Finances

[Bannana Boy 30]

This has been at the back of my mind since the three year season ticket deal was announced - are the club''s finances not in the best of shape?

I genuinely have no idea, and I''m not a conspiracy theorist or anything, but looking on the official website there is a story which says that the three year deal has sold out and next seasons season tickets can be purchased from January 2016.

Don''t season ticket renewals/sales start a bit later in the season?

Like I say, not a conspiracy theorist but it just strikes me as a bit odd that in both this seasons transfer windows the club are running ''schemes'' to increase liquidity.

[Van wink 2,994]

The good ship City must be sailing on a sea of cash now.

[norfolkbroadslim 223]

Possibly nothing more than Delia & MWJ wanting to be paid back in full, before they put the club on the market for a massive amount and rake in a huge profit, perhaps?

[westcoastcanary 173]

The board have to plan for a range of medium-term scenarios, the least optimal of which is relegation at the end of this season. The experience of last year will have driven home the full implications of the situation the club will find itself in if that worst case scenario recurs. Maximising the funds available should that happen, puts the club in the best possible position to manage the situation and minimise the downside. This is what any sensible board of directors of a club in our position should be doing. I find the suspicion and cynicism on here both incredible and discreditable.

[morty 0]

Its probably worth remembering just how much of our Premiership we kept when we went down, that won''t have been cheap.We will always be operating on a fairly tight budget, and I don''t understand why people would think otherwise.

[morty 0]

*Premiership squad.

[SwindonCanary 455]

Well, they bid £8million on Steven Naismith and £6million on Gayle as the transfer window was closing, so I''m guessing we are sitting on £14million plus - I wouldn''t say there''s too much trouble with funds.

[Ivor Know 0]

Cash in hand is king peeps.

The club may have had a £6m surplus at the end of the previous season, but that 40% wage reduction was nothing more than a wage deferral, as promotion bonuses kicked in and the end of last season.

Consequence = a huge loss.

Peeps have their heads "up where the sun doesn''t shine" if they think we''re sitting on oudles of cash.

Engage brain and think peeps!

That is all.

[norfolkbroadslim 223]

Westcoastcanary, IF that is the situation, then we are never going to progress. We will be the eternal West Brom of old. Little old Norwich forever x

[Hvittsson 0]

[quote user="SwindonCanary"]Well, they bid £8million on Steven Naismith and £6million on Gayle as the transfer window was closing, so I''m guessing we are sitting on £14million plus - I wouldn''t say there''s too much trouble with funds. [/quote]

Not may not be the case because if one of those bids had been accepted, Grabben would have got to Bornemouth for £7 Million

[Feedthewolf 4,844]

[quote user="norfolkbroadslim"]Possibly nothing more than Delia & MWJ wanting to be paid back in full, before they put the club on the market for a massive amount and rake in a huge profit, perhaps?[/quote]If they wanted back everything they''ve loaned the club down the years, their best bet would surely be to sell the club to a rich investor who would square those loans off as part of the deal to buy the club? If D&M want to sell their shareholding but can''t find a sugar daddy to buy, I doubt they would siphon all that money out of the club''s operating costs, they''d probably just write off the loans rather than leave the club in a precarious position.

[ZLF 271]

The £120m is over three years so simply not available to spend right now.    Even this years "prize" which I understand is c£60m is only paid at the end of the season (some during but mainly at the end).   Yes - we can borrow against it and structure transfers so payments are made over many month but put simply the amount of actual spare cash is simply not as large as people think.

 

As Morty has mentioned last season was an expensive on for us,   we spent on transfer fees and the even after relegation clause reduction in wages we still were amongst the best bpaid players in the league.    That cash has to come from somewhere.

 

The 3 year deals are an odd one and suggest we may have a (short term?) cash flow problem - but that should become clear when the annual accounts are released.

 

  

[The Masked Raccoon 0]

They''ve just released a commemorative shirt for £80 to help any conspiracy theories

[Ivor Know 0]

Delia and Michael aren''t going anywhere, to suggest otherwise is nothing more than mischievous noise.

They''re probably owed about £2m at most.

Lordy, there are some clueless conspiracy theories doing the rounds at the moment.

[Stylish Canary 0]

Rather than the Board are incompetent theory I am of the view that finance has been behind the lack of spending.

[westcoastcanary 173]

[quote user="norfolkbroadslim"]Westcoastcanary, IF that is the situation, then we are never going to progress. We will be the eternal West Brom of old. Little old Norwich forever x[/quote]

The basis on which the club operates has been clearly stated several times. In simple terms, everything has to be funded from the income the club generates; nobody is putting private money in, and nobody is siphoning money out. If we want to keep increasing the amount available to spend on the team, we must either reduce spending elsewhere and/or keep growing the club income. This can be done, but it takes time, clever management and everyone pulling in the same direction. It doesn''t help to have impatient fans who appear to think there''s far more money to spend than there is.

