MrBunce

I voted for Sargent. He might not have been the best player or played the most games. But he's been by far the most important. Record when Sargent starts: P21 W14 D4 L3 pts 46 ppg 2.19 Record when Sargent doesn't start: P22 W7 D4 L11 pts 25 ppg 1.14 Extrapolated over 43 games: When Sargent starts: 94 points, 1st Actual: 71 points, 6th When Sargent doesn't start: 49 points, 17th

I broadly agree. I'd 100% take Farke over Wagner. I'd very likely take McKenna, Corberan and Robins. I haven't seen enough of Maresca and Rosenior. I'm unconvinced on Martin.

Hogesar: I know Idah/SvH is your pet topic but stepping back has it really made any difference. Looking at the results, I can't see how any of them would have been different with Idah. The team were well beaten against Leicester and Boro. The draws away at QPR and Blackburn are decent points on the road where leads were let slip. Besides, Idah hadn't scored in nearly two months by the time he left and only twice in five months - despite a lot of game time. I'm willing to trust Knapper's and Wagner's strategic judgement on this, even if short-term it doesn't seem to have 'paid off'. All: Back to the topic at hand, a hypothetical question: looking at the other teams at the top of the table, which of those would you take over Wagner? (i.e. Maresca, Farke, McKenna, Martin, Corberan, Robins and Rosenior)

Yesterday Mark Attanasio was at the FT Business of Football Summit. He was a panel member discussing: "Panel of Investors: Building a long-term strategy to make money from football". (Unfortunately very expensively paywalled)

My view regarding EFL approval is from reading the regulations. Helpfully, the EFL provide a Q&A on the Owners and Directors Test. On control they write: "The Regulations also allow the League to consider shareholders holding less than 25% if they are acting “in concert” with others and together they go over 25%, and the definition of ‘control’ also applies to persons who have been given the authority to give directions or instructions which the Club’s management are accustomed to act in accordance with." Leaving that aside, I completely agree with you that it is odd regarding the FFI which is an obligation. Perhaps 1+1=2 didn't twig for the EFL or the Club didn't fully meet it's requirements. I don't know. However, I feel safe in saying that something doesn't seem right. Taking a hypothetical and say it turned out Mr Attanasio is a loan shark (he's a distressed debt investor after all!). Joking aside, Norwich miss their budget end of last season, they default on the loans to Mr Attanasio. An inability to refinance could lead him to putting the club into administration. I do not think for one moment that ever would or will happen. Maybe you think I'm crazy. However, it happened to Wigan - their new owner put the club into administration the day he took control of the club. That this saga is still rumbling on, with no resolution from the EFL in sight, seems like a loophole that could allow unscrupulous owners to cause severe damage to a football club. (I've now removed my tin foil hat)

Leaving aside that it's Norwich and Attanasio, it's remarkable that an individual who has not passed the EFL's Owners and Directors test can reportedly (via his apparent involvement in football affairs) and actually (via his financing of the club) have such significant influence on a football club. I absolutely don't think that Attanasio is a wrong'un, but it's concerning that there could be a football club out there who could get unlucky with an unscrupulous owner and 'fall through the cracks' like Norwich seemingly are at the moment. P.S. I'm still of the view that Attanasio should have been required to pass the Owners and Directors Test (not just the Directors Test) in September 2022 when the Shareholders' Agreement was entered into.

Something to bear in mind, those sums spent on wages and transfers were for a team that were relegated. Those would have been substantially higher if Norwich had stayed up. Both player bonuses as well as transfer add-ons would have been due.

