Foreign Ownership/Investment

[FenwayFrank 2,457]

You have to admire supporters of clubs in leagues 1 and 2. Think of the problems their clubs must have.

[Lessingham Canary 99]

@Keelansgrandad

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.

Fair point, and one that would be shared by many who follow non league football, and on that front you could watch Truro City, a club on the up these days and making a name for themselves.

[Parma Ham's gone mouldy 2,219]

I’m not endorsing it or encouraging it Badger, I rather respect Keelan’s approach to it all in fact.

The increased attractiveness of the club to possible takeover In the near future stems from two clear factors:

There is no indication that we could withstand - even in the very short term - repeated Championship losses that are the norm, without returning to significant multi-million shareholder loans or revisiting longer term bank debt. Assuming it would be made available to us (and against what collateral).

Further to that the nominal value of privately held shares in a loss-making business, requiring funding injection from a.n.other source would possibly reduce their practical value to nothing. This would mean that an investor could use all their input funds on players, infrastructure et al rather than than seeing the first (say) £20m-£30m swallowed up purchasing a majority shareholding. Such a majority shareholding purchase de-facto does not put a penny in the club and would merely switch the owners shares to another. When the club was richer, more successful in a sporting sense and in the Premier League, the shares would have had a value.

Thus the club, whilst diminishing financially and quite possibly in a sporting sense, becomes a ‘cleaner’ more attractive purchase to an investor.

Parma

[Bill 1,788]

[quote user="Parma Hams gone mouldy"]

There is no indication that we could withstand - even in the very short term - repeated Championship losses that are the norm, without returning to significant multi-million shareholder loans or revisiting longer term bank debt. Assuming it would be made available to us (and against what collateral). [/quote]Or there is no indication that we could not withstand "repeated Championship losses that are the norm,"  That has rather been the ''norm'' for most of our time. However I doubt we could withstand the Yare flooding the ground either, but I''m sure we will be ok until that happens.The current business method is to be able to produce our own players - not resort to loans. If we had to for some reason I''m sure we could use the ground or Colney as collateral.No need to throw yourself out of the top window... just yet.

[Parma Ham's gone mouldy 2,219]

Sorry Rhubarb, there are indications:

The Board has stated openly that they have no desire to take the club back into debt to fund losses.

The majority shareholders and another Director were paid out the remainder of their monies owed (previously provided to the club in the form of loans) in recent accounts.

Thus any funding of typical annual multi-million pound Championship losses would have to be provided for by either of the above methods under the current structure.

If the self-sustaining model was starting from scratch or from a League 1 scenario this might be possible. The issue we face is dealing with the dramatic 75% drop in revenue following sporting success. This is the ugly downside of the fundamentally changed Sky-based landscaped that has created Keelan’s understandable ennui.

It is the success that kills you.

Parma

[Guest]

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

Nothing wrong with loyalty Double FF. It is a line in the sand. It is what many see as defining their part in the club both historically and in the future no doubt.

While I don''t have the magic of matchday once a fortnight, I am lucky that my remoteness doesn''t question my loyalty, such as some people questioning whether it is worth buying a season ticket if they don''t enjoy the fayre on offer.

And at times, even watching us on Ifollow, just doesn''t grip like it should and that is why I enjoy a live game, even though it is rugby, so much.

Yes I could even watch Truro City, currently high in National League South and making it to the 1st round of the FA Cup. However, there has been so bad feeling locally on earlier events with the previous owner and many people just don''t want to be associated with the club.

[Duncan Edwards 2,223]

What I find a little strange is the concept that we should be bigger or better or somehow superior because we''ve had a relatively successful period in our recent history. Sorry, what I mean is that we''ve spent a large percentage of our very recent history in the top flight.

The notion that this will make you rich beyond your wildest dreams or that you''ll suddenly be in the running to sign Neymar are wildly wide of the mark. Yes, there are huge sums of money changing hands in that environment but it''s an inflated market in which you exist and as such those sums are irrelevant.

It''s not about Norwich receiving x Million pounds because every club there receives it. Every club that finishes above you gets a bit more. Because of the market you trade in ALL of those clubs fish in the same pond. I''d stretch as far as saying that "most" clubs that aren''t the "big 7 or 8" throw the lot at trying to maintain the status quo; just as we did after the Lambertmiracle that saw us stay up. Consequently, when you are eventually relegated, you aren''t at some special advantage in the Championship because just trying to stay up the year before has seen every available penny slung at the proverbial wall in the hope that your recruitment fund has been better spent than your rivals. The parachute payments don''t give you a blank cheque book for the championship at all. They just go towards softening the blow of paying inflated prices, wages and bloody agents fees because every other bugger in the world knows that Prem clubs are "minted".

