Here Are The Accounts.

[Indy 3,310]

3 minutes ago, nutty nigel said:

But didn't Bowkett do the same? I seem to remember we spent massive fees on RVW, Hooper, Naismith and Klose. Got relegated twice from the prem. I don't think we recouped anything from the players mentioned. Then put stadium improvements and Colney improvements back on hold.

To properly evaluate our recent history people should stop using personalities they like or dislike as a starting point.

I thought you blamed McNally for that?

The reality is they’re always going to be the benchmark of past standards! McNally & Webber are two that point towards the fact that every position of power needs to be refreshed at a point of failure! So to learn from both means if we go up under Knapper and fail by being relegated then that’s the time to cut loose and change up! As keeping the faith appears to generate poor position! So to move forwards we need to be more decisive at the point of failure!

Edited November 4, 2023 by Indy

[PurpleCanary 5,578]

1 hour ago, BigFish said:

That is certainly a different strategy. Although the likely outcome is that we were only able to afford 1/2 additions, you would have gone mad on here about a lack of ambition and we got relegated anyway.

This is a thread about finances, subjective alternate histories really don't add value.

We would have had £20m to spend instead of £50m+. And even if we had spent that £20m wisely - on say, a Skipp replacement and a central defender - it would have left us with plainly substandard players in other key positions. And horribly exposed to even a normal run of injuries, suspensions and loss of form.

Edited November 4, 2023 by PurpleCanary

[nutty nigel 7,560]

8 minutes ago, Indy said:

I thought you blamed McNally for that?

I didn't blame anyone. Even you thought Naismith was a good signing.

But the point I was making is if you look back it's of no value to start with the personalities involved. 

 

Edited November 4, 2023 by nutty nigel

[shefcanary 2,437]

1 hour ago, Dean Coneys boots said:

These accounts tell me we have zero chance of retaining sarge Sara and probably Gunn too. It says we will again be scraping round the bargain bucket in the windows. It says we cannot compete and that all calls for new ownership in recent years had merit. 

I'm not as negative as that, selling them wouldn't be part of Attanassio's great plan (see Parma's most recent thoughts). However they'll probably depart for greener fields, as current form here is so bad.

[nutty nigel 7,560]

25 minutes ago, Indy said:

I thought you blamed McNally for that?

The reality is they’re always going to be the benchmark of past standards! McNally & Webber are two that point towards the fact that every position of power needs to be refreshed at a point of failure! So to learn from both means if we go up under Knapper and fail by being relegated then that’s the time to cut loose and change up! As keeping the faith appears to generate poor position! So to move forwards we need to be more decisive at the point of failure!

Maybe. But it's not straightforward the old promotion and relegation malarkey. It all comes as a package now and the decisions you make upon promotion impact the next 2/3 seasons.

Then you find a black swan floating gracefully into the mix..

 

Edited November 4, 2023 by nutty nigel

[BigFish 1,988]

22 minutes ago, PurpleCanary said:

We would have had £20m to spend instead of £50m+. And even if we had spent that £20m wisely - on say, a Skipp replacement and a central defender - it would have left us with plainly substandard players in other key positions. And horribly exposed to even a normal run of injuries, suspensions and loss of form.

Probably even less than that, a payrise for Buendia & £17.5m for Ajer just about cleans us out in this alternate history. And still no replacement for Skipp.

[wcorkcanary 4,336]

2 hours ago, komakino said:

The cynic is me would suggest that one of the reasons why Delia/MWJ don't like the EPL is that is shows how out of depth they are financially. Therefore 'bobbing along' in The Championship suits them better as getting promoted and trying to stay causes more problems once relegation happens. 

I just hope these set of accounts shows everybody once and for all that the club isn't partially well run. I trust and believe things will get better once MA is in majority control and the club ceases to be a loss making social club for the recent majority shareholders. 

You forgot Train set. 

[Monty13 2,241]

2 hours ago, hogesar said:

I dont think anyone has ever questioned that we failed at Prem level and that is ultimately on our SD and board.

But there has to be an understanding of how hard it is to be successful with our financial outlay. There's only a small handful of examples of where it's worked at other clubs with similar money.

