Norwich City Appeal Fund Trust

[nutty nigel 7,527]

2 minutes ago, TeemuVanBasten said:

I have no idea who GMF even is, so I guess I'll just have to remain confused. 

Doesn't matter who he is. If you want to know he's a PUP and a knowledgeable poster. You don't really need to know more than that.

But his little seed didn't fall on stoney ground. A bit of me wishes it had....

[GMF 736]

18 minutes ago, nutty nigel said:

No doubt you know far more than me about this GMF.

I still dont think 2009 was as close as 1996. We may have been even closer in 2007 when the parachute payments ran out but we were kept afloat by loans from D&M. Michael Foulger and the Turners. 

So we now have D&M, Michael Foulger, the Turners and Alan Bowkett as saviours.

Last but not least, unless I'm wrong the 'securitisation' from AXA was based on future season ticket sales, so take a bow The Fans and Michael Foulger again.

The Premier League introduced parachute payments in 2006-07, so we didn’t actually receive any following relegation back in 2005.

I don’t have an issue with you personally believing that we were closer to administration in 1996 than in 2009. All I’ve highlighted is that our financial situation was precious in 2009, as supported by the accounts and, indeed, the Club’s own history on its website. 😉

[nutty nigel 7,527]

30 minutes ago, GMF said:

The Premier League introduced parachute payments in 2006-07, so we didn’t actually receive any following relegation back in 2005.

I don’t have an issue with you personally believing that we were closer to administration in 1996 than in 2009. All I’ve highlighted is that our financial situation was precious in 2009, as supported by the accounts and, indeed, the Club’s own history on its website. 😉

Of course it's not personal. There's some great posters making points on this thread from you and others. I'm a bit out of my depth but I'd rather this discussion than the latest ridiculous transfer rumour or the merits of the new kit. Nothing wrong with them just I prefer this.

There's a lot missing from the club's own history on it's website. But then, they do say history is written by the victors😉

You're right about parachutes which is probably even more reason why we were in dire straights in the years leading up to 2009. If we play "if it wasn't for" then those loans I mentioned are definitely up there with Bowkett's rescheduling of debts. 

Am I right that the 'securitisation' from AXA was based on future season ticket sales?

[TeemuVanBasten 3,327]

1 hour ago, nutty nigel said:

I still dont think 2009 was as close as 1996. We may have been even closer in 2007 when the parachute payments ran out but we were kept afloat by loans from D&M. Michael Foulger and the Turners. 

So we now have D&M, Michael Foulger, the Turners and Alan Bowkett as saviours.

Can D&M and Foulger be considered "saviours" for injecting capital desperately required because the club didn't live within its means or sufficiently cut its cloth, as that occurred under their ownership. 

You forgot flogging the corner of our ground to Holiday Inn by the way. 

I suspect that the club had never been in as much chaos as it was in 1996, but I don't think anybody is disputing that. I just don't think Alan Bowkett gets his fair dues, and the thing which triggered the discussion about that wasn't this other thread you were involved in with GMF but this comment by Lakey:

On 11/08/2020 at 11:00, lake district canary said:

My impression at the time was that the club - or as you say Bowkett - went cap in hand and begged the banks to give us a few more months grace. 

And my only point really is that we were incredibly fortunate at the time to have somebody close to the club, an Associate Director, who just so happened to have an excellent reputation as a turnaround specialist in 'the city' built over 20+ years prior to him becoming Chairman.

This was not a trivial matter, we can be pretty sure that they were prepared to restructure our debt because we had Bowkett at the helm and because of his track record in business. 

It is fair to assume that a skint League One club would struggle to attract somebody like that (in fact, not have been able to afford one) if we had to try and find one externally, we were hugely fortunate. Especially at a time when executives in his mould (few and far between) would have been in big demand (as they will be next year no doubt). 

It isn't a slight at Delia, I'll happily give her credit for identifying that Bowkett had the skills and experience required at that time, its giving credit to Bowkett where it is definitely due. 

Edited August 14, 2020 by TeemuVanBasten

[Mello Yello 2,289]

Didn't that unassuming benevolent local Norfolk businessman who thankfully paid Darren Huckerby's wages in 2003/4 also make a substantial financial contribution to NCFC during October of our 2008 season? A significant contribution that allowed Reading's Leroy Lita to come to us on an initial months loan - and which was then extended for a further six games into early 2009?.....Things financially at our club during that time must have been a bit tight?.....Although thanks again, to our unsung benevolent bail-out hero 'Moore the Merrier'...

