Hull Citys, all of whom have backing of a very different level to Norwich City.
Our midfield was crying out last season for one in the mould of Tom Huddleston, but I suspect any chance of luring that ‘not quite good enough for the top five’ type of quality was scuppered by the level of reward on offer in the Fine City. Similarly their transfer window double of Nikica Jelavic and Shane Long.
All of them out of City’s financial reach. Like it or not, the amber and black are currently fighting on a different level to the yellow and green.
Of course, the margins remain fine and if Chris Hughton’s (or should that be Ewan Chester’s) summer search for a goalscorer or two had proved just a fraction more fruitful we’d still be a Premier League club.
But still, this summer, we’d likely have come off second best if challenging head-to-head for a player’s signature with those blessed with deeper pockets – which is around 90 per cent of the Premier League.
Even in the Championship there will be several with more financial clout than City – and we may not find ourselves the ‘big shots’ that some seem to believe.
During the now infamous Radio Norfolk phone-in Delia spoke passionately of retaining City’s identity, and not selling out to those who would no longer perceive the club as pivotal to Norfolk and its community but who would instead see Norwich City FC as another branch of its portfolio.
In the same phone-in David McNally spoke of operating on our current financial footing for the foreseeable future.
Clearly, where once the board were scouring the world for investment, they now appear to have accepted that being debt-free but with no fresh investment is how it is going to be for the short to medium term. The search, it seems, is over.
And in truth, that’s how it has to be. With external investment comes risk, not to mention a potential lack of control, and it is clear that Delia and Co are not about to expose themselves and the club to the former and relinquish the latter. At least not without knowing the club’s future is in safe, wholesome hands. The waters are indeed full of sharks, but many have already been lured in.
It goes without saying that Delia and Michael have the best interests of the club at heart – and after witnessing the shenanigans at Cardiff and, ironically, Hull who could blame them – but, equally, there is not a single owner or investor out there who will tick all of their boxes.
It remains a square that can’t be circled. Do we bumble along betwixt Premier League and Championship in the knowledge that yo yo will could become our middle name, or risk selling our soul in search of the ruble, the dirham or the dollar? I suspect I know the answer.
In fact it remains a hypothetical argument. The previous fruitless search suggests that little old Norwich is not deemed an attractive investment opportunity in the world of high finance, even less so now it has a healthy balance sheet.
Those aforementioned clubs have one thing in common: they were all ‘basket cases’ who were deemed ripe for the picking by their respective angel investors. Chuck Ipswich Town in to that same equation, albeit their particular angel investor hasn’t quite turned out as they had hoped.
Of course, the fact the club, in terms of finances at least, is no basket case makes it a more costly investment proposition. To then expect the investor to live and breathe the club in the way we all do narrows the field considerably…
As ever, there are exceptions to the rule and West Brom and Swansea both look to be making a decent fist of being a Premier League club minus a benefactor. Only time will tell if that model remains sustainable for them in the longer term. I hope it is.
Equally, external investment is far from the only answer. Indeed, if it were to become the only way it would then become a game of ‘my investor is bigger than your investor’ and then off we would all go again.
The Financial Fair Play (FFP) rules are clearly there to reduce one’s ability to ‘do an Abramovich’ but already loopholes are being found to scupper Sepp Blatter’s best made plans, and no-one is expecting to see a significant shift in the pecking order of the Premier League as a result.
But, we are where we are and, as McNally reminded us, our financial position is not about to change any time soon regardless of whether we want it to. It appears the cloth (and players’ contracts) has been cut accordingly and ours is a sustainable business model even while in the Championship, so, in that regard, all is good.
For the club to become a player at the top table for the long-term would require a seismic shift in outlook. One that, for all the right reasons, the club looks unprepared to take.
Would we have it any other way?