If you want to shortcut the process of slow, step-by-step improvement, you need to come up with an acceptable way of funding expenditure far in excess of club income. There are plenty of examples of club''s ruined by pursuing such strategies.

[Ivor Know 0]

It''s a tricky concept for some to understand westcoastcanary that expenditure should equal income, but well done for persevering

[lappinitup 629]

[quote user="Vanwink"]The good ship City must be sailing on a sea of cash now.[/quote]Yep! If you start with the well known fact that the play-off final is worth £120m and we only spent £15m this summer we must be loaded. Everybody knows our players wages are the lowest in the prem which is why players don''t want to come here. We sold our best player who didn''t want to leave and we didn''t need the money for so more dosh in the bank.You''re right Winky, we''re sailing on a sea of cash.[:''(] [:''(] [:''(]

[DEB (never forgotten) 0]

[quote user="westcoastcanary"][quote user="norfolkbroadslim"]Westcoastcanary, IF that is the situation, then we are never going to progress. We will be the eternal West Brom of old. Little old Norwich forever x[/quote]

The basis on which the club operates has been clearly stated several times. In simple terms, everything has to be funded from the income the club generates; nobody is putting private money in, and nobody is siphoning money out. If we want to keep increasing the amount available to spend on the team, we must either reduce spending elsewhere and/or keep growing the club income. This can be done, but it takes time, clever management and everyone pulling in the same direction. It doesn''t help to have impatient fans who appear to think there''s far more money to spend than there is.

If you want to shortcut the process of slow, step-by-step improvement, you need to come up with an acceptable way of funding expenditure far in excess of club income. There are plenty of examples of club''s ruined by pursuing such strategies.[/quote]

Perfectly logical, reasoned common sense - but the point is that back in 2011/12 we entered the premier league with approx £27m of net debt. We were successful in eradicating this over our 3 seasons of premier league membership prior to relegation. At the same time, we regulary invested more heavily in the transfer market than in the one just ended.

The transfer window ending 31/8/11 (when entering the premier league under Lambert) saw us invest a total of £14.05m (net):

IN:

Pilkington £2.0M

Vaughan £2.5m

Morison £2.5m

Bennett (E) £1.5m

Bennett (R) £3.2m

Howson £2.0M

Ayala £0.8m

OUT:

McDonald £0.45m

 

The window just ended saw us invest (circa) £3.5m net.

A significant reduction in respective net investment in the squad, at a time when we have no commitment to debt repayment.

Clearly, we appear less ambitious or less willing to back our manager this time round.

[Van wink 2,994]

All in used fivers Lapps, you could swim in it mate.

[Grant Holts Moustache 105]

Something you aren''t taking into consideration DEB is whether we made a loss last season as the accounts are yet to be produced. It is well known that the club arranged a £6m overdraft facility just in case, would have also had to pay out significant bonuses upon promotion, maybe a pay off for Adams and a payment for hiring Alex Neil. We could have made a loss last season and be paying that back, something we won''t know until the accounts are released.

Also can I add our wages now will probably be higher than in the seasons Lambert was here due to us maintaining a large proportion of the squad that we went down with. These players will now be back on the wages they were last time we were in the premier league plus we have a number of additional signings who were already established premier league players and will have wages to match. Transfer spend isn''t everything when it comes to the budget and the wage factor shouldn''t be discounted when we look at the clubs spending.

[Grant Holts Moustache 105]

Forgot to add that you also included players signed in January. A window we are yet to have and could see a vast increase in our net spend.

[Highland Canary 76]

If finance is the issue this is further evidence that an owner with financial power to invest in the club is a prerequisite for short to medium term survival in the PL, especially in the context of the diminution of FFP regulations.

[DEB (never forgotten) 0]

[quote user="Dead Canary"]Something you aren''t taking into consideration DEB is whether we made a loss last season as the accounts are yet to be produced. It is well known that the club arranged a £6m overdraft facility just in case, would have also had to pay out significant bonuses upon promotion, maybe a pay off for Adams and a payment for hiring Alex Neil. We could have made a loss last season and be paying that back, something we won''t know until the accounts are released.

Also can I add our wages now will probably be higher than in the seasons Lambert was here due to us maintaining a large proportion of the squad that we went down with. These players will now be back on the wages they were last time we were in the premier league plus we have a number of additional signings who were already established premier league players and will have wages to match. Transfer spend isn''t everything when it comes to the budget and the wage factor shouldn''t be discounted when we look at the clubs spending.[/quote]

Indeed, I suspect that we may have incurred a loss last season, despite the £15m parachute money and play-off related income streams. We were informed that squad salaries were reduced significantly, in accordance with contract clauses, but it remains likely that costs may have exceeded income. However, that is no explanation for the significant differential in net squad investment in comparison to this time 4 years ago, when the club were handicapped by £27m of net debt, with an associated commitment for repayment.