I think you should be able to sign up for a free trial to Swiss Ramble's substack and cancel (if you choose to) before the first payment. @PurpleCanary is correct r.e. directors (Zoe Webber's) remuneration. A few things jumped out at me (among others): The highest ever wage bill for a relegated club in history (and as I mentioned last year, spending on wages being similar to many 'established' premier league sides. Kieran Maguire mentioned on a recent Price of Football podcast that only Man United did worse on a £wage per goal than Norwich. The club spent more on wages and transfers than Brentford (recall the narrative pushed around that). That last years' revenue was the second highest in Championship history. That last years' wage bill was the the fourth highest to not achieve promotion behind Villa x 2 and Bournemouth (both clubs, if I recall, effectively broke FFP in getting promoted). It would have been even higher if the club had been promoted due to bonuses.

I think that's right @PurpleCanary and @GMF. With the Owners' and Directors' Test you've got effectively a list of conditions that disqualify you from becoming a director of a football club. Those are really quite a low bar to pass. The other part relates to acquisition of control, i.e. becoming an owner. That part principally requires you to provide a substantial amount of financial, corporate, legal and personal information to the EFL. The EFL then checks this information and decide whether to approve the acquisition. The non-exhaustive list of information is set out here (Appendix 3A) : https://www.efl.com/governance/regulations/#heading-pursuant-to-appendix-3-the-acquisition-materials-are One of those bits is (among others): "List of registered holders (together with details of the current and proposed ultimate beneficial owners (“UBO”), if different) of the shares of each entity within the Group (including name and address), with details of the shares held (or owned) and copies of any share certificates" Presuming that the new director is one of the investors in Norfolk or a director of that company, then their details would be disclosed as part of that exercise.

Is there a sherry tap on the beer wall?

Thanks to @Mutley and @vos for the reference - it'd passed me by. I can't recall how the bonds worked now. But it was probably along the lines of needing to fill out a form to get your principal back and those individuals not requesting repayment for whatever reason (forgetfulness, generosity, who knows). Either way, that money is interest free for the club.

Is there an echo in here? Haha

That's right. Given the player sales in the summer, plus some more belt tightening the club will likely have the cash to cover all the debt. Though it may have chosen to use that money to invest off the pitch and to enhance the squad this summer (as mad as it might seem right now). It will mean, however, that the club will have a limited player transfer budget (as seen this summer). The main issue is that, all told, the club will have shelled out some £10 to £15m in interest expenses over the past few seasons. With a tight budget, that's a lot of money to be missing out on when, it's fair to say, the returns from spending that borrowing have been disappointing.

Yes the club has around £96m of debt, this is broken down as follows: £31m short term loan secured on parachute payments, due to be repaid in full by March 2024, interest rate of 5.75%. £14m short term loan secured on transfer instalments, due to be repaid in full by September 2024, interest rate of 5.6%. £37m loans from Mark Attanasio (Norfolk FB Holdings LLC), due to be repaid at various dates (likely) between June 2023 and February 2024, interest rates not fully disclosed, but predominately at 11%. £900k loans from Delia, no terms disclosed. £10m C Preference Shares, held by Attanasio (Norfolk FB Holdings LLC), interest rate of 7%. £1.4m B Preference Shares, interest rate of 4.5%. £2.2m of Canary Bonds outstanding and not redeemed, no interest payable. The majority of these debts are due to be repaid (and likely will be) by the end of this season: All £31m of the loans secured on parachute payments. £8.6m of the £14m of the loans secured on transfer fees. At least, £27m of the loans from Attanasio (£21m line of credit due for repayment on 30 June 2023, the convertible loan (£4.7m) and a loan for £1.6m due for repayment on 1 September 2023. Some loans may be refinanced or the terms extended (for example, the line of credit). The club incurred £3.2m in interest in 2022, £5.4m last season on some/all of these loans. I estimate a further £1.9m to £5.4m dependant on the repayment timing of these loans. How did the club get in this debt? Principally, because the club has made operating losses of £82m over the past three seasons. After accounting for player trading, the club has made a loss of £19m. This figure is £41m over the past two seasons, after a significant reduction in player trading profits, £3.6m. Over the last two seasons the club has spent £72m cash on player transfers and received £46m (a deficit of £26m). The main reason for this is that the club loses money when it is promoted to the Premier League due to reduced broadcast income and player wages plus larger promotion bonuses. This is usually made up with large profits in Premier League seasons, however last time out the club lost money due to spending a very large amount on player wages (£118m vs £134m revenue). This has been compounded by relegation to the Championship (thus lower revenue) resulting in operating losses plus a reduction in player sales.