Leroy eventually scored 7 goals and was actually our season's leading scorer, but unfortunately we were still relegated in 2009.....

 

[TeemuVanBasten 3,327]

2 minutes ago, Mello Yello said:

Didn't that unassuming benevolent local Norfolk businessman who thankfully paid Darren Huckerby's wages in 2003/4

Huckerby is on record as saying that if he knew some random bloke was paying his wages he wouldn't have joined us, but they became really good friends I believe.

[GMF 736]

9 hours ago, TeemuVanBasten said:

I suspect that the club had never been in as much chaos as it was in 1996, but I don't think anybody is disputing that. I just don't think Alan Bowkett gets his fair dues, and the thing which triggered the discussion about that wasn't this other thread you were involved in with GMF but this comment by Lakey:

To be fair to Nutty, the debate about 2009 was triggered by the fourth comment on page one, by Purple, to which I responded a few comments later. For sure, that was a carryover from dialogue between the three of us on a previous thread, however, the comment from Lakey, to which you refer, was much later down the first page.

That said, I’m in complete agreement with your observations about Alan Bowkett, to whom a huge credit is due for his role in stabilising the off the pitch financial position around the time. 

[GMF 736]

10 hours ago, nutty nigel said:

Of course it's not personal. There's some great posters making points on this thread from you and others. I'm a bit out of my depth but I'd rather this discussion than the latest ridiculous transfer rumour or the merits of the new kit. Nothing wrong with them just I prefer this.

There's a lot missing from the club's own history on it's website. But then, they do say history is written by the victors😉

You're right about parachutes which is probably even more reason why we were in dire straights in the years leading up to 2009. If we play "if it wasn't for" then those loans I mentioned are definitely up there with Bowkett's rescheduling of debts. 

Am I right that the 'securitisation' from AXA was based on future season ticket sales?

Yes, the securitisation position is neatly summarised in the 2003 accounts, if anyone is interested, by Shaun O’Hara and explains how the debt was secured against future revenue streams. There’s also further explanation under Note 17 of the accounts.

[Mello Yello 2,289]

So in 2009 the inside walls in the NCFC Boardroom didn't smell of stale urine - and we weren't as a club at anytime sailing close to administration and it was never the NCFC Boards last chance saloon....We probably just had a bit of a short term cash-flow misunderstanding that was soon rectified by the astuteness and brilliant business nous of Mr Bowkett.....

I don't actually see what all this financial fuss is about?.....

 

[Graham Paddons Beard 2,429]

🎶They say our love won’t pay the rent 🎶

[PurpleCanary 5,557]

On 13/08/2020 at 12:17, PurpleCanary said:

My internet up the spout at the moment. More might follow if I ever get properly connected again...😘

Written one thousand words of deathless prose on subject but luckily for you all am unable to post it

[Barbe bleu 822]

Lots of big words being used ( I looked up plenipotentiary) but for the simple of mind can the 2009 situation be summarised as follows:

We got relegated and it was assessed that it was almost certain that our income for the coming year would not meet our obligations unless some of these could be deferred.  The solution was that Mr Bowcett phoned the bank and asked if they would allow us a payment holiday on loans. They agreed.

?

Edited August 15, 2020 by Barbe bleu

[Barbe bleu 822]

1 hour ago, Barbe bleu said:

 

 

Edited August 15, 2020 by Barbe bleu
Duplicate

[nutty nigel 7,527]

46 minutes ago, Barbe bleu said:

Lots of big words being used ( I looked up plenipotentiary) but for the simple of mind can the 2009 situation be summarised as follows:

We got relegated and it was assessed that it was almost certain that our income for the coming year would not meet our obligations unless some of these could be deferred.  The solution was that Mr Bowcett phoned the bank and asked if they would allow us a payment holiday on loans. They agreed.

?

Oh my...

Good job you're not nutty🙃 I mean the poster nutty not nutty nutty, which I'm sure you're not either🙃

Anyways...