We didn’t just fail at PL level though did we?

We had an ambition to be a top 26 club and we were achieving it and progressing as a club.

Two Championship title wins, the most valuable squad we’ve likely ever had in the modern era, secure finances, an attractive and recognisable playing style, a good manager, improving facilities etc. etc.

Maintaining a cycle of winning the Championship (or promotion) would have been incredibly hard, achieving PL safety even more so. However how far we’ve fallen so quickly is not understandable IMO.

[wcorkcanary 4,336]

26 minutes ago, nutty nigel said:

Maybe. But it's not straightforward the old promotion and relegation malarkey. It all comes as a package now and the decisions you make upon promotion impact the next 2/3 seasons.

Then you find a black swan floating gracefully into the mix..

 

I'm confused , is a black swan a good thing or not, sounds  ominous, but is it benign or malignant? 

[nutty nigel 7,560]

2 minutes ago, wcorkcanary said:

You forgot Train set. 

I needed that for 'all four corners'.

[nutty nigel 7,560]

4 minutes ago, wcorkcanary said:

I'm confused , is a black swan a good thing or not, sounds  ominous, but is it benign or malignant? 

I'm very lucky to have a wealth of knowledge in our team of PUPs. Months ago @Parma Ham's gone mouldy explained to me that black swan events are basically once in a generation happenings that can severely impact finances. I believe in the last few years there have been three. COVID, Brexit and the war in Ukraine.

Edited November 4, 2023 by nutty nigel

[essex canary 504]

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

Further to this excellent work @essex canary wouldn’t it be interesting to have a comparative figure showing the value of the ‘playing roster’ (as Attanasio would have it).

This would be a highly salient figure compared over a five year period - and one of course that I am quite sure the legions of forecasters at Norwich have a detailed version of.

My point is this: if you are Attanasio and you arrived with a playing roster valued at £100m. Then you agreed the heads of your deal. Then ones Sporting Director had an active period of trading (at a time when he was considered for Chelsea allegedly), then sporting decline ensued. 

Perhaps unavoidable, perhaps nobody’s fault. Though jet’s imagine that the playing roster is now worth £50m.

Doesn’t that rather materially change your position? Your purchase parameters?

Equally might you feel that the seller had ‘hollowed out’ the offer a bit?

That a seller was ‘running lean’ …reducing significantly the ‘stocks’? The players are where the easy liquid money is. 

You can make the company look nice and profitable, you can run smaller squads, you can sell off the shiniest family silver. It’s all fine provided the activities of the business are not too negatively impacted..

The rolling figure of stock value (playing roster) has surely dropped significantly to the point we are at now. Thus your cost of your impending investment - and your upside of promotion - just got longer and harder.

As a seller you might say this was all part of natural, normal, cost-cutting exercises, though lots of old players on frees? Is that what we’ve always done under Webber? What stock value do they now have?

Maybe we’ve shafted old Attanasio. We’ve also sadly shafted our sporting competitiveness, plus we have pretty limited family silver to liquidate in future. 

A fair judge of a sporting Director and club is to assess the playing roster value over a reasonable period. The club will do this internally. 

If you have hollowed your stock value out (say) 50% - and you have no new stadium, nor any meaningful trade for your silver sales - what have you achieved?

Parma 

There is a kind of squad valuation on the Balance Sheet being the Intangible Assets entry of £38 million at 30 June. In essence it isn't squad valuation but the value of transfers fees paid adjusted for the element considered to have been used (amortisation). In reality our squad value is likely to be greater than that as we have subsequently realised £21 million and have 5 further players potentially sellable for significant fees. That is again good news.

Transfer fees are largely associated only to top division football. Consider that Blackburn's entry on their last set of Accounts was less than £3 million. Perhaps that reinforces that there is a way forward. That way forward is likely to involve less player speculation and churn, remaining competitive as we have the wherewithal to do and hoping and/or planning to uncover the next Buendia but without trying to over plan it.

