Ed Balls explains

[lake district canary 4,530]

[quote user="PurpleCanary"]I and others in the Inner-Inner Circle understand that our board is contemplating ditching the purely "live within our means" model. In other words, a serious decison about finance with enormous long-term implications.

[/quote]

Am I missing something here?  Is this verifiable?

One of our great strengths as a club is the way we have been able to get finances back on an even keel.   I don''t mind a likeable ex-politician being brought in, but to suggest that the club is now contemplating ditching the "live within our means" model - with an ex-politician who was in a key position during the biggest financial meltdown crisis this country has ever seen - as chairman - is worrying, to say the least.  What was that note that was left after labour lost power....."enjoy yourselves, there''s no money left" ? (or words to that effect).   I hope this is not the start of a slippery slope.  We can''t play wth the big boys without serious financial backing and to simply ditch a successful policy in favour of a spend beyond your means is not something that will help us in the long term - probably quite the opposite and could set us back on to the path that other clubs and now Bolton have been on. 

There is no middle way imo, you either live within your means and keep finances stable, or you spend beyond your means to get try and get short term success and then crash and burn. Once the stable door is open, the horse will bolt. 

[Gunthorpe 0]

PurpleCanary wrote the following post at 31/12/2015 8:29 AM:

Vanwink wrote:

What''s your source for the " ditching of the purely live within our means model" Purple?

Vanwink, people occasionally tell me stuff precisely because they know I won''t reveal my sources. In this case I don''t think this is that much of a secret - others certainly know - but I am not going to be the first to say where it comes from. I can say I am sure this idea of a policy switch, and it is only an idea and not a certainty, is.absolutely well-founded. This is not a piece of gossip that has passed through several hands and got mangled beyond recognition in the process.

Purple I know exactly what you mean - my Postman also tells me this stuff (we must have the same one) and says things like - keep it quite & I never told you

Bad news - most of what he tells me is a load of rubbish

[T 190]

I very much doubt that prudence with ambition is being ditched. A company has a legal obligation to ensure it can meet its financial obligations and the directors have a obligation to ensure that the company complies. The criticism of prudence with ambition and suggestion that we should "invest" money we can''t afford often posted shows an ignorance of business, finance and the law. Admittedly, there has been a number of clubs which have shown this ignorance and lack of judgement, It would be very unlikely that the board has changed its policy and decided to spend money it can not afford. They have already budgeted for short term financing this season from future receipts so there is little more they can do. The suggestions they would do otherwise sounds like a certain posters usual complete lack of understanding of business, finance and numbers.

[Van wink 2,994]

PurpleCanary wrote the following post at 31/12/2015 8:29 AM:

Vanwink wrote:

What''s your source for the " ditching of the purely live within our means model" Purple?

"Vanwink, people occasionally tell me stuff precisely because they know I won''t reveal my sources." "This is not a piece of gossip that has passed through several hands and got mangled beyond recognition in the process."

There has been a lot of pub talk around this change in approach, mainly speculation in my experience, based on assumptions surrounding Bowketts departure and the new chairman. I was not aware there was a club source leaking this sort of stuff. It seems to me very foolish to put this into the public domain on the eve of a transfer window.

Your source does our club no favours!

[daly 499]

It''s not pub talk re Bowkett resigning days after the AGM it''s fact. It was either Bowkett going or the boss McNally going.

Delia''s response a failed MP friend

[PurpleCanary 5,553]

[quote user="Vanwink"]PurpleCanary wrote the following post at 31/12/2015 8:29 AM:

Vanwink wrote:

What''s your source for the " ditching of the purely live within our means model" Purple?

"Vanwink, people occasionally tell me stuff precisely because they know I won''t reveal my sources." "This is not a piece of gossip that has passed through several hands and got mangled beyond recognition in the process."

There has been a lot of pub talk around this change in approach, mainly speculation in my experience, based on assumptions surrounding Bowketts departure and the new chairman. I was not aware there was a club source leaking this sort of stuff. It seems to me very foolish to put this into the public domain on the eve of a transfer window.

Your source does our club no favours![/quote]You are making various assumptions there, particularly about a club source, but your point about the transfer window isn''t really relevant. We are not here in the kind of situation where Cullum went public with "£20m for transfers" during that summer transfer window and agents promptly demanded more money, derailing at least one deal. This is a much vaguer longer-term idea that has been mooted (which I have passed on without the slightest comment as to its sense or otherwise) and I really don''t think it will have the slightest effect on getting in players now.

[T 190]

DM was reported as saying the club would not b reckless. It is nonsense to suggest that they would suddenly do otherwise and most likely rumours based on the usual complete lack of knowledge and understanding.

[T 190]

When you actually don''t know be vague and long term.