Huddlestone was affordable though and suggested by certain people within the club although Hughton did not fancy him, so that blows that theory out of the water re. money. Do you genuinely believe McNally/Bowkett do not aspire to being a permanent Premiership fixture and I would suggest they would have “it any other way”
I agree with the basic premise of the article that City’s position as a club is constrained by its finances. But I am not so pessimistic about the Club’s ability to compete in the Premier league . Just imagine that RvW had brought half of the goals we all hoped he would score. City would then be reinforcing its team again for a Premier league season and with the promising players from the youth team hoping to step up.
I don’t agree that Swansea and West Brom are making such a better fist at consolidating their position than City. If Olsson had not slipped to give West Brom a chance to score at Carrow road, it might have been West Brom facing Championship football rather than City.
What City needs is to focus on long term improvement. Neil Adams has the experience in the Youth team to achieve that. City will always be fighting the odds in the Premier league. But we should have the resources, resolve and constancy of approach to be a contender for promotion when fates conspire to relegate our team to the Championship.
This is a view Norwich City Supporters Trust fully endorses. Recent footballing history shows what can happen to teams like City if the wrong investor trundles up. Coventry, Birmingham, Blackburn, Leeds and Portsmouth come to mind.
The mega-buck investment looks great on the surface but it would be nice if wealthy local business owners were to invest in Club.
Great piece. We have to realise we have never, in all the years of being in the top flight, been a team that is far from the threat relegation. That doesn’t mean we have to lack ambition to be the best we can be. Some (most?) of our most successful sides have been created through a ‘we are what we are, let’s build a hungry side’ mentality.
1) How can you say Huddlestone was affordable? Are you on the board? How can you say Hughton didn’t fancy him? Were you on the coaching team? How do you know he even knows where Norwich is? Gary’s theory is far from blown out of the water.
3) Thank god for a Supporters Trust who recognise financial stability before the mad clamouring for unbridled spending. There are too many people out there who think the Premier League is a license to print money. Too few realise the amount of extra money being put in by owners.
I would rather have the yo yo tag than have a fly by night investor who could get bored and move on to their next toy leaving the club a wreck. For me the problem is that the authorities need to get serious about financial fair play and really hit offenders where it hurts. The fines they use are water of a ducks back, if you are willing to loose £100m what difference will another 10 make. The only punishment that will work is points deduction and by extension champions league, or premier league exclusion. While we strive to break even and set ourselves up accordingly and Man City, QPR, Chelsea et al poor money into a bottomless pit we are playing on a pitch that makes the famous slope at Yeovil look flat.
Whether you have a multi-billionaire oil baron or sheik funding you or not, unless you are in a ‘major’ location (London, Manchester, maybe Liverpool), the best players in the world will not sign up which is now a prerequisite for PL success. Cardiff provided the classic example of that.
Delia + hubby are a great example – it doesn’t mean all the decisions are right but their hearts are in the club..can that truly be said of Hull etc.
The Baggies were very lucky to escape – better role models would be Everton, and Stoke maybe.
Good, balanced, sensible, if a little dispiriting article, Gary. Always wondered why we never (apparently) moved for Tom Huddlestone? What a difference he would have made! On a bright note, at least we have not made such a good fist of it – like Southampton – that our manager and best players are being asset stripped from the club to leave us bare and staring at relegation next season before it has even kicked off.
The money argument rears its ugly head again. We have become so obsessed with being without debt that I fear our aversion will indeed send us back in quicker than ever.
We have all season long used our finances as an excuse as for our poor performances, time and time again letting off Hughton. As Douglas said, if Hooper, RVW, Elmander, or Becchio had scored even a quarter of their potential we’d still be in the Prem, without any additional money.
Even if we accept that it was money, not managers or players that cost us our PL status. Then we have an extremely short sighted board. Could we have thrown money at our issues to make them go away? If so, would 20m have done it and if so, wouldn’t that be 20m well spent? Spend 20m to ensure far greater return on investment. Many companies leverage short term debt for long term benefits.