Good luck🤞🍀🙃

[nutty nigel 7,527]

1 hour ago, PurpleCanary said:

Written one thousand words of deathless prose on subject but luckily for you all am unable to post it

Why can't you?

I'd be interested to see it.

[nutty nigel 7,527]

3 hours ago, GMF said:

Yes, the securitisation position is neatly summarised in the 2003 accounts, if anyone is interested, by Shaun O’Hara and explains how the debt was secured against future revenue streams. There’s also further explanation under Note 17 of the accounts.

So the fans really were the true savory saveloys as they continued to buy season tickets in record numbers throughout the years of crisis?🙃

Or perhaps Gunny was when he bought Grant Holt....

 

[GMF 736]

1 hour ago, nutty nigel said:

So the fans really were the true savory saveloys as they continued to buy season tickets in record numbers throughout the years of crisis?🙃

Or perhaps Gunny was when he bought Grant Holt....

 

It was certainly the main factor enabling the Club to raise £15m in the first instance. Although, ultimately, it was promotion to the Premier League, together with staying up for a season, which enabled us to clear the original debt with the next season’s PL monies, as required by the lenders when the loan was extended following our cash flow crisis in 2009 / 2010.
 

As is often the case, there’s more than one factor in play 😉

[TIL 1010 4,737]

15 hours ago, Mello Yello said:

Didn't that unassuming benevolent local Norfolk businessman who thankfully paid Darren Huckerby's wages in 2003/4 also make a substantial financial contribution to NCFC during October of our 2008 season? A significant contribution that allowed Reading's Leroy Lita to come to us on an initial months loan - and which was then extended for a further six games into early 2009?.....Things financially at our club during that time must have been a bit tight?.....Although thanks again, to our unsung benevolent bail-out hero 'Moore the Merrier'...

Leroy eventually scored 7 goals and was actually our season's leading scorer, but unfortunately we were still relegated in 2009.....

 

Carl Moore.

[PurpleCanary 5,557]

This question, of how close we may have been to administration, comes up every so often. This is my view (apologies for the length) for what that is worth.

In my supporting life there have been four times when there have been significant financial problems – in 1957, 1996, 2009/10, and in 2018.

In each case there is no doubt who has to be blamed - it was whoever was in charge of the club at the time. There may be any number of extenuating circumstances but (apart from with Donald Trump…) the buck stops at the top, and bear in mind that this heavy-handed rule applies to the credit for success too. I think James Hanly, who had been a director since 1946, was chairman in 1957, so him, if so, and then Chase, and then Smith and Jones, and again Smith and Jones.

This general point was bluntly made by Bowkett in that open letter the day after relegation back in 2009 when he said there was no director with the required level of skill, leadership or vision. ‘’The board does not have these attributes.’’ So that included S&J, since they were on the board, and even if it was argued that they were non-executive directors they were still the people who picked the executives. And that applies at all times.

Bowkett was being disingenuous when, having become chairman, he claimed his attack was aimed only at Doncaster and Munby. In his position then, inside the tent as opposed to outside, he had to say that, but it wasn’t really credible. After all, who had chosen and then kept faith in Doncaster and Munby? And later kept faith in McNally?

At the time all these four problems  were serious, even if to compare the detail across the decades becomes surreal. In 1957 the club was in danger of ruin because it couldn’t meet a £500 wage bill. Sixty years later it needed to find £20m or so.

In assessing which were the most serious, and when we were closest to administration or financial meltdown, a sceptical view needs to be taken of whatever gets said from inside the club, and particularly if coming from a new broom. It is standard practice not just in football but in business generally and in politics for the incoming administration to exaggerate the scale of the mess left behind for them to clear up.

And often the possibility of administration is held out, based on an ‘if this happens and that happens…’ scenario. The question is actually how likely in the real world is or was that ‘if’ scenario. My rule of thumb is to go by the immediacy of the problem, by the ease or difficulty, ie the comparative painlessness or the depth of the savagery, of the solution, and by the consequences. What happened rather than what could have happened.

In 1957 the club spent £9,000 on floodlights it couldn’t afford while stuck at the bottom of Division Three South and found it was unable to cover that immediate £500 shortfall, while forecasting liabilities for the year of what in those days was the massive amount of £20,000.