[Van wink 2,994]

Highland Canary wrote the following post at 04/09/2015 5:42 PM:

If finance is the issue this is further evidence that an owner with financial power to invest in the club is a prerequisite for short to medium term survival in the PL, especially in the context of the diminution of FFP regulations.

Yep, the sustainability model is fine, I like it, but it relies on cute dealings in the transfer market. Buying and selling players can be a massive source of income. Look at the deals Swansea have done.

Sadly we don''t seem to have the ability to replicate this and IMO the slow burner gradual improvement of squad model ain''t going to work in the PL as it now is.

So we have to accept that we will end up as a Chump side at best, find a way of being a lot more astute in the transfer market or get more money in at board level.

Let''s hope the sea of cash that we currently float on can be invested wisely. I fear it may be a bit late though.

[Lessingham Canary 99]

A lot has been said about wages in the championship being still at PL level which they were, and we did have one of the highest wage bills (if not the highest) in the chumps.

The big one is that with promotion comes dramatically increased operating costs, you may recall last year there was a cull on staff at CR after relegation, this is where the Bournemouth''s and to a lesser degree Watford will learn very quickly.

[Van wink 2,994]

Lessingham Canary wrote the following post at 04/09/2015 5:56 PM:

A lot has been said about wages in the championship being still at PL level which they were, and we did have one of the highest wage bills (if not the highest) in the chumps.

The big one is that with promotion comes dramatically increased operating costs, you may recall last year there was a cull on staff at CR after relegation, this is where the Bournemouth''s and to a lesser degree Watford will learn very quickly.

Yes there was a culll of staff when we went down, the operational model we had had to be trimmed, but have we dramatically reinstated the workforce back to the previous level now we are back up? Somehow I doubt it but I don''t personally know.

I''m sure that the longer you stay in the prem the bigger your establishment grows, but it''s not necessarily essential.

[Grant Holts Moustache 105]

The point is DEB that you can''t compare net spend on players until the end of January. Your quoted number includes players signed in that window and you need a full season because finances, both TV money in and transfers out, are accounted for over a year not just the August window. Also until last seasons accounts are released we don''t know how much we have had to potentially pay back this season and thus the effect on our playing budget. Until these two factors are sorted your question has no answers and come the end of the January window may no longer be pertinent.

[lake district canary 4,531]

[quote user="DEBnever forgotten"]the point is that back in 2011/12 we entered the premier league with approx £27m of net debt. We were successful in eradicating this over our 3 seasons of premier league membership prior to relegation. At the same time, we regulary invested more heavily in the transfer market than in the one just ended.

The transfer window ending 31/8/11 (when entering the premier league under Lambert) saw us invest a total of £14.05m (net):

IN:

Pilkington £2.0M

Vaughan £2.5m

Morison £2.5m

Bennett (E) £1.5m

Bennett (R) £3.2m

Howson £2.0M

Ayala £0.8m

OUT:

McDonald £0.45m

 The window just ended saw us invest (circa) £3.5m net. A significant reduction in respective net investment in the squad, at a time when we have no commitment to debt repayment. Clearly, we appear less ambitious or less willing to back our manager this time round.

[/quote]

We didn''t need to buy so many players to build the squad this time, as we did in 2011/2012 - because we already have a squad of players worth way more than the value of the above players you mention.  In other words, the squad is already way stronger than it was in 2012.   The players we have brought in this window would most of them be worth more than £4m.  Mulumbu, Dorrans, Brady, Mbokani (possibly worth a lot more if we wanted to buy him). Tettey, Howson, £4m+ imo.  Bassong, Olsson, Martin (yes, Martin) £4m +.   Wisdom, if bought would have cost £4 +.   Jerome, Grabban, £4 m +.  Etc etc. 

So this time there was no need to go mad and just spend spend spend. That we tried and got six good quality and useful players is positive and good for the club - that we may have missed out on one or two more is not for lack of trying.  People seem to expect the earth and yet we see much wailing and gnashing of teeth when Jonno is sold - a player who can''t get into the starting line up - and he goes for £6m.  That says more for the quality of our squad than anything.  Loads of midfield quality, cover across the back - versatile defenders who can play different positions  (Whitts right or left, Wisdom RB or CB, Martin CB or RB, R. Bennett CB, Toffolo LB or CB), four proven goal scorers (Grabban was being touted at worth £5m+ too).

There may well be some money left over from the transfer window - but it will be needed for when the next window opens.  It''s all positive - a strong squad - a good manager - and money in the bank to buy players when and if they are available and can be bought without the club paying above the odds.  We are not a super rich club that can go and outbid richer clubs - and it would be foolish to do so.

[Van wink 2,994]

LDC

"and money in the bank to buy players when and if they are available and can be bought without the club paying above the odds."

And when do you think that will be?