Financial Review

[interwebme 60]

This makes for interesting reading; what a great job everyone at the club is doing! 

http://financialfootballnews.com/norwich-city-2018-financial-review-canaries-cash/

[A Load of Squit 6,260]

 

Either I'm not reading this bit correctly or they've got the Bond Issue bit wrong.

After some big transfers Norwich saw cash levels soar from last year, rising from £1.4m to £16.1m (1,050%). This was in addition to a £2.3m investment in the training ground and academy after what their owners called “years of under-investment”. This was financed by a new loan from the owner of £4.8m, showcasing some much-needed ambition.

 

[Badger 2,745]

I think that you are right LOS

[Graham Paddons Beard 2,786]

All seems a bit confused to me ? By way of example:

Wages stayed relatively flat, decreasing from £55.1m to £54.3m (1%) as despite the new signings their wages were relatively similar to those departing. The decrease in wages of around £800k is equal to approximately £15k a week saving on wages which is minimal.

I would say the wages being flat were due to the length of contracts ? New signings are not earning the same as those leaving are they?

 

[PurpleCanary 6,378]

One should not nitpick too much, especially since the report is I think generally right that the overall picture is reasonably good, but this paragaph is confusingly written (referring to next year when it means this season) and wrong about parachute payments, in that it talks as if we are getting a third year - albeit a smaller amount - when in fact they finished after two seasons:

Looking forward, Norwich have had quite the resurgence this season and are among the front runners for promotion currently. Promotion would bring with it great riches again compared with the last 2 seasons. However, the riches of promotion won’t be evident in next year’s revenue with the club still being in the Championship. Revenue is likely to fall as the fall in parachute payments is likely to be bigger than any gains in broadcasting revenue (from a higher league position) and commercial revenue.

The whole point about our finances this season is that we get no parachute money, which is why the board started downsizing last season, so it would be possible this season roughly to balance the books.

[Icecream Snow 777]

1 hour ago, Graham Paddons Beard said:

All seems a bit confused to me ? By way of example:

Wages stayed relatively flat, decreasing from £55.1m to £54.3m (1%) as despite the new signings their wages were relatively similar to those departing. The decrease in wages of around £800k is equal to approximately £15k a week saving on wages which is minimal.

I would say the wages being flat were due to the length of contracts ? New signings are not earning the same as those leaving are they?

 

Yeah, this season we're still paying for Naismith, Jarvis, Wildshut, McGovern, Pinto, Oliviera and Klose. With Russell Martin's exit money as well. Only Oliviera would currently be a liability for next season.

[Aggy 944]

2 hours ago, PurpleCanary said:

One should not nitpick too much, especially since the report is I think generally right that the overall picture is reasonably good, but this paragaph is confusingly written (referring to next year when it means this season) and wrong about parachute payments, in that it talks as if we are getting a third year - albeit a smaller amount - when in fact they finished after two seasons:

Looking forward, Norwich have had quite the resurgence this season and are among the front runners for promotion currently. Promotion would bring with it great riches again compared with the last 2 seasons. However, the riches of promotion won’t be evident in next year’s revenue with the club still being in the Championship. Revenue is likely to fall as the fall in parachute payments is likely to be bigger than any gains in broadcasting revenue (from a higher league position) and commercial revenue.

The whole point about our finances this season is that we get no parachute money, which is why the board started downsizing last season, so it would be possible this season roughly to balance the books.

To be fair Purple, in the section you’ve quoted they don’t say we will be getting any parachute payments. The fall from second season parachute payments to zero parachute payments is likely to be greater than the increase in TV revenue we will get from finishing higher this season than we did last season. 

Also in fairness to the article’s writers, what they say about the dates is correct as well. They are currently doing a 2018 review (in January 2019) which has figures largely based on the 17/18 season. In their 2019 review (to be done In January 2020, next year) they will discuss revenues from the 18/19 season. 

Next year doesn’t refer to this season, it refers to their review to be carried out next year (which will include figures from this season).

2 hours ago, Graham Paddons Beard said:

I would say the wages being flat were due to the length of contracts ? New signings are not earning the same as those leaving are they?

 

The article is comparing last season with the season before. So when you look at players out vs players in, 15k a week savings is probably about right (although does seem slightly low to me). The article says the transfers are:

”Entering Carrow Road were Hanley (£3.4m), Franke (£2.7m), Hernandez (£2.3m), Stepermann (£1.5m), Srbeny (£1.4m), Husband (£1.0m), Vrancic (£0.7m), Raggett (£0.2m), Abrahams (£0.2m) and McClean (£0.2m) for a combined £13.6m.