Yet the money argument falls flat when you see players of similar cost far outperform ours (e.g. Benteke, Lambert).
Still, we didn’t spend more money and now we’re in the Championship. How long do we think we’ll stay debt free? Our revenue has halved overnight and will continue to decline over coming seasons. We’re letting staff go. Our players are now financially inclined to leave. Buying new players will be increasingly harder, riskier, and will be of a lower caliber.
Yet we talk about our club as if it is in great shape.
I wonder if the Supporters Trust are business people. I fear not.
It’s not lack of money that saw us relegated, it was a poor manager. The Board’s strategy was for City to improve their situation gradually – wages were higher last season than the previous, and they obviously started the season thinking they had spent enough to keep City in mid-table. In January Hughton had funds available that he didn’t use.
City cannot jump buy their way to the top, but with PL revenue they can gradually improve their status and finances. Hughton’s (lack of) tactics blew this out of the water. Now we pick ourselves up, dust ourselves down, and start again – without debt. I don’t believe Bowker and McNally lack ambition, and Delia, it seems, will generally follow their advice (though she may have swayed things with Neil).
We are in good enough shape, Dave B (8), better than last time we were in the Championship when we still had debt and no parachute payments. I think the strategy and identity (in terms of style of play) issues are more important now than the financial, and this is where it is up to Adams. He knows the score here too – he will not have been hired just for his strategy for the coming season – so we’ll see.
There is no need to be pessimistic yet about our future, beyond the fact that we got relegated because we had a manager who was clueless about team tactics and building cohesion/ spirit.
If “constrained by its finances” is code for “expenditure does not exceed income” then that’s fine by me.
According to Doloitte Annual Review of Football Finance, only half the clubs in the Premier League made an operating profit in 2012-13 (that’s profits not including net transfer expenditure). In the Championship, it was worse, with only 3 clubs out of 24 making a net profit, which actually increased to 5 clubs once player trades were taken into account.
Whichever way to you try to spin that storey, it’s a pretty sad state of affairs and I, for one, aree happy that “the lunatics haven’t taken over the asylum” at Carrow Road. OTBC
@ No 8 – Dave B
“I wonder if the Supporters Trust are business people. I fear not.”
Perhaps you would care to join the Supporters Trust and enlighten us with your superior wisdom and fiancial acumen?
Gary, you seem to defeat your own argument here. We would be a Swansea or West Brom if the strikers had delivered.
You seem to be hanckering after being a Hull or Southampton or West Ham. I don’t! They seem to be on borrowed time or at least uncertain finances. I’d rather be debt free, even in the championship & trying to get into the Prem.
I’ve never into the grass is greener mentality. Norwich is a well run community based club with local caring backers. I’d far rather this than a Hull etc. even in the Championship.
I found this article,even though realistic quite depressing and the comments that followed. Maybe it’s time to start getting in to that other sport with the egg shaped ball?
@11 GazzaTCC
I was responding to “Thank god for a Supporters Trust who recognise financial stability”. If financial stability is losing half our revenue, followed by continued decreases, then I’m not sure the supporters trust know what financial stability is.
No business, or person, can easily withstand that drop in income and survive without massive changes. Imagine your wage was cut in half tomorrow. And in a year another chunk will be lost. What sacrifices do you need to make to stay in the black? How long can you stay there?
My wife just gave up her job to look after our child for a year and we’ve lost nearly half our household income and I can tell you that I wouldn’t describe our situation as a long term stable one. And I certainly couldn’t afford continued losses. We are having to make sacrifices.
Norwich are debt free now but how long can it last with us resembling the club we currently are with a quarter of the income? What sacrifices will we see? Is that stability?
@14 Dave B
Your initial response (@8) does not make it clear that you were actually replying to the third point @4. However there can be no doubt about your “intended target” with the final sentence @8, which seems rather harsh in the circumstances?
