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Jack Flash

Foreign Ownership/Investment

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The numerous calls from some on here for our owners to sell up or accept substantial investment and the topical issue currently regarding the billions put into offshore funds, made me think again about our club''s ownership. This piece says it all for me: -

Pertinent comments from Prem Sikka, professor of accounting at the University of Essex, said that besides the capital gains tax saving, there can also be tax advantages if the offshore owner makes loans, on which the club pays interest from the UK.

“These clubs were at the heart of their local communities and still have that tribal following, so should be rooted there,” Sikka said. “If the local ownership is removed, they cease to be clubs; they’re just businesses.”

Richard Murphy, director of Tax Research UK, said even where clubs are owned by overseas investors who have put money into their clubs, much of the additional value comes from local fans and TV subscribers paying high prices but the owners’ wealth and capital accumulates offshore.

“Football clubs are being used as speculative business opportunities,” Murphy said.

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Football cubs are businesses. They simply are, there is no way of looking at it.

Any investor/new owner is going to look to make money - look at Ashley at Newcastle doubling his money, Gold/Sullivan/Brady at West Ham if they sell will make a huge profit.

The self funded, fan owned model is nice, but can anybody tell me the last time that sort of model became an established PL team? Burnley maybe?

For reference, I find this interesting...

https://en.wikipedia.org/wiki/List_of_owners_of_English_football_clubs

Yes its Wikipedia, but it gives an idea of the potential wealth of different clubs, although obviously the owners wealth isn''t necessarily the wealth of the club.

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I think the fact we''ve gone so far down the ''football clubs are businesses first and foremost'' road is bad for the game. That genie is put of the bottle now though and has become the reality.

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The wealth of a football club is in it''s fans, it''s players, it''s owner''s values and the overall community that is the sum of all it''s parts.

The "club" aspect needs to be restored to it''s rightful place at the top of the agenda. Rich people coming in should adapt to the club, but so often it is the other way round.

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[quote user="Jack Flash"]The numerous calls from some on here for our owners to sell up or accept substantial investment and the topical issue currently regarding the billions put into offshore funds, made me think again about our club''s ownership. This piece says it all for me: -

Pertinent comments from Prem Sikka, professor of accounting at the University of Essex, said that besides the capital gains tax saving, there can also be tax advantages if the offshore owner makes loans, on which the club pays interest from the UK.

“These clubs were at the heart of their local communities and still have that tribal following, so should be rooted there,” Sikka said. “If the local ownership is removed, they cease to be clubs; they’re just businesses.”

Richard Murphy, director of Tax Research UK, said even where clubs are owned by overseas investors who have put money into their clubs, much of the additional value comes from local fans and TV subscribers paying high prices but the owners’ wealth and capital accumulates offshore.

“Football clubs are being used as speculative business opportunities,” Murphy said.[/quote]Goodness me, don''t let the farm hands read thatEvans is an investor who has ploughed millions ... into his back pocket, along with their training groundBut on a more serious note his words are correct. Much of this so called ''investment'' is merely a means of money laundering through player contracts and fees as well as tax avoidance.Sadly the gormless still imagine that some foreign chappie who has amazred billions is goingbto turn into some benevelant and kindly old uncle only too willing to fulfill the dreams of a club he has barely heard of before

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''The wealth of a football club is in it''s fans, it''s players, it''s owner''s values and the overall community that is the sum of all it''s parts.''

Its not though is it, its in the owners pockets as thats where the bulk of finance comes from, which funds transfers, which buys better players, which equates to better performances on the pitch, which results in more money coming in from TV. (yes, i know it doesn''t always work out like that)

Everything comes second to money, it has been like that since the PL started, got worse when Abramovich triggered the takeover age, and TV rights are now compounding that fact.

You can stick to the community club model, but the world of football will just drift away from you

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[quote user="lake district canary"]The wealth of a football club is in it''s fans, it''s players, it''s owner''s values and the overall community that is the sum of all it''s parts.

The "club" aspect needs to be restored to it''s rightful place at the top of the agenda. Rich people coming in should adapt to the club, but so often it is the other way round.[/quote]
I enjoy following this debate, which has been ongoing for as long as I''ve been posting on here. I can almost see it as a clash of world views. I very much agree with the first sentence in Lakey''s post. It sums up my life where the wealth I have cannot be bought. No amount of money could ever buy what I have. However if the wealth in my life was money I would never have enough. I would always want more. I guess if you continually strive for both of these wealths at some point you have to sacrifice one to get more of the other.