Leaving Norwich were Pritchard (£11.1m), Jacob Murphy (£10.2m), Howson (£5.1m), Jerome (£1.5m), Dorrans (£1.4m), Rudd (£1.0m) for a combined £30.3m.”

That’s 6 out, but 10 in. Obviously the other players who haven’t left or joined will have roughly the same wages (I suppose maybe performance related bonuses being different ?). I have absolutely no idea how much all of those 16 players were/are on, but a saving of 15k a week, with an additional four players in (and a transfer-profit of 16.7 million) seems like good work to me.

[PurpleCanary 6,378]

4 minutes ago, Aggy said:

To be fair Purple, in the section you’ve quoted they don’t say we will be getting any parachute payments. The fall from second season parachute payments to zero parachute payments is likely to be greater than the increase in TV revenue we will get from finishing higher this season than we did last season. 

Also in fairness to the article’s writers, what they say about the dates is correct as well. They are currently doing a 2018 review (in January 2019) which has figures largely based on the 17/18 season. In their 2019 review (to be done In January 2020, next year) they will discuss revenues from the 18/19 season. 

Next year doesn’t refer to this season, it refers to their review to be carried out next year (which will include figures from this season).

 

Aggy, the writer talks about a fall in parachute payments. You only refer to it that way if you mean you are still getting some. If he had meant a fall to zero he should have talked about the loss of such payments (my suspicion is he thinks we are due three years' payments, which would have been the case if we had been up for more than one season). And in that "looking forward" he must talking about this 2018-19 season...

Looking forward, Norwich have had quite the resurgence this season and are among the front runners for promotion currently. Promotion would bring with it great riches again compared with the last 2 seasons. However, the riches of promotion won’t be evident in next year’s revenue with the club still being in the Championship. Revenue is likely to fall as the fall in parachute payments is likely to be bigger than any gains in broadcasting revenue.

...because he is saying for the purpose of those accounts, with reduced parachute payments, we will still be in the Championship. Well, the only season we can be sure we are in the Championship is this one, 2018-19, when we don't get PP. The clear meaning, whether meant or not, is that we are still benefiting from PP for a third season.

As said before, the point is that the loss after two years of PP is leaving a massive hole in the accounts. To say that whatever loss in 2018-19 will probably not be compensated for by increased TV revenues - "the fall in parachute payments is likely to be bigger than any gains in broadcasting revenue" - ie that the figures might not be that far apart, is a total nonsense, in the sense that there is no way increased Championship TV money, which is measured in single million figures, could possibly cope with our massive PP fall to zero.

[Aggy 944]

Where have they said the figure might not be too far apart? 

If the report is correct, the difference in tv broadcasting revenue between 8th place in 16/17 and 14th place in 17/18 was a drop of £12.9 million. I don’t know what the figures are for other finishing positions, but it looks to be an increase of roughly £2.15 million per position based on those figures. If we finish top, the difference between 14th and 1st could therefore be worth around £28million, significantly more than ‘single millions’. 

£28 million is still less than the 34million parachute payments (ie; “the fall in parachute payments is likely to be bigger than any gains in broadcasting”) but perhaps not as big of a difference as implied in your last paragraph. 

Also interestingly, according to Wikipedia (so pinches of salt at the ready) Villa's third season parachute payment this year will be about £15 million. If the writer of the article thought we were getting 15million in parachute payments as a third season payment, the drop from £34mil to £15 million would have been £19million. On that basis, if your interpretation is correct Purple, the writer must think we will only finish 6th at best, despite saying elsewhere we are amongst the front runners for promotion.

(Above on the basis that 14 to 5th would be worth over £19million and therefore contradict the writer’s statement that tv revenue increases will be less than the drop in parachute payments.)

In any event, the figures look good and the club management has done a good job of keeping us relatively stable financially whilst now pushing for potential promotion once more. 

[PurpleCanary 6,378]

3 minutes ago, Aggy said:

Where have they said the figure might not be too far apart? 

If the report is correct, the difference in tv broadcasting revenue between 8th place in 16/17 and 14th place in 17/18 was a drop of £12.9 million. I don’t know what the figures are for other finishing positions, but it looks to be an increase of roughly £2.15 million per position based on those figures. If we finish top, the difference between 14th and 1st could therefore be worth around £28million, significantly more than ‘single millions’. 