[can u sit down please 0]

[quote user="daly"]It''s not pub talk re Bowkett resigning days after the AGM it''s fact. It was either Bowkett going or the boss McNally going.

Delia''s response a failed MP friend[/quote]

Daly. I can see us getting on haha.

We aren''t changing our approach, it''s not true.

[Indy 3,283]

As I recall, Prudence with Ambition wasn''t a Norwich way till Bowkett came onboard, we had debts of nearing 27 million, with a relegated team made up of several loan players.

So to ditch this idea is just going backwards, mind you Purple and Nutty might find this not to be true, so I''ll wait for fact based response.

[Van wink 2,994]

I don''t want to get into a debate about semantics Purple, my interpretation from what you said was that your information had come from a source at the club, if it''s from somewhere else outside the club it''s just the sort of speculation and pub talk I referred to earlier.

If we are seriously considering a more liberal financial strategy I would have thought the purpose of that would be to invest more in the squad balanced against the better commercial income from sustaining Premier League status. That may well flavour our approach to bidding for players in this window and could have an impact on our negotiations, but I only speculate.

[morty 0]

[quote user="T"]DM was reported as saying the club would not b reckless. It is nonsense to suggest that they would suddenly do otherwise and most likely rumours based on the usual complete lack of knowledge and understanding.[/quote]You do know that there is a sustainable middle ground way before you get to "reckless though, don''t you?Its not just an off switch between "Scrooge McDuck" and "Financial ruin"

[morty 0]

There is nothing wrong with debt as long as it is sustainable, I am sure if a lot of you looked at your personal finances, you would know what I am talking about.I would suggest that is we can retain Premiership status, a debt of up to 20 or 30 million, carefully managed, would be perfectly fine.

[lake district canary 4,530]

[quote user="morty"]There is nothing wrong with debt as long as it is sustainable, I am sure if a lot of you looked at your personal finances, you would know what I am talking about.I would suggest that is we can retain Premiership status, a debt of up to 20 or 30 million, carefully managed, would be perfectly fine.[/quote]

Presume you mean "if" but in this context it''s a big "if".  We could go into 20-30m in debt and not retain premiers status - and that is where the slippery slope starts.  In debt and a reduction in income is where the trouble starts and we really don''t want to go there.

[can u sit down please 0]

What morty said 👍🏽

[morty 0]

[quote user="lake district canary"][quote user="morty"]There is nothing wrong with debt as long as it is sustainable, I am sure if a lot of you looked at your personal finances, you would know what I am talking about.I would suggest that is we can retain Premiership status, a debt of up to 20 or 30 million, carefully managed, would be perfectly fine.[/quote]

Presume you mean "if" but in this context it''s a big "if".  We could go into 20-30m in debt and not retain premiers status - and that is where the slippery slope starts.  In debt and a reduction in income is where the trouble starts and we really don''t want to go there.

[/quote]Obviously thats what I meant bar the typo.

[Van wink 2,994]

[quote user="morty"]There is nothing wrong with debt as long as it is sustainable, I am sure if a lot of you looked at your personal finances, you would know what I am talking about.I would suggest that is we can retain Premiership status, a debt of up to 20 or 30 million, carefully managed, would be perfectly fine.[/quote]

Yep

[lake district canary 4,530]

It''s simple economics.  So you get a £20,000 overdraft and sustain it by keeping a good job going.  All well and good. You are then made redundant and have to take a lesser job where you can''t sustain the debt..........and what happens?  That debt gets worse because you can''t sustain it. 

[PurpleCanary 5,553]

[quote user="Vanwink"]I don''t want to get into a debate about semantics Purple, my interpretation from what you said was that your information had come from a source at the club, if it''s from somewhere else outside the club it''s just the sort of speculation and pub talk I referred to earlier.

If we are seriously considering a more liberal financial strategy I would have thought the purpose of that would be to invest more in the squad balanced against the better commercial income from sustaining Premier League status. That may well flavour our approach to bidding for players in this window and could have an impact on our negotiations, but I only speculate.[/quote]Vanwink, I have sent you a PM.

[Hoola Han Solo 448]

A lot of people adding to this thread that seem to lack simple financial knowledge or how debt works.Debt is entirely acceptable if the repayment of it is manageable. Obviously if the Club retains Premier League status, the extra millions as opposed to the Championship would ensure that the Club can meet its financial obligations and thus the debt is manageable.Most business and individuals have some sort of debt. For example, I have a car loan, credit card and occasionally use my overdraft, however as long as I retain my level pf earnings the settlement of these is no problem to me. Norwich City will obviously have sound financial minds ensuring our debt is manageable, regardless of the division we''re in.For all the fans moaning about lack of transfers in the summer, unless you have actual knowledge of how the Club is run, then you can never understand whether it''s prudence or a ''lack of ambition''. As an example, we''re still paying for RvW and Hooper, and this will obviously impact on the wage budget (as well as the settlement of their original fees).