It''s a fallacy. It''s poisonous. The game is eating itself from within.

How many seasons have Sunderland spent in the top flight? How are they going? They''re not really parachute payments; the imagery has you gliding down slowly, remaining above the hordes below but the reality is that you are crashing pretty bloody hard into the sea and this cash is a semi-inflated dinghy.

Can''t see buoyancy-aid-payments catching on though.

[Bill 1,788]

[quote user="Parma Hams gone mouldy"]Sorry Rhubarb, there are indications:

The Board has stated openly that they have no desire to take the club back into debt to fund losses.

The majority shareholders and another Director were paid out the remainder of their monies owed (previously provided to the club in the form of loans) in recent accounts.

Thus any funding of typical annual multi-million pound Championship losses would have to be provided for by either of the above methods under the current structure.

If the self-sustaining model was starting from scratch or from a League 1 scenario this might be possible. The issue we face is dealing with the dramatic 75% drop in revenue following sporting success. This is the ugly downside of the fundamentally changed Sky-based landscaped that has created Keelan’s understandable ennui.

It is the success that kills you.

Parma[/quote]You are simply putting up straw men to knock down.Why should the club have "typical annual multi-million pound Championship losses" ? The wage bill will simply reflect what we have. Most of the big earners have gone as will the likes of Pritchard and Oliveira. others like Tettey will be out of contract if we don''t go up..The drop in income is only dramatic in terms of amount - we have ample time to adjust, as we did in the summer. how much did the sales of Murphy and Howson raise? How much will the sales of Murphy, Pritchard, Klose, Olivera, Maddison, Pinto or even Trybull raise if needed ?Next May will certainly be the end of the season, but not the end of the world as you are trying to project.cheer up, old fellow, these are situations that we would have dreamt of not many years previous

[Felixfan 53]

Any new investor does not have to be a majority shareholder.

If no new investment materialises then we have to live within our means in whatever league we find ourselves.

We have been there before and will do so again and every true supporter will go along for the ride.

I have great support and admiration for our majority shareholders who are present at every game and have made a sustainable model for the club - debt free, cat 1 academy,own the ground and stadium.

Yes they and the board have made mistakes but any money has been ploughed back into the club rather than an owners pocket,but if new investment came along we would need to protect our assets.q

[JF 694]

I have great support and admiration for our majority shareholders who are present at every game and have made a sustainable model for the club - debt free, cat 1 academy,own the ground and stadium

That’s more luck than judgement. When we went down to league 1 there was serious consideration for the stadium being sold. Lambert dug then out of their financial black hole by dragging the team up to the PL.

[Parma Ham's gone mouldy 2,219]

Not really Rhubarb. We are discussing the likelihood of investment and probabilities of success moving forward.

Assessing probabilities in decision-making is precisely what the brain, the markets and Football Managers do all the time.

It would be an unusually-impoverished bookmaker who had our chances of success increasing going forward with the parameters as currently laid out.

Let’s give a simple real-world example based on your own point:

Oliveira is a saleable asset. At the end of the season some assets will need to be sold. He will be in demand. He may well want to go (especially if we sell other assets and reduce sporting competitiveness in players’ eyes - even if not yours). We currently struggle for goals because Jerome works hard, though is not ruthless in front of goal. Watkins has not yet convinced.

When Oliveira was purchased there was not universal approval. ‘Cheap option’ was heard, ‘never settled’ another, ‘gamble’ frequently. That was at £5m.

We can of course find a Vardy for no money from the lower Leagues here or in Germany. Of course we can.

The bookmakers wouldn''t bet on it though. It is not that likely.

Parma

[Crabbycanary3 994]

Am I right in thinking that some fans believe our owners have to be fans of the Club, and yet happy that the players do not have to be ''one of our own'', and have supported us, since they were a child?

Owners and players are a (equally?) vital part of the Club, aren''t they?

[Crabbycanary3 994]

Oh, and keelansgrandad, I know exactly what you mean !

[king canary 7,580]

@Rhubarb

"Why should the club have "typical annual multi-million pound Championship losses" ?"

Because that is the reality of life in the Championship- teams just do not make profits at this level, even with large scale player sales.