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Now, without meaning to offend anybody, I would be interested to see the split in fans pro & anti investment - those that think we need investment to move forward as the a club v those that think the local, fan owned model is the right way to go forward.

I would guess that a larger percentage of the PL-era fans (millenials, if you will) would be pro investment as thats what they have been brought up on, whereas those that remember NCFC before the PL era much prefer the community/local club route?

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In order to compete you need decent players/coaching staff which you can only buy with funds. Sounds like the obvious right? Well we''ve been competing in the middle of the Championship the last few seasons because that''s the level our assets reach and funds can buy. Norwich had the poorest owners in the Premier League last time round. We''re fast becoming one of the poorer clubs in the Championship. I have no idea what contingency plans are in place or have been formed taking into account the next 5 years or whatever but we''re struggling to be competitive even in this league.

Personally, I want the club to be competitive and clearly in order to do so we need owners with more money. I''m not asking for Champions League football, but we''re now in an age of inflated prices and we''re sticking to this sustainable model which is out of touch with the modern game. What fan doesn''t want their team to be competitive? Otherwise, what''s the point of following a football club?

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@Rouge

I reckon your probably right- a combo of changed expectations and not having followed football before the money all poured in.

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RB - Money has always been an issue with clubs, way before the Premier League was dreamt up. Being self sustaining is an ideal most clubs can only dream of. Most are now stuck into a world where the word the meaning of the word "club" has been transformed into "rich man''s toy".

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I also think that getting a new owner just fir the money is like getting a new manager. He/she could could be good for the club or bad for the club. The problem is that with managers, you can sack them - but an owner you are pretty much stuck with, good or bad.

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"You can stick to the community club model, but the world of football will just drift away from you"
If you insist on equating the "world of football" with the small part of it comprised by the top twenty-five or so clubs in the world''s major leagues then it''s hardly surprising you should think this way. The reality is that the community club model is fundamental to the actual world of football and it''s your fragment of it that is the anomaly. Of course the option remains of preferring to be among the anomalous, but the world of football will not be much affected either way. 

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lake district canary wrote the following post at 2017-11-08 4:33 PM:

The wealth of a football club is in it''s fans, it''s players, it''s owner''s values and the overall community that is the sum of all it''s parts.

The "club" aspect needs to be restored to it''s rightful place at the top of the agenda. Rich people coming in should adapt to the club, but so often it is the other way round.

It may have been many moons ago Lakey, but now the wealth of a football club out of the recognised top six is governed by Sky Sports and the Murdoch empire.

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It is pure romance to hope or think that  football will return to yesteryear before Murdoch pitched and brought world stars to our living room virtually seven days a week. We are where we are with football in general and unfortunately there is no going back. For over a decade it has been said that it is unsustainable and that a big club will go belly up and die but it has not happened and shows no sign of anyone doing just that. With regard to our club principles and taking the moral high ground with regard to balancing the books and maintaining our community spirit will not progress us onwards and upwards and while we scratch our heads and wonder why unfashionable clubs in parts of the UK i would never ever consider or wish to live in attract outside investment we will do best to tread water.What lessons have been learned from four out of the last six seasons in The Premiership ? I say none and we are not any bigger or better for those years except our debt has diminished to virtually zero but a few years in this division and we will be where we were before those Premiership years without an injection of some form of outside investment.

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If we want to go down the self sustaining, community club ethos long term then I believe one of two things need to happen.

1) Put the club into fan ownership. This way, while we may not be as competitive as some would like, the fans would at least have a significant say in the running of the club moving forward. Swansea and Portsmouth both followed this model in recent years (although both have now moved to outside investment) and AFC Wimbledon have grown from this also.

2) A large reduction in ticket prices- you can''t continue to charge fans a ''premium'' price (I believe our tickets are some of the most expensive at this level) while also asking them to accept a drop in competitiveness.

Essentially what we''d have if we don''t would be the owners asking the fans to pay high ticket prices to fund their nephews inheritance while having no real say in the direction the club takes moving forward. I don''t see that as recipe for keeping fans happy.

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Do you really think our owners are bothered whether fans are happy or not? It would take a massive drop in attendances on a consistent basis for them to become concerned. Is that likely? I doubt it as a day out in the big city is more important to many of our fans I suspect than the entertainment value of the games they attend.