I would imagine the club continually assess their foreign currency exposure and risks. I've heard before that some clubs do engage in hedging - for transfer fees payable and receivable, foreign currency borrowing, international/European football money. It may be the case that Norwich are hedging but it might be a partial hedge (you aren't forced to disclose under FRS102). They may not be hedging at all. I'm not sure how accessible and affordable hedge facilities would be for an entity like Norwich (it's outside my area of expertise).

If I was putting a wager on, I would bet that most of the debt to Mr Attanasio has been or will be paid off this year. The line of credit (up to £21m) and first loan (£1.6m) matured 1 September 2023. The convertible loan (£4.7m) should be turned into equity pending the EFL's approval (I'm still of the view that Mr Attanasio should have needed to pass the Owner's Test when the Shareholders' Agreement was signed). The maturity dates of the promissory notes ($2.1m and $7.7m) hasn't been disclosed. So they may have further to run. I think the player sales have likely freed up enough cash to negate the need to refinance. That's pretty good news. It doesn't negate the fact that the club have shelled out a lot in interest. Over the past two years £9.1m (accounting) and £8.0m (cash). I predict another c.£2m to £5m in interest payable for the current year. In terms of FX, the club recorded an FX loss of £566k last year (£154k loss the year before). However you cut it, it's quite a bit of money that's gone out the door to service debt at the expense of financing the club's operations. I've said a number of times, that I'm not a fan of the proliferation of secured lending in football. From my point of view, all it means is that you take from future seasons to take a punt. In Norwich's case, the club took a punt in the Prem and mortgaged the parachute payments and future transfer fees. Those stated maturing last year and so with the well drying up, the club have had to turn to Mr Attanasio to fill the breach. He did, now the club have paid the price this season (look at the summer's transfer business).

Thank you for sharing Nutty. As ever, clear and engaging discussion from Kieran Maguire. Two things jumped out at me (leaving aside the basket case of Championship football finance which I'm well aware of). First, he mistakenly (initially) said the owner loans are interest free. The loans from Mr Attanasio are not interest free. We don't know the rates as they were not disclosed in the accounts but from what we are saw in the disclosures for the GM last month, the loans appear to be at a rate of 11%. The C Preference shares have an interest rate of 7%. The interest on the loan from Delia is not disclosed. Kieran later says these rates are generous (or words to that effect). I'm not familiar enough with the high yield private credit market, but 11% doesn't seem overly generous or punitive to me. I estimate, using some fag pack maths that the interest bill for next year will like be in the range of £2m to £5m which will be a significant dent in the club's finances. Second, a great deal of the discussion was on the figures from the year before (i.e. the Prem season). I think it highlights just how poor those figures were or, more accurately, the return on the cost of those figures. It has very significantly negatively impacted last years' finances. Similarly, those finances will have a significant negative impact on this years' finances.

How I long for David Fox. Billy Gilmour is a poor man's Fox! (should I be wary that a certain Scottish poster might appear?)

