Ipswich AGM tonight

[king canary 7,580]

"What you''re really asking for is some rich person to come along and simply sink a whole wedge of money into the club. That simply isn''t going to happen."

So explain Chelsea, Man City, Southampton, Aston Villa, Bournemouth, Leicester, Everton, West Brom, Watford etc etc...

[Mello Yello 2,281]

He''s been on the pop again.

Probably had a skin full of "Rhubarb Whine".......

[Parma Ham's gone mouldy 2,219]

‘The issue is that our sustainability means that we cannot not exist outside our generated revenues without increasing external debt (something we stated we wouldn’t do), attracting new investment (something Ed Balls recently stated we would do) or selling and/or cutting more than we make year-on-year* #

*This would need to be after we had made all necessary cuts and sales to have arrived at the sustainable cost-neutral position. ‘

#Additionally cutting beyond annual breakeven point is naturally only an available option whilst suitable saleable assets exist.

A successful Academy could of course function as this ongoing asset generator in due course. It is the transition period from high revenues- high wages- high Television income to that day that presents the strategic financial need issue now. The rebalancing to a sustainable neutral balance point is extreme - and almost inevitably highly destructive -for our model.

In simple terms coming up from League 1 is easier than coming down from the Premiership for a sustainable model. Living within your means as you have always done is manageable, dealing with vastly less after having had it is an entirely different process, financially, in a sporting sense and psychologically in the stands. The lingering legacy of success is corruptingly toxic to us.

From a standing start the model can ironically sustain without top level success, it will have to amend its modus operandi should success occur again.

Parma

[king canary 7,580]

@parma

The other issue is our most expensive assets are some of our least saleable. Those on the biggest wages are either too old (Naismith) or too inured (Jarvis) to be an attractive option for purchasing clubs.

Selling Maddison will bring in a good fee but I doubt it''d take much off the wage budget.

[Bill 1,788]

[quote user="TIL 1010"]His lack of self awareness is beyond ridiculous winky.[/quote]quick run, he''s got out againsilly tilly

[Van wink 2,994]

A bit of friendly advice for you Rhubarb, don’t post when you’re drunk!👍

[TIL 1010 4,722]

[quote user="Van wink"]A bit of friendly advice for you Rhubarb, don’t post when you’re drunk!👍[/quote]If he took your advice winky that would solve an awful lot of problems in this place every day of the week.

[nutty nigel 7,509]

[quote user="Parma Hams gone mouldy"]Nutella,

A large contributor is our excellent catering operation.

Rhubarb,

I believe the latest owner wealth figures show that 22 out of the other 23 Championship club owners are wealthier than NCFC and I believe 6 of the League 1 owners are too.

Parma[/quote]

Yes I always try and count my blessings rather than covet others so starting the comparison in a positive way appeals to me. On the link it says the binners turnover last season was 17.24m. Is that close to what ours would be without the parachute payments? 

[Parma Ham's gone mouldy 2,219]

Nutella,

We get more through the gates, more often. This is a benefit though it was utterly dwarfed by television money. It is a benefit over Ipswich (say 25k vs 18k pw @ £20 average return per customer = £140k x 23 = £3.12m pa advantage over Ipswich +/- equal TV money, plus our more successful off-field activities (esp catering) = (say) £3m = (broadly) £6m = (broadly) the touted (ahem) figure for Evans’ pa losses.

Also Refer to previous:

‘Re: Ipswich AGM tonight

Nutella, We have higher gates and higher off-field revenues so we can arguably offset those gains against Evans’ £6m pa losses.

Sustainable Revenues are broadly 25k x £20 average returns per customer x 23 +/- cups + £8m off-field*+ TV = (£0.5m x 23)= £11.5m + £8m+ £4m

Total £23.5m

(Off-field income may not decline if sporting level drops).

Recent Wage drops from c£55m to c£36m. Overdrafts and previous loss tbc. Other Operating costs to add.

In the summer costs will need to be cut a net c£23m. This is only an additional c£10m above what cutting wages to the benchmark level alone would require.

Sustainability means all costs fitting within the (say) c£23.5m figure. This can be player sales, wage reductions, sales or cuts of other assets. Any reduction (or increases) in average gates, average spend and off-field revenues would further reduce the sustainable pot.

Reducing squad size, selling players without replacing them, would be an obvious methodology. Increasing reliance on a limited pool of players, encouraging greater reliance on youth system to fill injury gaps. Naturally the limited pool of players will include any existing players that cannot be sold.

Please note that this does not take any account of buying new players, or paying their wages. This new net figure must also be amortised, this requiring equivalent further cuts to the same level to maintain sustainability. ‘

In the context the £6m an advantage though it should be noted that - imagining all things are equal - our wages must drop from £36m to Ipswich’s £17m for us break even (allowing for our +£6m differential to sustain).

£19m pa wage saving in the summer could be delayed or amortised if players are sold and not replaced (or replaced far more cheaply).

£19m is £380k per week. How many players would that be? What about if you can’t sell Naismith and Jarvis?

You can sell key assets to make up the £19m, though even players such as Maddison earn far less than a Naismith and that wage balacing will need to occur if asset sales cannot make up the difference up until the expiry of any expensive contracts.