[morty 0]

[quote user="lake district canary"]It''s simple economics.  So you get a £20,000 overdraft and sustain it by keeping a good job going.  All well and good. You are then made redundant and have to take a lesser job where you can''t sustain the debt..........and what happens?  That debt gets worse because you can''t sustain it. 

[/quote]Depends what collateral / equity you have though, doesn''t it?I think we showed that when we went down to the Championship we shifted a couple of players, and managed pretty well, and don''t forget we would have parachute payments again, a massive advantage. And, in the grand scheme of things, a debt of 20 or 30 million isn''t even a large amount for a Championship club.

[morty 0]

And really if you look at my first post on the subject, I used the word "sustainable"

[Grant Holts Moustache 104]

LDC -Am I missing something here?  Is this verafiable? One of our great strengths as a club is the way we have been able to get finances back on an even keel.   I don''t mind a likeable ex-politician being brought in, but to suggest that the club is now contemplating ditching the "live within our means" model - with an ex-politician who was in a key position during the biggest financial meltdown crisis this country has ever seen - as chairman - is worrying, to say the least. 

Let''s clear this myth up. Ed Balls worked in the Exchequer until 2004. A full 5 years before the financial crisis struck the Worldwide economy beginning with the sub prime mortgage crisis bankrupting a number of financial institutions in America. In 2009 he was Education Secretary not the person responsible for American Institutions taking lots of bad debts wrapping them up in big packages of shit and selling them to the world. At least if people are going to slate a guy before he starts do it with something that''s actually his fault.

[T 190]

I''d agree there is a level of risk that can vary eg player relegation clauses but there is not a middle ground in the sense that the audited account always show that the club is run and budgted as a non profit organisation with a relatively small profit or loss and is run and budgeted to b cash neutral. That has never changed and never will under the current regime.

Yes you could take debt on potentially against future guaranteed payments thus increasing current short term funds and reducing long term funds but that assumes firstly that is a good long term strategy and secondly someone is willing to finance you post the banking crash. Given the eagerness of the lenders to get their money back I doubt there is appetite to provide long term debt.

Bolton is just the latest example of a club without a sustainable strategy - at some point a club of the size of NCFC will get relegated and if the finances an player contracts don''t allow for that contingency then you will be in trouble at some point.

[nutty nigel 7,506]

[quote user="Indy"]As I recall, Prudence with Ambition wasn''t a Norwich way till Bowkett came onboard, we had debts of nearing 27 million, with a relegated team made up of several loan players.

So to ditch this idea is just going backwards, mind you Purple and Nutty might find this not to be true, so I''ll wait for fact based response.[/quote]

 

Seriously Indy?

 

What are you dragging me into now. I have no contacts, am a simple bog cleaner well aware of my limitations. In my favour I have a good memory so can call you out when you make stuff up about the past. That''s why you have so many hissy fits after I post. However even I know there are no facts about things that may happen in the future and I''ll leave the best guesses to those more qualified to make them.

[A Load of Squit 5,108]

[quote user="Indy"]As I recall, Prudence with Ambition wasn''t a Norwich way till Bowkett came onboard, we had debts of nearing 27 million, with a relegated team made up of several loan players.

So to ditch this idea is just going backwards, mind you Purple and Nutty might find this not to be true, so I''ll wait for fact based response.[/quote]

It was spoken about long before ''Bowkett came onboard''.http://services.pinkun.com/forums/pinkun-forums/cs/forums/741829/ShowPost.aspxThe above post is from 2006.

[Katie Borkins 1]

"PRUDENCE WITH AMBITION" was Doncaster and Munby all over. Long before Bowkett.

[Katie Borkins 1]

Lest we forget, Munby described our loan player strategy as "smarter than the rest". I clung to that phrase while watching OJ Koroma falling over and Sibierski blazing the ball into row ZZ.

[ricardo 7,328]

[quote user="Dead Canary"] 

Let''s clear this myth up. Ed Balls worked in the Exchequer until 2004. A full 5 years before the financial crisis struck the Worldwide economy beginning with the sub prime mortgage crisis bankrupting a number of financial institutions in America. In 2009 he was Education Secretary not the person responsible for American Institutions taking lots of bad debts wrapping them up in big packages of shit and selling them to the world. At least if people are going to slate a guy before he starts do it with something that''s actually his fault.[/quote]

So in essence, his excuse is something along the lines of "a big boy done it then ran away".

[Grant Holts Moustache 104]

No Ricardo I just don''t think the guy should be criticised for something he wasn''t responsible for.