Following the AGM I feel that this sporting thread and the Mark Attanasio financial thread are converging.
As I suppose they must.
Delia came over a little resigned, disillusioned and deflated before, during and after the meeting. I suspect much that was said by Attanasio, Knapper and others in the audience rather fed into that feeling too.
The feeing of an era passing.
‘We do not have to guess if we can read the book’ is one of my father’s wisest sayings. For those who were really paying attention, there was a lot said - a lot of hiding in plain sight - much of which we had speculated, observed and calculated.
Delia referred to the past, to rescuing the club, to the fear of debt, to where we have come from.
Mark Attanasio spoke of now being ‘Comfortable with the debt’.
Ben Knapper spoke of decisions going forwards that could be made ‘on a sporting basis rather than a financial one’
These are both significant changes.
Avoiding the extreme cliff-edge of absolutist self-funded Finances allows for Sporting decisions to not be compulsive acts of self-harm. In practical terms this means you sell Buendia after relegation, not in the summer before promotion having promised the squad to ‘come back stronger’.
Attanasio is ‘comfortable with the debt’ because it is now internal. Though of course it also floats on a bed of equity. Yes realisable only upon sale - and upon profitable sale at that - though Attanasio was ‘only this morning talking to Australia’ about ‘third-party funding’. He repeated several times that he will ‘later…look for third party funding’.
Let me clarify in practice: buy into the club cheaply as it struggles, take overall control, try to achieve success within the nominal equity gain bequeathed, sell minority shares on the up to third parties, end up with an appreciating asset. The club owns its own stadium, its own training ground, further land and the squad of players are liquid assets.
It’s a different world we are going into now. Some benefits, some drawbacks.
As @nutty nigel has repeatedly pointed out, fan ownership goes with Delia. Local connections go with Delia. It stretches back a long time. The question ‘why would you invest in a baseball club in Milwaukee?’ is a perfectly reasonable one.
Here are some positives noises from Mark Attanasio for balance:
MA: Finance Committee plus MA Group meet, budget 2 years ahead, ‘comfortable with current debt levels, must compete in your division, must have Premier as goal’
MA: We must be a Premier League Team […to achieve our ultimate aims..]
MA: We will later look for 3rd parties to come on board [invest, buy stocks]..talked to Australia
MA: 35 of 92 football clubs now have American owners or notable involvement..
MA: Compete…NCFC attractive…community..similar Milwaukee..passion…sport..family
MA: Crescent Capital London office..FT editors talked about Norwich!
MA: Stadium, infrastructure [Ressler]…
MA: #1 Competitive Team…’keep trying to compete’..
MA: Keep adding players…repeatable system…(with BK reports and analysis)..provide finances…younger players…actually costs money…academy not often ready immediately…buy quality
MA: We’ll support BK recommendations..firm foundations in place to make sure we stay up…
MA: Correlation between money and success clear
MA ‘I know how to raise capital…will bring in 3rd parties..about Finance …aligned group at Milwaukee…’
Mark has been talking to Ben for a while. They talk. They text.
For anyone left in any doubt at all about lines of demarcation and roles and responsibilities ( @Don J Demorr ) Ben and Mark made it very, very clear. There has been a sudden land grab. All the sporting power is now with the Sporting Director:
BK: The Head Coach sets up the team, works with them during week (‘just like the American model in Baseball’)…’all the recruitment is my responsibility’
Of course ‘it would be crazy to bring players the head didn’t want’ and ‘that won’t happen’ …but that role is at my door…
The Head Coach - let’s call him Daniel for argument’s sake - will still be the lightning rod for ills of course.
This of course exactly suits the smiling Attanasio. He now (already) holds Ultimate power. He’s putting the money in. He may say that he doesn’t fully understand the game, though he does understand data. He can check it. Measure it. Watch over it. Control it. He carefully selected Ben Knapper due to his data background. Knapper referred to ‘Mark’ regularly. There were lots of candidates. ‘CEO types’….Director of football types with more ‘experience’….though someone who mirrors the baseball process, is data-driven, fresh, young and grateful (easily-controlled by the paymasters?) is perfect. Yes I suppose so.
I think Ben Knapper came over extremely well by the way. We liked him. Different threads and thoughts often co-exist in football and life though…
Ben Knapper stated the following:
BK: Deploying assets on the field that are depreciating is to be checked
BK: Roles & responsibilities, lines of communication…(all recruitment is driven by me)
BK: Age increase in squad was conscious decision [back then]..leadership..reacting to other situations…went too far…[over]reacting to other situations…
BK: Oldest squad in league…not good for self-funded..so assets to be injected into the squad…young age = value..that’s the focus going forwards..youth is my personal history…must also give them exposure!
BK: Injuries..highest output in league…explosive actions [a lot to ask for oldies?]