@chicken - two very thoughtful posts On the financials, I would say we're definitely worse off. For the first time in this century, the club has fewer assets than liabilities. The club is effectively insolvent. Now this isn't a big deal in the world of football as most clubs outside the Premier League are insolvent, but it is significant for Norwich which has historically had to balance the books. Net debt is higher than revenue for the first time since 2011 (i.e. post League 1). Wages as a percentage of turnover (and wages plus amortisation) is actually worse than those seasons where we held to randsom, lumbered with players like Naismith. You've pointed out that some of the loans are accounted for with this years' revenue - but equally that is revenue that can't be spent on financing this years' operations. £31m of broadcast revenues, that is some 40% of this years', likely higher, revenue, will go towards paying that debt. So even with players sales more belt tightening is required. Granted, the facilities are much better - that can be seen in the numbers (as an accountant, I, completely unbiasedly of course, think the numbers can tell you almost everything!). In the McNally era capital expenditure (capex) was consistently lower than depreciation (i.e. the club were wearing down the assets) - thus we had leaky conservatories. The past six years, the club have invested more than depreciation. Similarly, capex as a perctange of revenue has averaged around 8% of revenue, in the ten years prior it was 2%. However, I will point back to 'virtuous / vicious' circle. The proposition for players joining Norwich two or three years ago is definitely different to now - great facilities or not. On transfer business, I think we are probably talking across each other. You are spot on that we've sold a lot of academy players for good money. I think I've said that many times. Webber has done a great job on getting some great fees (and those are even better with hindsight). But I stress again, a big part of the club's strategy has been signing young players with potential, to improve their value and sell on for a profit. This sadly hasn't happened outside the few examples we've discussed. That's not to say our transfer business overall has been bad - I think the opposite! Though, the transfers in the last Premier League season (and to some extent the season before) were poor. That is an issue, because even 500k disappears into the ether of a Tzolis / Rashica / Placheta / Hugil. We have done a great job in loan fees (which I noted last year) - £6m in the Prem season, £1m last year. You ask, very importantly are there any other clubs following this model. The answer is probably not! @Parma Ham's gone mouldy has written many excellent digests on this. There's two very obvious reasons: (i) most clubs have rich benefactors that bankroll their club - Norwich does not; and (ii) it's very hard! Norwich have done a great job at competing with limited resources. However, arguably one and a half bad seasons and the club is insolvent with nearly six figures of debt. We've had to resort to a distressed debt hedge fund manager to loan money at 11% (though I believe he's benevolent)! It's a game of extremely thin margins and it can go wrong very quickly!

Thank you calling out that Mumba clanger Chicken! Oh dear. But if you'll indulge me being a tad sneaky though, the rest kind of emphasise my point. We're really getting into chicken feed (!) on some of those transfers. I'm pretty sure Dennis for example was a freebie. Though Bushiri was, I recall, an absolute screw up by Hibs who didn't want him but played him too many times and then had to sign him! The rest is a fair comment. I made a similar post a few years ago (so really I'm just cheekily reusing old content). I made the same point - that players like Vrancic and Stiepermann etc have been invaluable. But. BUT. It is fair to be harsh here. That's because the club's model is predicated on making significant money from player trading. It's been repeated over and over again. Including in this set of accounts! Yet, the record is definitely mixed financially. So I think it is fair to ask - is the model working?

I appreciate the riposte. I wasn't saying the club didn't pay for the works (apologies on the double negative), rather the funding came from fans via the Canaries Bond. Whether the work would have happened with alternative funding, I can't say. However, I do recall the club being pretty strapped for cash at the time. I bring it up as I do feel that Norwich fans have time and time again shown they'll back the club with their support through thick and thin in so many ways, including financially. I'm really proud of that. On the transfers, it's been discussed a lot of times over various threads so I don't want to relitigate that too much. I think there was a general consensus that the closest comparators in terms of business model were Brentford and Brighton. Two clubs that were competitors of ours for some years. (I'm sorry in advance to the person I'm pinching this off, but I can't remember who it was [see edit below]) It was pointed out that what we were doing was innovative 5 years ago but the world of football has massively caught up. Almost all clubs use sophisticated data analysis today. It's not clear to me how well the club have continued to innovate to keep ahead of the game. [edit: the poster in question is @repman and his excellent post in Parma's state of the nation thread]