Notwithstanding this, there are two separate points which seem to get confused by many here.
Firstly, we were contractually obliged to pay off our external debt in May 2013, as a consequence of preserving our Premier League status at the end of the previous season. This was not something of the Board’s choosing; it was the renegotiated position arising from the Club being in default of the original banking arrangements around the time of our relegation to League One. At that stage we were, apparently, very close to Administration.
Secondly, the fifty per cent reduction in income for next season is, of course, a direct consequence of relegation and the reduction in TV monies from Sky. It is not something that is unique to NCFC and the Club have recognised the problem with “relegation clauses” contained within all players’ contracts. Whether these are sufficient to cover the loss of income arising from relegation, only time will tell. This is sensible financial management.
Finally, as mentioned elsewhere, being debt free MAY be relevant at a particular moment in time (summer 2013) but, as rightly inferred elsewhere, the situation can change rapidly, especially if expenditure exceeds income. Undoubtedly, there will be those who will “make hay” should the Club actually be “sitting on a cash pile” at the Year End, but that’s an argument for another day. OTBC.
Thanks for your comments folks. Nice healthy debate with not a profanity in sight… and no name-calling!
Russ – Agreed that West Brom were probably not the best example to use, although was more a reference to their longevity in the PL rather than their Houdini act of last season.
Chris/YellowP/Steve – Apologies if you found the read a little depressing… not my intention! Just thought that, given Delia’s and David Mc’s comments on Radio Norfolk, it was worth gauging the general view on whether investment – however riddled with risk it may be – is still considered to be the *only* way City can expect to move up to the next level.
I’m certainly not ‘hankering’ for us to become a Hull, West Ham or Southampton (quite the opposite in fact) but was using them as examples of those who have greater spending power than us virtue of wealthy investors.
As some of you have said… a prolonged stay in the PL would enable us to follow the Stoke model – which relies on steady growth to underpin increased spending – and doesn’t pin everything on a cashflow borne of external sources.
The days of ‘Cullumgate’ seem an awful long time ago now and the figure of £20million derisory in today’s world. Definitely a bullet dodged if there were even a bullet in the chamber in the first place.
Thanks again for your comments – appreciated – and please don’t perceive the piece as my attempt to justify why the search for investment should be resurrected. Was just curious to see if there is still an appetite for it.
In response to Dave B, There are several accountants on the Trust Board but no “Businessmen” per se. I can only say that when you listen to the woes of the fans of Clubs that spent beyond their means you understand the NCFC Board is “better the devil you know…” A point made by David Conn in the Guardian when he reviewed the PL Clubs 2013 accounts.
I think we all understand that there will be changes brought about by relegation and once again it will be the players who suffer the least and those employed on the non-footballing side that will be hit hardest. I fear we can expect redundancies in the near future.
(13) – No, No and thrice NO – never can ‘the oval ball game’ ever replace ‘the beautiful game’ or must it be allowed to – even after relegation and behind the scenes grumblings.
Besides, the local rugby club seem to be affected by the same issues as the footy club!
http://www.edp24.co.uk/sport/other-sport/norfolk-rugby/new_head_coach_appointed_as_norwich_rfc_look_to_progress_1_3583023
@17 Mike
I would recommend asking the accountants the difference between good debt and bad debt.
Delia’s slight racism aside, I’d agree no one wants the ‘camels’ at Carrow Road. And clearly what we’ve wiped out was bad debt, which is fantastic. But that’s not a reason to avoid all future debt. To say we are without debt and x club have debt, so we are the better run club is a fallacy.
If you use debt to create future wealth then it’s money well spent. Sitting on money is an opportunity cost /lost.
Again, I don’t think money (or lack of it) caused our relegation. But many clapped, supported, and excused our way out of the prem until it was too late. Now we’re clapping our financial security just as we’re about to see pay cuts and redundancies.
We’re a very odd club.