BK: Long term view is the way that I work
BK: Ultimate responsibility for recruitment with SD [Head Coach must be happy and on board]
BK: Age profile key ….there will be money from MA to invest in quality youth (not cheap)
In case we were in any doubt that Mark’s money is going to change how Ben can act, Anthony Richens confirmed the following:
AR: Debt has moved from external to internal
AR: ‘Can now make decisions on a sporting basis’…(so couldn’t before)…
’..It’s ultimately still a player trading model ….and always will be..’…(though not sporting self harm as previously)
AR: £2.8m historical tax error [Auditors missed?]
The questions the Company issued in writing to the club for the AGM were surprisingly not referred to or addressed…
1.‘In light of your investment in the redeemable C-preference shares, your re-financing of other club debt and your notable history in finance – all set in context against a backdrop of the increasing trends and desires in America for consolidated multi-sport franchises - what is your exit strategy?
2. ‘Did you or any of your connected companies take a commission for any of the debt refinancing?’
3. ‘Given Delia and Michael’s repeated insistence that they would “not take a penny out of the club” do you consider there to be an inherent equity gain in the business and what do you internally value the equity gain at? What will you do with it?
….Though of course they were ultimately questions that were protective of Delia and her legacy - and questioning of Mark Attanasio’s ultimate intentions and motivations. Our belief is that they reached the right ears as intended.
Regardless they de-facto got answers at the meeting in any case. Hiding in plain sight you see.
1. Pump some early money in*, increase the value of the overall asset, take on Third Party investment. On the phone to Australia about it this morning ’ (Australia? Not the tightest of criteria then….)
2. Bought C-Pref. Other internal (own companies or finance partners). No mention of charging interest. ‘Comfortable with it’. No mention of under what circumstances such loans or interest might be redeemable.
3. Early funds injected up to £43m (our figures) are riding on Delia’s handed-on unrealized equity gain. This can cover the early cost of buy in, then can sit on the Equity until a major offer appears ‘that can’t be refused’…
It wouldn’t be too much of a stretch to suggest that Attanasio ‘looking good’ early on is actually doing so with Delia’s money.
She has been a wonderful benefactor to Norwich. She gave what she could. It wasn’t enough and as time went on we had to injure ourselves to survive without even much of an overdraft. We were scarred by debt in a world that had fallen in love with it, got addicted to it and used it as a financial game of pass-the-CDF-parcel.
It was all a bit of an anachronism and - along with Webber’s desire to polish his own buttons - it cost us Farke, a year of Buendia at the top level when we were on the up and left us with daft players we shouldn’t use, who in the end nobody wanted. Plus of course it cost us the entire positional Play club-wide education. Very expensive that bit I’d suggest.
I suppose you could argue that Delia’s relative football poverty is to blame for Webber’s twisted sporting contortions, though goodness me he could hardly have sent us into a worse tailspin if he had tried.
As Greg Downes said recently when asking about the import of Josh Sargent’s injury on Norwich’s season: ‘ yes ok….but come on…he’s not a world beater…’
Wagner’s interesting early season model with Sargent and Barnes as double false 9’s was quite interesting. It got worked out pretty quickly I thought and it certainly risked exposing our ongoing Achilles heel of lack of central defensive midfield protection (be it on-field personnel, tactics, zonal or suitable psychological profile). Doing it with Idah, Hwang or whoever looks daft.
Knapper-Attanasio will keep Wagner on a while - until something genuinely better can be found and attracted, though I suspect that it will be the roles and responsibilities, lines of communication and internal land grabs that are the major focus for American minds first….lots of control mechanisms now being put in place I’d suggest.
‘I’m not a control freak’ he repeated several times in several interviews.
On a personal note - and yes as a counterpoint - It isn’t long ago that we had a Black Manager, a gay Director and a woman owner. A real fan too. Call me sentimental, but I thought that was rather wonderful.
Now we’ve got an American financier. Just like everyone else.
I have talked before about Norwich ‘solving yesterday’s problems’. Many businesses are unintentionally run like that. Ben Knapper even gently criticized the ancien regime at Norwich for it.
I can’t help thinking that the little bit of extra money that Attanasio can lay his hands on was needed to keep Buendia for a year, keep Skippy in the building for another year and keep Farke ‘I don’t understand changing head coaches so often’ and the positional play methodology flowing through the pristine fields of Colney. That’s all yesterday now though.
Attanasio might now find himself watching steaming columns of Matrix data, throwing some good money at the worst glitches, though finding we are actually quite a long way away from where we were. And it’s a long, draining and rather expensive journey back to 22nd. And then you’re still a bloody long way - sportingly and financially - from 17th. Though of course Australia will no doubt help you out at that point….
Delia holds her head in her hands when we lose. She had delegated authority and responsibility to others so she could stay a fan. It has cost her in the end. She has had to take Mr Right Now. I suspect she is questioning it all a little…
…though the tectonic plates have moved and she is now discovering the power of debt.