Our wage budget was reportedly £55m last season. Reports are we''ve trimmed a good £10m+ off but that still doesn''t come close to the level of cost cutting we''ll need to do. You say most of the high earners are gone but Naismith, Jarvis, Klose, Pinto were all signed on Premier League wages and that is before we think about players like Nelson, Jerome, Wildschut and Pritchard.

Yes, we can sell players. But say we do sell Maddison, Pinto, Klose and Nelson for instance. We might raise £30-40m but most of that gets swallowed up to cover the wage bill and leaves us needing to find a new right back, center half and striker without even considering replacing players like Gunn and Reed who are also on loan. Once we''ve done that we won''t have any left to consider strengthening anywhere else on the pitch.

[Coq au vin 0]

As I wrote earlier - surely it is about supporting your club no matter the surrounding financial environments though I appreciate this could also be a generational thing as I''m only 33 and have no experience of the 70''s and little of the 80''s.

I want the club to be competitive. But I also hate the monied up owners of Villa and Wolves. This is where I''m conflicted: on one hand I don''t want Norwich to become a faceless plaything of an egoist (think Mendes and Wolves) but on the other I would love for City to be competitive and push each season into the play offs or the Prem. I''d love to go to games without the feeling of absolute dread because deep down I know we lack the quality to play teams like Derby or Cardiff or whoever.

In order for Norwich to be competitive it requires new ownership that''s the bottom line, we all see that. I do think it''s now we need a much needed injection in the ailing arm of City. I''m not adverse to foreign take over so long as the club keeps its character and I think that''s the important underlying factor a take over would need to address. I suppose in fairness to Villa, at least Dr Xia seems to live and breath the club.

Unless all this debate is for nothing when post the Int. break Farke goes on a massive run and we smash it. Then I''ll eat a hat....

[Badger 2,405]

Parma, as I understand what you are saying much of it is predicated on the assumptions that1. We could not withstand a series of multi-million pound losses without the resale value of the club being substantially reduced - I agree2. That this series of multi-million pound losses is very likely. I have not seen evidence from NCFC''s accounts that supports this assumption. Of course, we are losing 75% of our revenue over a two year period if we are not promoted - however, it is a known loss and something that we are able to plan for.Of course, with regards the second assumption, we do not have full knowledge, but we do have some information that suggests that a transition plan is in place.a) The way that several high costs players were allowed to leave the club on frees in July which will significantly reduce the wage bill.b) The sales of other high cost players - Dorrans and Howson.The net effect of a + b is assumed to be £10m+ which does not seem unreasonable.c) Player sales - note 30 (page 35) of this year''s indicates that post balance sheet transfers have seen us with an £8.1 million pound surplus (16.9m -8.8m), which can further compensate for high wage costs.d) Expiring contracts. Wes''s and Alex Tettey''s contracts are due to expire at the end of this year, saving, I would suggest at least another £5+ as will presumably expensive loan fees for Gunn and Reid.Steve Stone has estimated that the second and final round of parachute payments for 17/18 are likely to be around £29m.* Most of this is likely to be covered by points a) to d). There is likely to be further player sales, but there is  no evidence that I can see that it is a desperate fire sale that I have inferred from what you say.Moving forwards, there is some reason to hope based upon our higher non TV revenue than most other championship clubs. We have better attendances and better commercial activities than most. If we have an Ipswich style stagnation, attendances will fall, I am sure, but we would still have other financial advantages over them and other championship clubs.

* http://www.pinkun.com/norwich-city/revealed-norwich-city-s-2016-17-premier-league-parachute-payment-1-5045086

[lake district canary 4,531]

[quote user="Morgan"]

In order for Norwich to be competitive it requires new ownership that''s the bottom line, we all see that.[/quote]

You can''t say that we all think that, Morgan.  There are plenty of people who appreciate what the club are trying to do and actually recognise that stability and continuity are important - more important than selling out just for money.  A stable club, a financially viable club, a club that has a big fanbase, a club that owns it''s own ground, etc etc etc.  We will always be a great and competitive club.   

[Guest]

I don''t believe that investment is purely about players though.

It involves ground and training ground upkeep and improvements for one.

Alan Sugar knew when the Prem first started that all that influx of new money would distract many owners (I remember Swales at Manchester City voting for downsizing Division 1 and then changing his mind when they were relegated) and particularly the players who I suppose quite naturally thought they should have the lion''s share.

So while there is ever increasing money coming into the game much of it is in fact going back out straight away.

We did fall into that trap in 2005 and have still not learned.