[essex canary 504]

1 hour ago, nutty nigel said:

But didn't Bowkett do the same? I seem to remember we spent massive fees on RVW, Hooper, Naismith and Klose. Got relegated twice from the prem. I don't think we recouped anything from the players mentioned. Then put stadium improvements and Colney improvements back on hold.

To properly evaluate our recent history people should stop using personalities they like or dislike as a starting point.

Yes. I thought Bowkett and McNally did well in the early years not in the latter ones. It is 10 years back since we did really well.

[norfolkngood 1,087]

13 minutes ago, Monty13 said:

We didn’t just fail at PL level though did we?

We had an ambition to be a top 26 club and we were achieving it and progressing as a club.

Two Championship title wins, the most valuable squad we’ve likely ever had in the modern era, secure finances, an attractive and recognisable playing style, a good manager, improving facilities etc. etc.

Maintaining a cycle of winning the Championship (or promotion) would have been incredibly hard, achieving PL safety even more so. However how far we’ve fallen so quickly is not understandable IMO.

that's the bit i do not understand we were doing the top 26 and like you said had players to sell and Finances we good ,

the plan was self funding never to put the club at risk ,

we achieved so much doing that plan 

we are in a much worse place now and it will cost MA a lot of time and money to put right 

[wcorkcanary 4,336]

11 minutes ago, nutty nigel said:

I'm very lucky to have a wealth of knowledge in our team of PUPs. Months ago @Parma Ham's gone mouldy explained to me that black swan events are basically once in a generation happenings that can severely impact finances. I believe in the last few years there have been three. COVID, Brexit and the war in Ukraine.

Ah ok , so, it's idiot humans messing everything up again. Lovely , as long as its not ' the wrong kind of snow' or ' leaves on the track' I can believe it.  

[nutty nigel 7,560]

2 minutes ago, wcorkcanary said:

Ah ok , so, it's idiot humans messing everything up again. Lovely , as long as its not ' the wrong kind of snow' or ' leaves on the track' I can believe it.  

If it was snow related it would be white swan. Marc Bolan rode one.

 

Edited November 4, 2023 by nutty nigel
🦢

[wcorkcanary 4,336]

Just now, nutty nigel said:

If it was snow related it would be white swan. Marc Bolan rode one.

 

Played that at my wife's funeral . Beautiful song.

[Indy 3,310]

This threads is like a Cantona interview! When the black swan follows the snow, the ducks are cold! 

[king canary 7,651]

4 hours ago, PurpleCanary said:

Yes, for season after season you could hardly move on this message-board for calls for "a calculated risk/gamble". Which meant spending money we didn't have. Eventually the board - quite independently - went and did that, and now you can't move for posts (probably in some cases from the same people) bemoaning our resultant financial troubles...😍

I'm one of those who talked about a calculated risk.

I'll caveat that by saying my issue was that our lack of money prevented us from doing that as mistakes would cost us more than most, and so it's come to prove.

I imagine the owners took said risk due to an outsized believe in Webber and these accounts lay bare just how terrible a job he did/has done of late. Of the players signed that summer we might make a profit on one (Sargent). That's very much the worst case scenario of a transfer window for us. Even that awful summer under Hughton bought us Redmond, Fer and Olsson all were sold for profits and Hooper recovered most of his fee. 

I'll stand by my thoughts though that if, in premier league footballing terms, this relatively small gamble has forced our owners to change their plans then it shows they aren't unfortunately equipped to own a football club in this era.

[PurpleCanary 5,578]

28 minutes ago, nutty nigel said:

I'm very lucky to have a wealth of knowledge in our team of PUPs. Months ago @Parma Ham's gone mouldy explained to me that black swan events are basically once in a generation happenings that can severely impact finances. I believe in the last few years there have been three. COVID, Brexit and the war in Ukraine.

Did Parma explain that if you tie a dead cat to a black swan you get a market-mystifying swan dive and a dead cat bounce?🤩

[Badger 2,407]

Apparently £70 million is a small gamble! How much should we have borrowed - nobody ever say how much is enough.

[Badger 2,407]

2 minutes ago, PurpleCanary said:

Did Parma explain that if you tie a dead cat to a black swan you get a market-mystifying swan dive and a dead cat bounce?🤩

But not in a bull market.