I think that's fair. The budget is going to be very tight this season. You've got the c.£30m in parachute payments going to the lender (pretty much all of it). Another £8m of transfer receipts that will be going out the door. Plus interest on the remaining loans. On the Webber era, leaving aside the on-pitch success (and failure) there has been a lot more investment in Colney and the training facilities. That is a feather in the cap. But we shouldn't forget that it was the fans that dipped in to their pockets to fund it. He's had a good record of developing and getting money for our academy players. However, then I think we left a lot on the table when it comes to say Cantwell and Aarons. I don't know whether it's 77 players he's signed (mentioned earlier in the thread). However, there are only three players he's signed that we've sold for a profit: Buendia, Omobamidele and Marley Watkins. There's always going to be many players you won't make money on but I think to only make substantial profits on two transfers must be considered poor business. [ @chicken pointed out some mistakes on this - see their post below] That's reflected in the financials. I personally think the club is in a significantly worse position financially, though I'm sure others would disagree.

I posted this in the accounts thread, but it ties into what is discussed above, so I thought it helpful to repost it here: As a chartered accountant, I put little value on the strategic reports that accompany financials as they are usually fluff. However, I wanted to draw attention to and comment on the 'club model' on page 14. This shows a 'virtuous circle', clockwise from top left: better on-pitch performance > enhance[d] club and player profile > increase in player and commercial revenues > increase investment in people and facilities > increase player productivity > develop higher quality players and back around. When things are going well the perhaps this model works. But as the wise Ricardo will tell you, the fortune of all football clubs rise and fall. Norwich is a club which over the past two years is on the fall. And so the 'virtuous circle' can become a vicious one. Worse on-pitch performance has led to reduced club and player profile this has led to a reduction in player values (think Aarons, Cantwell etc.) and commercial revenues (see above). This will, aside from bringing the beggar bowl to Mr Attanasio a reduction in the amount the club can invest in people and facilities. That may then reduce player productivity and the ability to develop quality players. I'm not saying the model is broken. What I will say is that all strategic models need to have contingencies for when things go wrong. The club will need to adapt to its new position (from a club on the rise to a club on the mend). Being somewhat churlish, the club really need to stop wasting time and get on with things.

More like £95m. £80m of that is due to be repaid this season. Some of that will be repaid from parachute payments and transfer fees. Some will need to be refinanced at potentially higher interest rates.