Disaster - liquidation was mooted as a possibility before being dismissed as too draconian - was only staved off in the short-term by Eastern Counties Newspapers coughing up the £500 and then by a desperate public appeal (including money being thrown into a blanket taken round the ground) which eventually raised £25,000, followed by an influx of new directors, beginning the Watling era, with him as chairman, and later on the South era.

The club still finished bottom but the total  overhaul helped convince the league not to vote us out. For those youngsters unfamiliar with the system then, the bottom club in each of the two regional Division Threes had to apply to stay in. Usually the vote of the other clubs went their way, but it wasn’t always the case, if the club looked like a basket case.

On to March 1996. The club was in footballing decline in the second tier while having, as one official put it, ‘’the expenditure of Inter Milan and the income of Southend.’’ The debt was reported to be somewhere between £5m and £8m, and Chase was presented by the bank with an immediate ultimatum that prompted the £2.2m firesale of key players Newsome and Ward (note to Highland Canary – now THAT is a firesale) from a team in some relegation trouble in the second tier.

But according to incoming chief executive Gordon Bennett (while bearing in mind scepticism about new-broom comments it roughly fits the facts) ‘’that hardly bought us a month’s grace.’’ Chase was forced out and there was a complete change of leadership and ownership, leading to the Smith and Jones era, but Bennett still had to reduce the debt, which necessitated staff cuts and slashing back the youth scouting programme. Relegation was avoided but the club spent eight more seasons in that division.

The impression is that sooner or later debt would bring Chase’s club low. As Bowkett said in 2009: ‘’I remember when I ran Boulton & Paul and Robert Chase was still running the football club he was coming round trying to borrow money then, 1984, so that’s 30 years we’ve been running with debt.”

Which brings us to the problematic saga of 2009/10, which is complicated by chronology in terms of assessing the part played by Smith & Jones. To an extent the story is simple. As Parma and GMF and others have said, the club had got into a financial mess, seemingly on a downward slope with relegation to the third tier, and unable to fulfil its banking covenants (I originally typed ‘baking’ and was tempted not to alter it…the Great Norwich City Baking Covenant).

It could not meet its payments on the loans it had from Axa and Bank of Scotland, which in main had been taken out to finance the forced (for safety reasons) rebuilding of the South Stand. If the club had kept the capacity at 4,000 capacity the debt would have been less, but the decision to double (as against the other even more costly alternative of trebling) has certainly been justified in the long run by attendances and finance.

There is no doubt the position was serious and needed action. So in came Bowkett, who by all accounts straight away negotiated a payment holiday to give the club some breathing space (although as I read the accounts for 2009 our lenders may – the wording is unclear - have already indicated a willingness to agree to such).

And McNally arrived, not only to be the football man on the board but to institute a significant cost-cutting exercise. Which had its casualties in human terms. The number of staff fell from 210 in 2008 to 181 in 2010, at which point the figure stabilised and then started to rise again.

And at a lower level, if I have the story correct (apologies in advance if not) the well-regarded Friends of Norwich City FC Youth (Foncy) had to disband. As I understand it Foncy had been allowed free use of some of the club’s services and facilities (including mailing?) but that practice was stopped, making its operation prohibitively expensive. I have a copy of Foncy’s accounts for the year ending September 2010 and they do show some significant additional bureaucratic expenses that had not been incurred the year before.

Once the lenders were satisfied we had upgraded the level of expertise in the boardroom and added a very public willingness to be brutal (as Foncy might attest to) they seemed comparatively relaxed about our situation, since the overall rescheduling deal was not finalised until November 29, 2010, a full year and a half after Bowkett and McNally had been appointed. Indeed, the deal was so flexible that if we had never since been promoted to the Premier League we would now still be having a year or so in which to pay Axa off.

By comparison, thanks to a list helpfully provided by TvB, we see that other lenders were much less relaxed, as several other clubs around that time did fall into administration. I don’t know the circumstances in all those cases, but it is a fair assumption the various lenders had much less faith in those clubs being able to solve their problems, because of serial offending perhaps, or a lack of willingness to change, than they had with us.

The chronology matters, at least a bit, because of the question of whether change (and particularly the arrival of Bowkett) was summarily forced by the lenders on S&J, which many believe, or whether they had already decided to act accordingly.