[nutty nigel 7,560]

8 minutes ago, PurpleCanary said:

Did Parma explain that if you tie a dead cat to a black swan you get a market-mystifying swan dive and a dead cat bounce?🤩

Nutty says...

Never enter a rat race without having plenty in your piggy bank.

[MrBunce 245]

A mixed bag of results (same as last year). Let's deal with what seem to be the four big issues: (i) revenue; (ii) costs; (iii) the debt; and (iv) 'investment' in the playing squad. 

TL:DR: Revenue down due to TV £, other money stable, low growth. Wages down a lot, but still too much. More cost cutting coming. Debt nearly £100m, its a lot and will need refinancing or money borrowing. Cost of squad peaked, less money to be invested in future, club reliant on player sales to keep lights on.

Revenue

Headline revenue fell from £134m in 2022 to £75m in 2023(i.e. nearly £60m). £54m of that fall is due to broadcasting revenue falling. The remainder from commercial income falling (principally catering: £6.1m to £4.2m and sponsorship and advertising: £7.4m to £4.3m).

The revenue of the club is dominated by broadcasting revenues (76% in 2022, 64% in 2023). Try as they might, the club just can't seem to get big growth out of the other revenue generators.

Gate receipts were £10m (only slightly down on the last prem season). However, they are marginally lower than the amount generated in 2015 (£10.7m). The options to improve this are limited: (ruinously?) expensive ground expansion and/or increase in ticket prices (in a cost of living crisis).

Things aren't much better on the commercial front, though there is some growth. Commercial income was £17m, down from £21m. This is up from around £13m in 2015. But it's small growth. Catering income was £4.2m which is around the last 15 year average. Commercial and Sponsorship & Advertising clocked in together at £9.6m, this compares to £8.5m in 2019 (1st Farke promotion season). 

Overall, I would say, slightly disappointing. It's good that the club have managed to keep non-broadcast revenues steady post relegation. However, the club continue to do a lacklustre job in growing that revenue.

Costs

Staff costs more than halved from £118m in the prem to £56m. This is impressive cost control. However, two qualifications. First is that the £118m can only be described (fairly!) as a calamitous overspend. The second is that a significant portion of that seasons wage bill would have been to the four loan players signed that season (Gilmour, Kabak, Williams, Normann).

Other employment costs which includes loan player fees was down from an eye-watering £15m to £2m. This would include the fees for Ramsey, Hayden and Marquinhos. I would assume it would also likely include the compensation (if any) to Dean Smith and his staff (the club have not set out compensation amounts for many years now). So in all, this should be seen as a good result.

Amortisation was steady at £23m and likely reflects a peak as the cost of the playing squad is likely to fall over the next year or two.

Staff costs as a percentage of revenue was down from 88% to 75% which is a positive. However, staff costs plus amortisation (a proxy for the total cost of assembling a squad and putting them on the pitch) was once again above 100% (i.e. it cost more to acquire and pay wages than the club brings in). It's above 100% for the third year in a row and fourth time in five years. It highlights again that club is heavily reliant on player trading to balance the books (or not)...

Debt

By my calculations net debt stands at a whopping £94m up from £65m. One of the key questions in the Attanasio thread was whether the money he's put in was to refinance the parachute payment loans or not. The answer is clearly that it was to plug the gap in last years' finances. As at June 2023, the club had borrowed £36.6m in loans plus the £10m from the C Preference shares. On top of this is the £45m in secured loans (on the parachute payments and transfer fees due). In pure cash terms, the club paid out £5m in net interest last year (£6m on an accounting basis). That is a lot, over £100k a week and roughly 8% of revenue.

I would agree with other posters that the disclosures around the loans from Mr Attanasio are inadequate. From what I've pieced together from various sources these loans predominantly accrue interest at 11% and were due for repayment between June 2023 and February 2024. It would seem likely the club will need to refinance all or part of these loans this season, which may incur further costs and result in even higher interest payments.

On a much smaller note, Delia and Wynn Jones loaned the club c.£900k, the purpose of this loan is not disclosed.