If we cannot get players to play for us unless we offer them outrageous wages and then regret it when they turn out to yielding nothing for that wage, then maybe we should be trying, as with Maddison, Ragget and Abrahams, to forge a new method of aiming for success on the pitch but not at any or over inflated prices.

[Coq au vin 0]

I have no doubt we''re a great club Lakey. I love it. But competitive? To what extent do YOU mean? I feel we''re competitive in the middle of the Championship. But nothing more right now.

Do we all have ideas of what level we''d like to be competing at?

For me, to push for a comfy play off place and tickle the autos in the next few seasons would be great. That would be my idyll. But I can''t see it. Am I being a pessimist... errrrr. perhaps but it''s with a dash of realism from how things are evolving in front of us.

[lake district canary 4,531]

Things are evolving imo - for the better. We won''t be getting any more over paid premier league wannabes who haven''t got the stomach for the championship. We will be getting young players in and that is a good thing imo. We will be able to offer good wages to players - we just won''t be able to pay extortionate transfer fees. So a young competitive squad has to be the aim. So if the sporting director/coaching system we have in place does it''s job, we have years of competitive football to look forward to. And that means challenging for at least the play offs every season.

[king canary 7,580]

@Badger

Wages are the key factor really.

According to the accounts we were running a wage bill of about £55m last season.

With all the players leaving and cheaper replacements coming in reports seem to suggests we''ve taken another £10m+ off. So being generous we''ve maybe bought it down to £40m.

Now it seems like our revenue is going to be in the £25-30m mark. So our wage budget is probably going to need to be slashed in half and we don''t have as many big earners out of contract at the end of this season to help that. So we''re talking about getting rid of £15-20m in wages and that is before we even think about replacing any of those leaving. If you look at the Championship many of the teams run wage budgets at over 100% of revenue- something we just cannot do.

[king canary 7,580]

@LDC

"We will be able to offer good wages to players - we just won''t be able to pay extortionate transfer fees"

That just doesn''t seem true to me. If we''re to be self sustaining we need to keep our wages below our revenue which means a wage budget of around the £20m mark. In comparison clubs like Reading, Forest, Derby and Fulham are all running wage budgets north of £30m according to this link.

https://www.insidermedia.com/insider/national/football-finance-championship-club-by-club-2015-16

[SwindonCanary 455]

We reduced the wage bill by getting rid of our high earning players, but look at where they went, are they paying the same wages ?

[ROBFLECK 132]

Sorry LDC, I tend to agree with Morgan... The players to get you to achieve promotion are the ones you''re going to have to pay to keep... They''re sniffing around Maddison at this instance...no promotion? Maddison, Oliveira etc...off... No investment , will reduce the chances of promotion... I feel we ''re in a long stay in the Championship

[Badger 2,405]

[quote user="king canary"]@Badger

Wages are the key factor really.

According to the accounts we were running a wage bill of about £55m last season.

With all the players leaving and cheaper replacements coming in reports seem to suggests we''ve taken another £10m+ off. So being generous we''ve maybe bought it down to £40m.

Now it seems like our revenue is going to be in the £25-30m mark. So our wage budget is probably going to need to be slashed in half and we don''t have as many big earners out of contract at the end of this season to help that. So we''re talking about getting rid of £15-20m in wages and that is before we even think about replacing any of those leaving. If you look at the Championship many of the teams run wage budgets at over 100% of revenue- something we just cannot do.[/quote]I fully understand that it''s about wages KC and that we are going to have a wage bill somewhere iro £20 or subsidise it with player sales. Wes and Tettey are out-of-contract at the end of the season and they are likely to be big earners, further reducing the wage bill. In 2018, we lose Klose, Pinto, Jarvis, Naismith, Jerome, McGovern and Wildshutt off the wage bill.  - we have a transfer surplus that can smooth, already £8m+, to smooth over the interim.If I take the £40m estimate you give, the end of 2018 contracts (WH + AT will) + Gunn and Reid''s departure take it down to c £35m? The current transfer surplus of £8m to £27m. A further "big" player sale is likely to be necessary for this year, I suspect, but there is no reason to suppose that we are likely to have big and repeating multi-million pound deficits as Parma, I believe, suggests. I do accept that it is all bit fag-packet calculation but nevertheless, more detailed than some of the points made.The 2019 contracts ending, will put us within "touching distance" of a reasonable championship budget for players. I suspect that we will run a wage budget that is higher than £20m and subsidise it with player sales. It does of course, place a big emphasis on the recruitment system but it does not, suggest that the shares will collapse in value and the club will be financially worthless. Incidentally, a perhaps more positively, a £25m wage bill would make us more competitive than most championship clubs in the long term - we will have to replace leaving players, of course, but with good recruitment, we will retain the financial muscle to identify and buy young prospects or under-valued others.2016 figures e.g. Ipswich £16.6m (2016); Brighton £27m; Wolves £18.2m; Sheff W 19.3m; Leeds £18.1mOf course some of these clubs now have higher figures (not currently available) and there were others that already had higher. However, this is not sustainable - some clubs have gambled all on promotion to the riches of the premier league and whilst it has worked for some it is a great threat to others. Moving to a system where all clubs make multi-million pound losses is economic madness and will not last. The club would be foolish to jump on the bandwagon at what prove to be the height of the speculative boom. IMO the self-financing option is prudent and the best guarantee of the long-term future of the club.