We were relegated on May 3 2009, the next day the Bowkett open letter attacking the current board and calling for change was published, and on May 12 the ousting of Munby, who was ill, and Doncaster was announced. On Roy Hodgson’s recommendation McNally arrived as CEO at the start of June, and Bowkett was unveiled as chairman on July 2.

I don’t believe the oustings were prompted by Bowkett’s letter but had been decided beforehand (and perhaps even if we had avoided relegation), not least because I knew several days before they were announced - so within only two or three days of Bowkett’s letter - that there would be boardroom changes, although not precisely what.

As it happens they included creating a vacancy for a chairman. And as Bowkett later said, S&J spent a considerable amount of time trying to persuade him to take the job. Since he joined the board only about eight weeks after the open letter, these entreaties probably started very soon afterwards.

(The question of whether S&J ought to have tried much earlier - assuming they hadn’t - to get Bowkett on board is interesting. As other posters have said, they certainly should have done. One tantalising hint of an explanation Bowkett provided for them not having done so was that he was thought to be in cahoots with Cullum. Given the correctly negative opinion the owners came to have of Cullum I can see why they might have shunned Bowkett. That said, it was an odd act for Bowkett to write such a scathing public denunciation, no matter how accurate, and an analysis of what needed to be done, which looked very much like getting someone with his qualifications to be a director, but conclude by saying he was not seeking to help put matters right).

Leaving the specific question of Bowkett aside, it is not possible to be sure about this but on balance my view is that S&J, who - as someone who knew from experience what they were talking about once said - can also be brutal when necessary, had planned to wield the axe anyway.

In terms of the outcome it doesn’t matter. Either way, Bowkett and McNally rode over the hill to come to the rescue of the beleaguered wagon train, but it is relevant in terms of assessing S&J’s role, and whether they were helpless or proactive. Or somewhere in between.

Finally 2018 and the £20m gap plugged by the sale of Madison. Arguably there was a casualty here, before the event, and it was McNally, on the basis that it was his mistakes a few years earlier in the transfer windows that at least exacerbated the financial problems.

It is easy to blame him, but ultimately the culprits were S&J for having kept him on, as they had done with Doncaster. Odd how both those CEOs had near-identical career trajectories of success and then failure. But otherwise there was no boardroom bloodletting – rather a switch to a more modern type of management structure - and no change of control.

And the financial problem was solved by…by how the club had been run for many years. We had a player to sell for a large amount of money because we had spent a lot of money to develop a category one academy to help produce our own young talent and to hone the young talent bought from other clubs. Luck had nothing to do with having the solution of having Madison to sell.

Nutty, not for the first time, has neatly skewered an argument here, in this case by asking why it is that fans judge Norwich City not on what happened and what the situation was  but what might have happened and what the situation might have been, while never applying that alternative-universe test to other clubs, and this is relevant here not just to the Madison sale.

Looking at the reality, as against any feared worst-case scenarios, then in terms of proximity to disaster, based on the immediacy of the crises, the severity of the solutions, and the consequences, I believe 1957 has to be the worst, and 1996 a close second. With both there was an immediate demand for debts to be paid, followed by an urgent need to pay off more of the same, and an epochal change of leadership/ownership.

For me 2009/10 rates as less dangerously close, especially when contrasted with what happened to other clubs then. This is not to downplay the size of the problem or the serious consequences, and particularly the staff job losses, and there were board sackings.

But there was no change of ownership, and the breach of the banking covenants, while theoretically disastrous, seems actually not to have had any adverse consequences, because unlike 1957 and 1996, when there was an immediate final demand for cash, we had the nice opposite of a payment holiday, followed by a very manageable restructuring. The club was shaken up but not drastically altered in the way it had been before.

And with the Madison scenario the club seems to have been further away from a real problem. An analogy might be that the British Royal family would be in danger of going bankrupt if the country turned republican, if only it hadn’t had the foresight to amass the world’s largest private collection of great art to sell off…

 

[Parma Ham's gone mouldy 2,219]

Purple, why did Bowkett write the letter?

Parma 

[PurpleCanary 5,557]

4 hours ago, Parma Ham's gone mouldy said:

Purple, why did Bowkett write the letter?