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And what has that  an injection of some form of outside investment done for clubs like Wigan, Cardiff, Hull, Blackpool, Portsmouth, Blackburn, Bolton, Boro, Reading, Fulham, QPR are they in a better place than us for having this outside investment - bar a few seasons in the sun ?Derby, Forest and Leeds have had the money but no seasons in the sun (c/o Terry Jacks).And yes the present set up is unsustainable, as it is based on continuous growth in TV income. Ironically not by sky but pushed by BT. A club will not go belly up as it stands because the money is coming in. When it does pop it will either be as the subscriptions drop away causing the money tap to be turned off. Or future bids will be lowered because of that same drop in subscriptions.Unfortunately I suspect many are not aware that TV money is paid on the ''drip'' ie as it comes in it goes out (clubs). Sky, BT etc are tied up to 3 year contract,s as are players. Subscriptions are not. They are on a monthly basis. A ''recession'' and the knowledge that all the games can be had for free may well cause a fair few to wonder if they can better spend that ''£60'' elsewhereThis explains it furtherhttps://www.theguardian.com/football/2016/oct/26/football-fans-stream-sky-bt-sport-live-viewers

''Premier League football suffered the biggest drop in viewing on Sky TV for at least seven years, raising questions over the popularity of live sports as well as the sustainability of a lucrative source of funding for English clubs.

Average viewing on Sky’s live TV channels fell 14 per cent over the past season even after it paid two-thirds more to show the matches under the latest three-year deal with the Premier League at about £10m per game.''
https://www.ft.com/content/45e8a3e8-4d1e-11e7-a3f4-c742b9791d43So only a fool would believe that things will carry on as they are forever

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Strange list of clubs there Rhubarb.

Some of those have ownership models not much different to our own- well off local owns the club (Bolton, Boro, Blackpool, Wigan).

Then I can also see two recent FA Cup winners, a recent league cup winner, a couple of teams who''ve been in European finals not too long ago and a few league and FA Cup finalists.

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[quote user="Rogue Baboon"]Now, without meaning to offend anybody, I would be interested to see the split in fans pro & anti investment - those that think we need investment to move forward as the a club v those that think the local, fan owned model is the right way to go forward.

I would guess that a larger percentage of the PL-era fans (millenials, if you will) would be pro investment as thats what they have been brought up on, whereas those that remember NCFC before the PL era much prefer the community/local club route?[/quote]

This thread misses the point somewhat.

Many of NCFC''s problems have been self-inflicted by poor or non-existent decision-making at Board level.

They are not even about lack of money at all. But of course by the time the parachute payments run out the self-funding model is no longer tenable either.

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[quote user="king canary"]Strange list of clubs there Rhubarb.

Some of those have ownership models not much different to our own- well off local owns the club (Bolton, Boro, Blackpool, Wigan).

Then I can also see two recent FA Cup winners, a recent league cup winner, a couple of teams who''ve been in European finals not too long ago and a few league and FA Cup finalists.[/quote]I would beg to differ thereBoltons ''local owners'' went belly up this summer. the Oystons pretty much cleaned out Blackpool as similar down the A140.I''m not too sure how far back you are going either.The point being made is that all of those clubs have been in receipt of investment way beyond anything we have had. Yet where are they now. Most in a much worse position than we areFor every Dave Whelan and Steve Gibson there are a large number of ''undesirables'' as the news of Forest''s owner has been shown.Money does not come easy, and not without a price and risk either. Many who took (or obliged more like) gift horse the are now stuck with little chance of escape of having a say in matters.For all our supposed faults we are in a far far better position that a good few many.

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Thanks for the links Rhubarb.The other thing is that Football is massively overpriced to the TV companies - it is getting to the stage where even the big TV companies can''t afford it. It has been a major drag on the profitability of BT. Other sports are cheaper - they managed to get Australian cricket rights - including this year''s ashes + the Big Bash for 5 years for about £80m. History is littered with fools that rush in at the end of a speculative boom - but they assume it is going to go on for ever.

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@rhubarb

No that is fair, there are obviously no guarantees. I think the worst case in someways is a Marcus Evans type- big wallet but no desire to invest.

However as I''ve discussed with a few on here before there are plenty of stories of teams getting outside investment and going from strength to strength - it isn''t a black and white issue. You can highlight Boro as someone who is now not in a much better position than us but they have in the meantime won a league cup and had an amazing European run in the last 15 years, something we''ve not had in my time of supporting Norwich.