Parma

[cornish sam 944]

[blockquote user="Parma Ham''s gone mouldy"]Nutella,

A large contributor is our excellent catering operation.

Rhubarb,

I believe the latest owner wealth figures show that 22 out of the other 23 Championship club owners are wealthier than NCFC and I believe 6 of the League 1 owners are too.

Parma[/blockquote]

It''s at least 6 Parma, more likely 8-10, hell there''s at least 4 owners in League 2 who have more money than our lot!

Like Nutty I prefer to look on the positives, yes our owners aren''t rich and that forces certain constraints on us, but that should just make us prouder of what we have managed to achieve (even if it does go unremarked on a wider scale when the supposed fairy tale stories of the likes of Bournemouth and Brighton get the attention). I do not think that Smith and Jones are the ideal option, but, at the moment they are the best option available to us. There is no point b1tching about it unless there is actually an alternative on the table.

PS. thanks for your analysis Parma, it''s always an informative read and has galvanised what I already thought, that getting to the Premiership is indeed a poisoned chalice. In a way I''d prefer us to be able to win this league and then opt to not get promoted...

[nutty nigel 7,509]

So when we look at the Ipswich model we see they are in a worse position than us moving forward in the long term more sustainable in the short term. Our big problem next season is we still have to pay PL failures after the parachute money is gone. Because we only got 2 years this affects the players we bought in Jan 2016. They obviously did have relegation clauses but us only getting 2 years meant they were still here when the money ran out. The alternative was to not sign them which in hindsight would leave us in a much better position next season.

However we are where we are. As I''ve said before I love that we have young people charged with driving the club forward. If father Christmas comes in the meantime it will be easier. But if father Christmas turns into scrooge further down the line our future would be compromised.

[Woodman 92]

Maybe we should have had the foresight not to give them long contracts that extended to beyond the expiry date of the parachute payments? Then again, would they have signed for us without that guarantee?

I doubt we''ll offer anything like those contracts going forward under Webber.

[nutty nigel 7,509]

That''s the point Woodman. They wouldn''t have signed unless their contracts were worth the same for a year less. What I do find ironic is that some posters on this forum were advocating we break the wage structure to do more. Imagine if we were in this position without the relegation clause...

[Parma Ham's gone mouldy 2,219]

Indeed Nutella.

In the interests of balance let me re-post a pm I wrote in January 2016, which indicates both the limits of the model (upon promotion it becomes an either/or - gamble/pocket the money - scenario) and the board identified that that was as good a time as any to gamble. And gamble they did. All that is unfolding and about to unfold is part of that gamble. Arguably the January investment, particularly defensively, was belated - though anecdotally that may have been because we were too ambitious in summer of 2016, aiming at targets that strung us along and were ultimately beyond our reach:

“ 05/01/2016, 12:10 AM

Parma Ham''s gone mouldy is not online. Last active: 14/12/2017 11:12:51 Parma Ham''s gone mouldy

Top 500 Posts

Joined on 13/11/2003

Posts 1,323

Re: Bowkett et al

Yes that is what I meant. It is now happening for good strategic reasons, as much to do with the changing landscape of football as with any overriding philosophy change at the club (though in effect an outsider might say that it amounts to the same thing).

It would wrong to suggest that there was a pre-vision of the hugely significant levels of competitive this season at Premier League level. However there was a widespread understanding and a wind of Change that blew through many club boardrooms as the realities of the upsurge in finance became apparent to middle-tier (and lower) clubs.

The air of impermeability of the top few mega clubs was a direct consequence of superior finance, resources and structure and had a direct corollary on the pitch as the difference in wages paid, fees afforded and calibre of star created tiers within tiers, even at the top level.

As the explosion of finances available to English top tier clubs outstripped even the largest of European rivals something dramatic happened strategically at club corporate level. Much like the finest wines, the very best Petrus might be £20k, but a very fine version just a fraction below that level from the same maker and grower might command a quarter of the price. The top clubs still fight for the Messi''s and the Neymars, but the very next tier (and the tier below it) are now available to the West Hams of the world and they are suddenly ahead of the Borussia Dortmunds, the Athletico Madrids and even the Inters of this world. The fear factor of playing the top teams has been eroded by tumble-down cash and the influx of European coaches of my own schooling have shown that tactics does make a difference and can be used to thoroughly good and effective effect against even the richest sides who are "obliged" to come and attack you and dominate you on heir way to their ''rightful'' three points...Parma''s guerilla tactics are undoing years of fiscal dominance (for now).

Now, this brings us full circle back to the present, Norwich and Bowkett. What is the change and why?

Alan Bowkett was brought in at a time when the finances were in dire need of restructuring and their were institutions that needed both talking to in their own language and somebidy who understood the rules of the game and how to best apply them to the club''s benefit. Alan Bowkett had good contacts, good knowledge of the job at hand and a clear brief to fulfil. That job has been more or less completed with the virtual elimination of external debt and even the reduction of the rather small (and flexible) internal debt.