Dave B, if you must quote, don’t pick half a sentence and criticise it – the full quote was “Thank god for a Supporters Trust who recognise financial stability before the mad clamouring for unbridled spending.”
The point being, which was made quite clearly underneath, that too many supporters just want money spent without recognising the consequences.
Five years ago we were virtually out of business. I genuinely don’t care what league we are in as long as the club isn’t about to go bust and we are watching entertaining football. Perhaps you are dazzled by the big names in the Premier League but from my recollection that league isn’t the most fun of places because we simply cannot compete with the multi-multi-million pound sides – as Gary points out. Yes, we can snatch a draw or a win against them here and there but otherwise we are always part of that bunch of teams who can easily go down. Accept it, try to get behind the manager and team, enjoy the football for what it is and stop taking it so personally. You might even like it!
The financial sense here has come from the Supporters Trust. Dave B talks as though he understands business, but he’s given away by alomost his first point (‘Could we have thrown money at our issues to make them go away? 20m would have done it’). I know business, Dave – and that’s not how it works. You may bluster, but I’m afraid your cover is blown.
@21 Stewart
That’s a nice “quote”. No idea why you are attributing it to me. Have you been watching the Simpson’s Episode with ‘precious venus’?
I in no way, shape, or form said…
“Could we have thrown money at our issues to make them go away? 20m would have done it”
That’s a statement I NEVER made. You have taken, removed, and reordered words to make it look like I said 20m would have kept us in the prem.
Here’s what I said (note the question marks)…
“Even if we accept that it was money, not managers or players that cost us our PL status. Then we have an extremely short sighted board. Could we have thrown money at our issues to make them go away? If so, would 20m have done it and if so, wouldn’t that be 20m well spent? Spend 20m to ensure far greater return on investment. Many companies leverage short term debt for long term benefits.”
I said I think we could have stayed in the prem without any additional outlay. I also believe that it’s perfectly fine to acquire debt (as in my example) if it leads to future wealth and is manageable. We have turned debt into a dirty word, despite most of us not being able buy homes without entering into 20+ years of debt.
Our aversion lead to us signing completely unproven PL players who are now highly devalued assets. Would it have been more prudent to spend more and not end up with Ricky, Elmander, and Becchio? Probably.
On the other end of the spectrum McNally was completely correct to decline all calls for ground extensions. Those would have been costly with minimal return on investment compared to a lengthier PL stay.
What I do object to is the notion that we should avoid debt at all costs and sitting in the Championship debtless, while laying off staff, cutting wages, and with vastly reduced revenues, is somehow better than being in the PL with manageable debts.
@22 Dave B The presumption that we could have spent additional in excess of our income through further bank borrowing just simply isn’t feasible in the current economic environment. You are implying that this is the Board’s choice when, in reality, it’s a completely unrealistic assumption because no bank would lend for such purpose at the moment, irrespective of what you believe. OTBC
Dave: I quoted verbatim your question, and accurately summarised the answer you gave. Don’t act so wide-eyed and innocent.
As for outlay, RvW was a spectacular failure. But what about Olsson, Redmond, and before them Snodgrass and Howson? Better value than pretty well any similarly-priced players bought by other clubs (ask any Villa fan!). Overall, we got a fair squad for the money we spent. Our mistake was hoping – and in the case of many fans, expecting – a third successive season of finishing way higher in the league than our resources as reflected in spending, wages etc. Lambert and Hughton both pulled off that trick once; Lambert ducked out of trying to repeat it, Hughton couldn’t.
In that sense, with a different formulation to the one you propose, it might have been good business to have broken our wage structure and brought in a Tom Huddlestone or Shane Long. But hindsight is a wonderful thing.
Of course, the Championship is a very different animal from the Prem. In addition to the huge benefits of being debt-free and having wage cuts built into every player’s contract, we can sacrifice some of our individual quality and still have a very competitive squad. If the manager can galvanise them.