[Rogue Baboon 0]

Thats an awful lot of players that need replacing, can we afford quality replacements to enable us to compete in the Championship?

Also, its going to take us to 2019 to get our wage bill down - thats another 2/3 years worth of accounts that will show big losses, which inevitably leads to player sales.

Also we are not moving to a system that makes multi-million pound losses, we are already their & are having to make wholesale changes to try and become self funded.

[Badger 2,405]

Thats an awful lot of players that need replacing, can we afford quality

replacements to enable us to compete in the Championship?

We will retain the registration of a number of other quality players beyond this point. But yes, it is a challenge of effective recruitment - but to some extent, that is the case anyway.

Also, its going to take us to 2019 to get our wage bill down - thats

another 2/3 years worth of accounts that will show big losses, which

inevitably leads to player sales.

No. We are currently in 2017-18 and it seems very likely that we are able to cover player costs this year. 2018-19 will see us start with a much lower wage bill, but I expect us to sell again to cover the difference which will be reducing - if possible bigger wage earners

Also we are not moving to a system that makes multi-million pound

losses, we are already their & are having to make wholesale changes

to try and become self funded.We made a small loss this year, but a much bigger profit in 2015-16. Further sales are likely to happen, possibly this season, but certainly next.We will remain a club with one of the biggest "non-subsidised" turnovers and one without debt. We will be in a much stronger position financially than we were prior to Lambert. With good recruitment and good coaching staff, promotion remains a possibility - we may, however, have to be patient. But we are all grown-ups!Better this than a "sh1t or bust gamble" in the middle of some form of speculative boom.

[king canary 7,580]

@Badger

I''d be surprised if the £8m transfer surplus is just sitting there to be used against the wage budget next year- I imagine a good chunk of it would have been swallowed up covering any shortfalls this season.

I also think you''re being over generous to say we can get £5m off the wage budget from Tettey, Wes, Reed and Gunn. Gunn didn''t have a minute of first team football before he came here so I''m not sure he''s on £20k a week.

Even if those do work out we''d still need to further slash the wage budget to break even, even before considering any replacements. Also if we want to keep Trybull beyond this season he''ll need a new contract and I''d imagine a wage rise.

It also relies on no other drops in revenue too. So no drops in ticket sales, no fall in sponsorship revenue etc etc.

And finally it just sort of glosses over needing to sign new players. If we lose Wes, Tettey, Reed and Gunn we''ll need at least a new goalkeeper and a new central midfielder without even factoring in any other areas where we might want to strengthen. So I''d imagine we''ll need more than one big player sale.

[Rogue Baboon 0]

''We will retain the registration of a number of other quality players beyond this point. But yes, it is a challenge of effective recruitment - but to some extent, that is the case anyway''

Will we? Given its likely that our better players will move on as we have to sell?

''We made a small loss this year, but a much bigger profit in 2015-16''

Of course we did, we had PL money. As for the small loss, we had parachute payments. Now we dont have them which means we have lost 30mil in money coming in, which has to be covered. I would be amazed if we didnt make a substantial loss in the next few years as we adjust to losing huge amounts. Of course none of us know what we have ''in the bank'' to cover the losses as well - it may be that we possibly have the reserves to cover a substantial loss for a few years.

Is the argument there to put pretty much the whole squad up for sale to completely slash the wage bill & ensure we get good transfer fees instead of letting people leave when their contract is up?

[king canary 7,580]

@Rogue

The argument will be to look to offload a number of high earners this summer to at least get some fees in for them along with shifting wages.

Maddison is probably both our most valuable asset and also the least useful to sell- he won''t be on huge wages and has a long term contract.