Financial challenges ahead?

[David Evans]

Just seen this article...
http://www.edp24.co.uk/business/norwich-city-reveals-accounts-for-2018-1-5749099

Sounds like at the end of this season we are facing a drop in income of £32m and a £10m tax bill?

I'm not a financial person but this sounds like a problem to me, hopefully someone with more financial experience can explain how we will manage this, obviously promotion easily solves the issue but that's a very big if, I assume it will be a case of selling our most talented again and cutting high wage earners but would that even be enough?

 

[dj161]

just read through that and Jex Moxey got £400k for his short spell here, I assume some of that must of been a pay off

We still have money to come into the club from the Maddison and Murphy deals, I assume we're probably still receiving payments for Jacob and Pritchard too, obviously we do have some sell-able assets in Cantwell, Aarons, Lewis etc if we really need the money but I'd like to think we can hold on to them, though it does make it seem unlikely we can keep hold of Klose unless we go up or he's prepared to take a wage cut

hopefully we can solve any financial issues by being promoted, though I imagine we'll be highly restricted in what we can do financially in the premiership, can't go spending mega bucks as we have some debts to pay off and also we don't want to find ourselves in the same situation as this we're we spend a fortune and go down, if it means being a yo-yo club for a few seasons so be it, the long term health of the club is what matters most

 

[morty]

I got the, perhaps wrong, impression that we were over the worst of it?

 

[hogesar]

Ed Balls honest and frank at least. Still not in the best position financially but nothing getting promoted this season wont solve!

 

[Fenway Frank]

I think the finances are manageable but we will be showing a loss which in football terms would be quite small. Nothing like the amount of debt that lot down the road have anyway , they really are in a mess aren’t they ?

 

[dj161]

I think as long as we're sensible with our spendings we'll be fine, if we go up and start trying to throw 8 figure offers at players thats when we'll find ourselves in trouble, plus that would totally negate everything we've tried to do in the transfer market the past couple of years

 

[morty]

I just picked this chart up off twitter, and am a bit confused. Doesn't financial fair play limit the upper percentage of your income that you can spend on wages?

 

[morty]

Just tweeted the guy who posted it, and in league one it is 60%, league two is 50% and in the Championship you are allowed a loss of 39 million, spread over 3 seasons!

 

[dj161]

so Blackburn are spending twice as much on just player wages as their total income for a season, or am I reading that wrong?

 

[morty]

so Blackburn are spending twice as much on just player wages as their total income for a season, or am I reading that wrong?

One and a half times, so if their income is 10 million, then they are spending 15 on wages. Crazy. But Birmingham? Ouch!

 

[morty]

However when you look at what each teams income is, it provides a bit more context. Ours remains high due to good gates, and catering income thanks to Delia. It shows very much that there seems to be a "going rate" to compete in the Championship and just how much our gates and catering really give us an advantage.

 

[morty]

Some of the teams there will not seem right, mainly because theres only us, Birmingham and Hull who have released our accounts so far.

 

[Fenway Frank]

Birmingham have “arry to thank for their wages, isn’t Jota on £40k a week or something ?

 

[dj161]

One and a half times, so if their income is 10 million, then they are spending 15 on wages. Crazy. But Birmingham? Ouch!

thats actually who i meant, but typed the wrong name, thats a crazy amount to be spending, no wonder teams end up in administration

 

[dj161]

looking at the matchday income, Villa Park holds 42,000, we can hold around 27,000, yet they are only getting around 10% more in matchday income than we do, yet them singing 'my garden shed is bigger than is' seems kind of ridiculous if its empty

 

[Canaryboy]

Sounds like at the end of this season we are facing a drop in income of £32m and a £10m tax bill?

Over the course of this whole season, not just the end of it. That's the amount of parachute payments we received last season (£32m),this season we get £7m in Football League television rights instead.... so a drop of £25m.

So the drop in income has already happened / is already happening. But we'll be receiving a further installment for Murphy and Maddison of an unstated sum in this financial year which will hopefully cover the £10m tax bill, or most of it?

I suspect the next set of accounts will report a financial loss as our wage bill will still be too high for our level of income this season. This is why McNally was so irresponsible in that last transfer window, he gave 3.5 year contracts in January to players knowing that failure to stay up would mean that we were liable to pay them beyond the scope of our parachute payments. That was an irresponsible financial gamble and now we're paying the price for this season (Naismith and Jarvis in particular).

He was right to resign for that reason I think. Can mitigate that with the fact that he signed Maddison of course, but it was still irresponsible.

.... bet the club are counting down the days to Naismith, Jarvis and Wildschut coming off the payroll. No doubt McGovern is on far more money than he should be too.

Then there is Pinto who is out of contract and earning big money for not playing, so we'll try and sell him in January, and Oliviera hopefully finding a new home.

I hope that the further cost cutting can mostly come from the above players leaving, although I personally doubt that it will be enough to be able to afford to keep Klose, especially if we have designs on keeping Rhodes beyond this season.

Really hope that failure to go up this season doesn't mean we have to sell Lewis or Aarons to balance the books for next season

 

[Din]

Yeah to be fair, you would think getting Naismith, Oliveira, Pinto, Wildschut, McGovern, Jarvis, Franke and maybe Husband off the wages, and Klose either going too or taking a pay cut, we'll be able to shed a significant portion of wages for next season.

In all honesty I thought from this season onwards, following Maddison and Murphy's sales, we now no longer have to sell to buy. Is that the case or are we not really sure?

Of course if we go up then our problems solve themselves

 

[Fenway Frank]

I guess the agm will make things a bit clearer