A mixed bag of results (same as last year). Let's deal with what seem to be the four big issues: (i) revenue; (ii) costs; (iii) the debt; and (iv) 'investment' in the playing squad. TL:DR: Revenue down due to TV £, other money stable, low growth. Wages down a lot, but still too much. More cost cutting coming. Debt nearly £100m, its a lot and will need refinancing or money borrowing. Cost of squad peaked, less money to be invested in future, club reliant on player sales to keep lights on. Revenue Headline revenue fell from £134m in 2022 to £75m in 2023(i.e. nearly £60m). £54m of that fall is due to broadcasting revenue falling. The remainder from commercial income falling (principally catering: £6.1m to £4.2m and sponsorship and advertising: £7.4m to £4.3m). The revenue of the club is dominated by broadcasting revenues (76% in 2022, 64% in 2023). Try as they might, the club just can't seem to get big growth out of the other revenue generators. Gate receipts were £10m (only slightly down on the last prem season). However, they are marginally lower than the amount generated in 2015 (£10.7m). The options to improve this are limited: (ruinously?) expensive ground expansion and/or increase in ticket prices (in a cost of living crisis). Things aren't much better on the commercial front, though there is some growth. Commercial income was £17m, down from £21m. This is up from around £13m in 2015. But it's small growth. Catering income was £4.2m which is around the last 15 year average. Commercial and Sponsorship & Advertising clocked in together at £9.6m, this compares to £8.5m in 2019 (1st Farke promotion season). Overall, I would say, slightly disappointing. It's good that the club have managed to keep non-broadcast revenues steady post relegation. However, the club continue to do a lacklustre job in growing that revenue. Costs Staff costs more than halved from £118m in the prem to £56m. This is impressive cost control. However, two qualifications. First is that the £118m can only be described (fairly!) as a calamitous overspend. The second is that a significant portion of that seasons wage bill would have been to the four loan players signed that season (Gilmour, Kabak, Williams, Normann). Other employment costs which includes loan player fees was down from an eye-watering £15m to £2m. This would include the fees for Ramsey, Hayden and Marquinhos. I would assume it would also likely include the compensation (if any) to Dean Smith and his staff (the club have not set out compensation amounts for many years now). So in all, this should be seen as a good result. Amortisation was steady at £23m and likely reflects a peak as the cost of the playing squad is likely to fall over the next year or two. Staff costs as a percentage of revenue was down from 88% to 75% which is a positive. However, staff costs plus amortisation (a proxy for the total cost of assembling a squad and putting them on the pitch) was once again above 100% (i.e. it cost more to acquire and pay wages than the club brings in). It's above 100% for the third year in a row and fourth time in five years. It highlights again that club is heavily reliant on player trading to balance the books (or not)... Debt By my calculations net debt stands at a whopping £94m up from £65m. One of the key questions in the Attanasio thread was whether the money he's put in was to refinance the parachute payment loans or not. The answer is clearly that it was to plug the gap in last years' finances. As at June 2023, the club had borrowed £36.6m in loans plus the £10m from the C Preference shares. On top of this is the £45m in secured loans (on the parachute payments and transfer fees due). In pure cash terms, the club paid out £5m in net interest last year (£6m on an accounting basis). That is a lot, over £100k a week and roughly 8% of revenue. I would agree with other posters that the disclosures around the loans from Mr Attanasio are inadequate. From what I've pieced together from various sources these loans predominantly accrue interest at 11% and were due for repayment between June 2023 and February 2024. It would seem likely the club will need to refinance all or part of these loans this season, which may incur further costs and result in even higher interest payments. On a much smaller note, Delia and Wynn Jones loaned the club c.£900k, the purpose of this loan is not disclosed. Investment in the squad The total cost of the playing squad stood at £90m in June 2023. As noted above, this likely reflects a high point and subsequent sales (principally Rashica) will see that figure fall. For the first time in many years (since 2018) the club have reported transfer fees received post-year end (for Omobamidele, Aarons, Raschica and Mumba). These total £21.4m. I can't help but feel the club may have been pushed to include this disclosure again given that (as mentioned above) the club will have to sell players in order to keep the lights on. Last year the club spent £15m on Sara and Nunez. For this season, the club spent £3.4m (with potential add-ons of £2.4m). That would seem to be mostly for Fassnacht (c.£3m) and a small amount for Fisher. The other transfers being reported as freebies. The club is on the hook for potentially up to £65m in add-ons if conditions are met. However, on the pitch performance would suggest most of this is unlikely to happen. A short word on the strategic report As a chartered accountant, I put little value on the strategic reports that accompany financials as they are usually fluff. However, I wanted to draw attention to and comment on the 'club model' on page 14. This shows a 'virtuous circle', clockwise from top left: better on-pitch performance > enhance[d] club and player profile > increase in player and commercial revenues > increase investment in people and facilities > increase player productivity > develop higher quality players and back around. When things are going well the perhaps this model works. But as the wise Ricardo will tell you, the fortune of all football clubs rise and fall. Norwich is a club which over the past two years is on the fall. And so the 'virtuous circle' can become a vicious one. Worse on-pitch performance has led to reduced club and player profile this has led to a reduction in player values (think Aarons, Cantwell etc.) and commercial revenues (see above). This will, aside from bringing the beggar bowl to Mr Attanasio a reduction in the amount the club can invest in people and facilities. That may then reduce player productivity and the ability to develop quality players. I'm not saying the model is broken. What I will say is that all strategic models need to have contingencies for when things go wrong. The club will need to adapt to its new position (from a club on the rise to a club on the mend). Being somewhat churlish, the club really need to stop wasting time and get on with things.