£28 million is still less than the 34million parachute payments (ie; “the fall in parachute payments is likely to be bigger than any gains in broadcasting”) but perhaps not as big of a difference as implied in your last paragraph. 

Also interestingly, according to Wikipedia (so pinches of salt at the ready) Villa's third season parachute payment this year will be about £15 million. If the writer of the article thought we were getting 15million in parachute payments as a third season payment, the drop from £34mil to £15 million would have been £19million. On that basis, if your interpretation is correct Purple, the writer must think we will only finish 6th at best, despite saying elsewhere we are amongst the front runners for promotion.

(Above on the basis that 14 to 5th would be worth over £19million and therefore contradict the writer’s statement that tv revenue increases will be less than the drop in parachute payments.)

In any event, the figures look good and the club management has done a good job of keeping us relatively stable financially whilst now pushing for potential promotion once more. 

However, the riches of promotion won’t be evident in next year’s revenue with the club still being in the Championship. Revenue is likely to fall as the fall in parachute payments is likely to be bigger than any gains in broadcasting revenue.

 

Aggy, the writer doesn't say it in so may words but simply to say the fall in parachute payments is likely to be bigger than any increase in TV revenues suggests the two figures are may be reasonably close.

Whereas the reality is that in the season the writer is talking about, which is 2018-19, our PP income falls from 32m pounds in 2017-18 to zero, while likely total income from Championship TV coverage should be at most, say, 4m pounds (those figures you quote are for PL TV, which will - we hope - apply to 2019-20).

That is a 28m pound gap. You don't use the phrase "...likely to be bigger..." about a 28m gap!  You say there is absolutely no way any increase in Championship TV money could possibly bridge that gap. Which is why I believe the writer thinks we are still getting PP this season.

[Aggy 944]

The figures I’ve quoted are those used in the article, which refer to the drop between finishing 8th in 16/17 to 14th in 17/18. Nothing to do with prem tv revenue.

[interwebme 60]

I feel this thread has been derailed somewhat.

Point is; good news! 😄

 

[nutty nigel 7,902]

I wasn't aware there was any revenue connected to championship finishing placings. 

[nutty nigel 7,902]

https://files.canaries.co.uk/canaries/Annual Report 2018_WEB.pdf

[Icecream Snow 777]

Thanks NN - I found the final page on your link interesting

 

"POST BALANCE SHEET EVENTS

Transfer of players’ registrations

Subsequent to the year end the Group has acquired the registrations of players E Buendia, T Pukki, M Leitner, T Krul, along with J Rhodes and F Passlack on season-long loans.

The Group is committed to payments of £4.2m in respect of these transactions with further payments due of £9.0m dependent on Club and/or player performance."

I could understand the initial £4.2 million but the extra £9million seems steep. Unless we have a clause to buy Rhodes if we go up?

[It's Character Forming 1,204]

Isn’t this report based on the last Accounts which reflect last season and were discussed pretty well on here, so now it’s all rather old news?

[PurpleCanary 6,378]

4 hours ago, Aggy said:

The figures I’ve quoted are those used in the article, which refer to the drop between finishing 8th in 16/17 to 14th in 17/18. Nothing to do with prem tv revenue.

 

Aggy, you're right. They don't refer to Premier League TV income. I was in a hurry and didn't check. I just assumed they had to do with PL TV money because there was nothing else that kind of gap of 12.9m pounds could be attributed to. The point being that they have nothing to do with TV income related to us  finishing six places lower in the Championship. As nutty says, there is no direct correlation in the Championship between where a club finishes and how much TV money it gets.

What that report stupidly describes describes as "Broadcasting revenue", as if it is all or even just significantly TV money, and linking it to finishing places:

"Broadcasting revenue fell significantly from £52.5m to £39.6m (25%) after Norwich finished 14^th, 6 places lower than the previous season. However, the main reason for the drop was a full ["fall"]  in parachute payments following their relegation 2 years ago, this will fall further again next season."

.. is, as it goes on to say, in reality parachute payments, and that drop of 12.9m pounds you highlighted is in effect the difference between our first year of PP and our second - and final - year. I doubt there was much change at all in actual broadcasting income between those two seasons. Or that our TV income in this season will be that much higher, even with more matches being shown. A million or so perhaps.