Investment in the squad

The total cost of the playing squad stood at £90m in June 2023. As noted above, this likely reflects a high point and subsequent sales (principally Rashica) will see that figure fall. For the first time in many years (since 2018) the club have reported transfer fees received post-year end (for Omobamidele, Aarons, Raschica and Mumba). These total £21.4m. I can't help but feel the club may have been pushed to include this disclosure again given that (as mentioned above) the club will have to sell players in order to keep the lights on.

Last year the club spent £15m on Sara and Nunez. For this season, the club spent £3.4m (with potential add-ons of £2.4m). That would seem to be mostly for Fassnacht (c.£3m) and a small amount for Fisher. The other transfers being reported as freebies.

The club is on the hook for potentially up to £65m in add-ons if conditions are met. However, on the pitch performance would suggest most of this is unlikely to happen.

A short word on the strategic report

As a chartered accountant, I put little value on the strategic reports that accompany financials as they are usually fluff. However, I wanted to draw attention to and comment on the 'club model' on page 14. This shows a 'virtuous circle', clockwise from top left: better on-pitch performance > enhance[d] club and player profile > increase in player and commercial revenues > increase investment in people and facilities > increase player productivity > develop higher quality players and back around. 

When things are going well the perhaps this model works. But as the wise Ricardo will tell you, the fortune of all football clubs rise and fall. Norwich is a club which over the past two years is on the fall. 

And so the 'virtuous circle' can become a vicious one. Worse on-pitch performance has led to reduced club and player profile this has led to a reduction in player values (think Aarons, Cantwell etc.) and commercial revenues (see above). This will, aside from bringing the beggar bowl to Mr Attanasio a reduction in the amount the club can invest in people and facilities. That may then reduce player productivity and the ability to develop quality players. 

I'm not saying the model is broken. What I will say is that all strategic models need to have contingencies for when things go wrong. The club will need to adapt to its new position (from a club on the rise to a club on the mend). Being somewhat churlish, the club really need to stop wasting time and get on with things.

[Monty13 2,241]

1 hour ago, PurpleCanary said:

We would have had £20m to spend instead of £50m+. And even if we had spent that £20m wisely - on say, a Skipp replacement and a central defender - it would have left us with plainly substandard players in other key positions. And horribly exposed to even a normal run of injuries, suspensions and loss of form.

Would you honestly have swapped Buendia for Sargent, Tzolis and Rashica?

We had substandard players in almost every position, it’s the PL. We sold the best one of maybe only 2-3 PL quality players we had and didn’t bring in a single one of PL quality (at least to play the way we did).

20 million spent on a Skipp replacement and a CD, some frees and loans is exactly what we should have done IMO and sold Buendia the following season.

Lets not try and justify what many in the footballing world said was madness and has since proven to be.

[nutty nigel 7,560]

Thank you @MrBunce Been waiting for that. You're a star.

Edited November 4, 2023 by nutty nigel

[Sufyellow 222]

3 hours ago, hogesar said:

I dont think anyone has ever questioned that we failed at Prem level and that is ultimately on our SD and board.

But there has to be an understanding of how hard it is to be successful with our financial outlay. There's only a small handful of examples of where it's worked at other clubs with similar money.

So I go back to why did he sack Farke and his coaching staff? Webber obviously thought he had bought good players , he failed badly, and blew everything that we had been building,  he should of went then . 

[paddycanary 539]

So to summarise, is the club currently in the hole for about £65m?

I am not a chartered accountant.

[MrBunce 245]

5 minutes ago, paddycanary said:

So to summarise, is the club currently in the hole for about £65m?

I am not a chartered accountant.

More like £95m. £80m of that is due to be repaid this season. Some of that will be repaid from parachute payments and transfer fees. Some will need to be refinanced at potentially higher interest rates.

Edited November 4, 2023 by MrBunce

[Sufyellow 222]

3 hours ago, BigFish said:

Sorry, what?? Don't we effectively have new ownership? Nothing changed? Well then perhaps ownership isn't the root cause of all this.

No , we don't have new ownership do we. So far they have zero input and the same people running the club . Oh and Delia gets the final say.