The first return to the Premier League, the relatively modest spending and the reasonably shallow quality squad depth also helped to even the keel naturally, though it must be noted that the structural reforms were achieved by Bowkett et al in advance of this.

We can characterise the overriding strategy hitherto as one "of live within our means, invest whatever we can in the football, though retain a reasonable offset cushion to amortise the sharp drop in revenues suffered upon relegation".

This is very sensible on paper, though recent developments, changing models elsewhere and the reality on grass of last year provided a realpolitik wake up call that the "stable, but yo-yoing" model might not be fit for purpose.

The Watford and Bournemouth models have to some degree contributed to this revision. They are both smaller clubs with richer owners, who crucially are prepared to ignore wage ceilings, embrace marquee signings where available and -most importantly - use their wealth to amortise losses when in the Championship. This is different from the ''glory hunter'' investors or the ''undervalued asset'' investors. It is owners who don''t and perhaps can''t make a club huge overnight, but who can tip the odds in their favour by taking (not quite) free hits at scenarios that Norwich cannot afford to risk with a ''cover the worst case scenario with real cash'' model.

This is not the only factor however. Neil Adams will not get the credit he deserves from the media and the terraces, but at boardroom level there is a clear recognition of what he did and why it was important. Not least it foreshadowed the reality of what might had been and the fragility and lack of backbone in the yo-yoing model that had previously been aspired to and believed in: uponn relegation the players were a shell of what they were and turmoil abounded in terms of possible playing turnover, plans abc and d in terms of final playing squad and psychological impact on the he troops was deep and turbulent. An enthusiastic club man, who was able to recreate a sense of purpose of playing for Norwich, that it meant something and was able to regenerate a sense of attacking verve, having been beaten regularly and totally lacking the belief and confidence to dominate games and win regularly was a significant feat.

It also showed the board that the ongoing retention of too good for the championship, not perhaps good enough for the Premier, lose the minimum number of your best players coming down, add higher quality ones on your return was a good theory, but rather tumultuous in practice. It was expensive, it didn''t provide the continuity that should have lead to stability, it was very expensive and would have dramatic consequences for playing staff if it lasted more than one year.

This the safety option was rather unmasked as not being that safe. The risk of the defensive strategy were suddenly shown to be rather greater than believed and all at the same time as the gains from success were growing exponentially to levels that genuinely allowed for life-changing , club-changing possibilities within even a single survival year.

This brings us on to now. We have a fan as Chairman, but the question he asks had already largely been thought of..."what are we here for? What is our raison d''etre?"

There are reasonably sound economic arguments that the relatively low-risk defensive strategy sensibly employed by the board hitherto was now no such thing.

We have arguably the best manager the club has ever had, learning everyday and fast, we have no debt, we are in the richest league in the world and we stand to gain more money than we have almost ever dreamt of. Our squad is deeper, stronger and better paid than they have ever been, incentivised by the knowledge that failure this year would mean a significant restructuring for many of them as double-failures. [was the logic at the time]

If now is not the time to invest then it is hard to envisage more appropriate circumstances for it to occur - and this is where the fan takes over from financier - what is the point of amortising against downside risk if this mitigates so heavily against the upside being achieved in even the most favourable of circumstances? It is ultimately a football club, where linear growth is not a given despite the continual improvement in much of the controllable business.

The huge finances rewards now on offer, and the fact that many stars have aligned for the club, give us an opportunity to take a carefully calculated gamble at a point in our history where the opportunity of having the opportunity to gamble again cannot be expected even with a so-called stable model...in this way yo-yo becomes simply yo and the downside - far from being offset - is very much the status quo and a rather negative glass ceiling has become the de-facto limit onwards into the future..

The rewards on offer are truly huge both financially and strategically and are really well within our grasp. Some careful investment could see excellent returns. There is no need to be fearful of success and indeed one must calculate today''s odds, not slay yesterday''s dead demons.

Parma ”

This was written as an assessment of the logic in January 2016, justifying the £32m gamble on Naismith, Klose, Pinto.

Those of you who always judged investment, risk or ambition on headline transfer fees will now understand why wages were always a vastly more pertinent issue.

It is not what you do when you can afford it, it’s what are the consequences for a sustainable model when you can’t. In context a hugely ambitious gamble by the board. What else would you ci temporarily have had them do?

Parma

[Hoola Han Solo 448]

Why are we comparing ourselves to Ipswich? Is this the limit of our ambition?! Christ

[nutty nigel 7,509]

I think the clue is in the thread title Hoola.

[cornish sam 944]

Also hopla, due to their longevity, sorry, stagnation, in this league they provide quite a useful benchmark as to what an average championship club looks like... One we should be surpassing on the pitch though....

[FenwayFrank 2,457]

If we were to spend as much time in this division as they just have then a number of posters on here won’t ever see us in the prem again 😯

[worsethandeath 0]

If teams like AC Milan can languish in their divisions in 2/3 empty stadiums I''m not sure why people on here think it''s so simply and easy to find this billionaire owner with a desire to spend it all on Norwich

[ricardo 7,347]

[quote user="FenwayFrank"]If we were to spend as much time in this division as they just have then a number of posters on here won’t ever see us in the prem again 😯[/quote][:D][Y][;)]