I guess the question is two fold- firstly do you believe new investment is worth the risk and secondly how much of a chance do you think this model has of succeeding.

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The issue facing us now is not one of Philosophy, but of maths.

Our turnover will drop to around £25m and our playing wage bill will need to drop to (say) not far beyond £20m (from a recent high of £55m).

We can finance immediate losses via player sales, though such players will need to be replaced at some cost unless Academy or U23 players are promoted. Squad numbers are already considered tight, so squad fat has already been trimmed.

If some high earning players cannot be moved on, these will eat heavily into the wage budget. Naismith, Klose, Pinto at £40k p/w= £2m pa = £6m total + Jarvis, Tettey, Hoolahan, Pritchard, Hanley, Jerome, Oliveira at £30k p/w = £1.5m pa = £10.5m = £17.5m already, so such players are largely unsustainable moving forwards.

Pritchard, Oliveira, Murphy and perhaps Klose and Pinto may have sales value, though in the latter cases vultures will know their wages will cripple us after the first couple of jewels are gone. Why will offers then be generous?

Other Championship clubs lose millions every year. It is not clear that we will be in a position to sustain this via input of shareholder funds or a return to bank debts.

Ironically Murdoch’s millions sustained the position of the existing board better than the new structure may. If it is either loss-making beyond even the very short term or suffers a severe drop in competitive sporting level - the market competition is not standing still, but moving in the other direction note - then within a very short timeframe the club may be more vulnerable to a takeover than at any point for almost a decade.

Parma

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NCFC will always be a part of me. Born there, left there, but still follow furiously.

But the way football has changed and continues to do so rapidly is not really for me anymore.

I can''t escape NCFC but I now get a kick watching a local rugby team. My wife and I took over their catering 5 years ago but have relinquished that my son and daughter in law.I But I became so attached to the club that I bought a season ticket to become a VP.

I go to every home match. I meet up before hand with some old pals but have also made many new friends and have a sense of belonging that I don''t quite have with football anymore. The players are local lads and there are no prima donnas as they don''t get paid. Several play for the county team, Cornwall who regularly get to the County final at Twickenham.

I know I have a detachment from football living down here but I really feel the game stinks.

To think that we are talking about foreign ownership to try and make ends meet let alone expand is absolutely immoral as well as unwelcome.

I cannot see there being a halt to the greed within the game, maybe not just football on its own but celebrity and businesses as well.

As much as I cheer for our players each game please somehow convince me that someone on 20K a week for instance can feel any injustice.

And the excuse that they must rest just winds me up and I don''t understand those that believe it. All that nonsense about the Arsenal game being the reason we have been losing when everyone knows it is because we are stuck with either out of form or injured strikers.

So you can stick your Chinese investors behind their wall (is that why Trump is in China to see how they are built?).

If there is a move to that then I believe the support will change and the attitude towards the club will also.

Talking to a Baggie today he told me that a poll of WBA supporters have voted over 90% for Pulis to be sacked. The want a big foreign name to come in bring in johnny foreigners. If that happens then WBA, who regularly play 8/9 Brits and regualrly finish pretty safe early doors will just become another one to fall to the trap of believing that the Prem is the only place where good entertaining football exists.

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Keegan, interesting that you have a sense of belonging at your rugby club. I can’t help wonder if a lot of us now go because of a sense of loyalty instead

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Whilst I take the point of much of what you say Parma, the consequence of it is that there is nothing within it that suggests that we are an attractive proposition for a takeover. Indeed your figures would suggest that it would be easy to blow £50 to 100m in a few years with no certainty of advancement - it is not a particularly attractive proposition for most investors.Whilst revenues would increase 3 or 4 fold on promotion (assuming the current deal remains as lucrative) costs, including the needs for transfers are likely to increase by a similar (or even greater degree) and necessitates taking on still more risk. There is considerable risk involved and even if successful in football terms, relatively little profit. Buying a football club at this stage of the cycle would be foolish investment - I would be concerned at having owners who were prepared to take this level of risk and strongly suspect that they would not have the best long-term interests of the club at heart. Specifically they might underwrite the footballing risk by being prepared to sell the non-footballing assets - the ground, the training ground and even rights to the brand name etc.It is less of a rational investment and more a "sh1t or bust strategy."

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