Parma 

Parma, going by the last few paragraphs, which are very clear and leave no room for doubt, I assume the intention, the desired outcome, was as stated - to pressure Smith and Jones into significantly upgrading the executive directors.

As to why a public letter, and why then, and what effect Bowkett and Bertram imagined it would have, I have wondered about that, and thought about speculating further than I did, but the post was already 2,300 words long.

Although the letter is addressed to Munby and in effect Doncaster, calling on them to resign, the inference is not only that they will not resign but that neither will they be sacked by S&J, at least not straight away, because B&B foresee the need to  create ‘a sufficient groundswell of public opinion that will be resolute, indefatigable and irresistible’. Really the message is for the owners.

Otherwise I have only idle musings. Whether that message was also a come-and-get-me plea by Bowkett I don’t know. What to make of ‘For the avoidance of doubt neither of us seeks to join the board.’ Was that meant at the time? Had Bowkett been contacted by the lenders or was this entirely his and Bertram’s idea?

[Indy 3,297]

Purple, there’s no mention of the LS land, I’m sure the sale of land purchases by Chase for our club helped to finance the South Stand too?

As for Bowkett’s appointment, imagine if he’d said no......The creditors weren’t going to make any deals with the board without him!

But a great read and thanks for putting in the time.👍🍻

Edited August 25, 2020 by Indy

[nutty nigel 7,527]

Imagine if...

Just sayin'🙃

[Parma Ham's gone mouldy 2,219]

1 hour ago, PurpleCanary said:

Although the letter is addressed to Munby and in effect Doncaster, calling on them to resign, the inference is not only that they will not resign but that neither will they be sacked by S&J, at least not straight away, because B&B foresee the need to  create ‘a sufficient groundswell of public opinion that will be resolute, indefatigable and irresistible’. Really the message is for the owners.

Why would that be the case?

Parma

Edited August 25, 2020 by Parma Ham's gone mouldy

[TIL 1010 4,737]

I recall that the letter sent by Bowkett and Bertram who i believe were Chair and Vice Chair of the Associate Directors as a result of a number of rebuffs they had from the club directors offering their business expertise to help the board through those difficult days of 2009 and the years leading up to it.

Edited August 25, 2020 by TIL 1010

[PurpleCanary 5,557]

1 hour ago, Indy said:

Purple, there’s no mention of the LS land, I’m sure the sale of land purchases by Chase for our club helped to finance the South Stand too?

As for Bowkett’s appointment, imagine if he’d said no......The creditors weren’t going to make any deals with the board without him!

But a great read and thanks for putting in the time.👍🍻

You're right, Indy, and I forgot to mention the bill for tea and cakes at the Criterion Café back in 1902...🤓

[Indy 3,297]

18 minutes ago, PurpleCanary said:

You're right, Indy, and I forgot to mention the bill for tea and cakes at the Criterion Café back in 1902...🤓

But wasn’t that land purchase part of the reason we had bigger debts in 1996? Wasn’t it purchased for around 1.5 million back in the day for it to be sold at massive profits by our current owners? Think it’s a big part of the 1996 debts and story, might be totally wrong.

[TIL 1010 4,737]

4 minutes ago, Indy said:

But wasn’t that land purchase part of the reason we had bigger debts in 1996? Wasn’t it purchased for around 1.5 million back in the day for it to be sold at massive profits by our current owners? Think it’s a big part of the 1996 debts and story, might be totally wrong.

 Chase had purchased the land by taking out unsecured loans which could not be serviced and the problems arose when the bank came looking for their money.

[Indy 3,297]

5 minutes ago, TIL 1010 said:

 Chase had purchased the land by taking out unsecured loans which could not be serviced and the problems arose when the bank came looking for their money.

Thanks Til, as I remember, so it was certainly a contribution to our financial crises in 1996 yet beneficial to club years later.?

Edited August 25, 2020 by Indy

[PurpleCanary 5,557]

26 minutes ago, Indy said:

But wasn’t that land purchase part of the reason we had bigger debts in 1996? Wasn’t it purchased for around 1.5 million back in the day for it to be sold at massive profits by our current owners? Think it’s a big part of the 1996 debts and story, might be totally wrong.

Indy, I was making the gentle point that I'd already written 2,300 words and perhaps it was time to call a halt, even if some details got left out.🤩