Here Are The Accounts.

[shefcanary 2,439]

Thanks to Mr Bunce and his analysis of the accounts. I also am glad he has the same concerns over the accounts' detail on to the club's borrowings that I did. Chicken's statement that you can potentially get enough information from other sources is I would argue only partially true, there has never been a clear statement over the loans secured against the parachute payments / media rights (who from / how much / when from / when to / what purpose / whether secured / the interest rate payable / special conditions- all normal disclosures you'd see in any other company accounts).

However the big question is how the hell is the club going to repay the £94m? Well, the post balance sheet activity note and other information in the accounts does give a clue. I also assume that the club will pursue a balanced budget appraoch in the short term at an operating level (the club just about managed it in the past year with only a small(ish) £1.5m loss.

The summer transfer dealings will have generated c. net £17m to knock off that figure. Then the £31m of media rights income will repay a further tranche of that borrowing. This leaves c.£46m, the majority of which is owed to Norfolk / Attanasio, which will grow due to interest on the loans themselves! 

Now it is possible that current squad assets like Rowe, Sara & Sargent could be sold to generate cash to cover a large proportion of this remaining debt, but the squad would be so poor as a result this surely would be self defeating. But ultimately it may be the only way of controlling the level of debt.

I hypothesised, and others concured with me on the Attanasio thread, that Attanasio's debt will be cancelled as part of the consideration for Delia & Michael's shares, the current level of debt is commensurate with a 40% share of a so-called top 26 club.

We'll see, but the debt will continue to grow because of the interest payable on that debt. Will Norfolk waive such interest in future? 

[nutty nigel 7,565]

1 hour ago, shefcanary said:

 

I hypothesised, and others concured with me on the Attanasio thread, that Attanasio's debt will be cancelled as part of the consideration for Delia & Michael's shares, the current level of debt is commensurate with a 40% share of a so-called top 26 club.

We'll see, but the debt will continue to grow because of the interest payable on that debt. Will Norfolk waive such interest in future? 

They could do that. It's going to end up like that sooner or later anyway. And let's face it that's what most of this board has always wanted. But then I won't care about these things. I'll just carry on going to games supporting the team. I'll probably start doing the Euro Millions. If I win I could maybe invest in a baseball team in Milwaukee and see if that's better. Can't think of anything more useful to do with the money...

[NewNestCarrow 202]

2 hours ago, shefcanary said:

Thanks to Mr Bunce and his analysis of the accounts. I also am glad he has the same concerns over the accounts' detail on to the club's borrowings that I did. Chicken's statement that you can potentially get enough information from other sources is I would argue only partially true, there has never been a clear statement over the loans secured against the parachute payments / media rights (who from / how much / when from / when to / what purpose / whether secured / the interest rate payable / special conditions- all normal disclosures you'd see in any other company accounts).

However the big question is how the hell is the club going to repay the £94m? Well, the post balance sheet activity note and other information in the accounts does give a clue. I also assume that the club will pursue a balanced budget appraoch in the short term at an operating level (the club just about managed it in the past year with only a small(ish) £1.5m loss.

The summer transfer dealings will have generated c. net £17m to knock off that figure. Then the £31m of media rights income will repay a further tranche of that borrowing. This leaves c.£46m, the majority of which is owed to Norfolk / Attanasio, which will grow due to interest on the loans themselves! 

Now it is possible that current squad assets like Rowe, Sara & Sargent could be sold to generate cash to cover a large proportion of this remaining debt, but the squad would be so poor as a result this surely would be self defeating. But ultimately it may be the only way of controlling the level of debt.

I hypothesised, and others concured with me on the Attanasio thread, that Attanasio's debt will be cancelled as part of the consideration for Delia & Michael's shares, the current level of debt is commensurate with a 40% share of a so-called top 26 club.

We'll see, but the debt will continue to grow because of the interest payable on that debt. Will Norfolk waive such interest in future? 

Why are we taking the view that all of this season's media rights income will go towards paying down debt?

 

 

[essex canary 504]

22 minutes ago, NewNestCarrow said:

Why are we taking the view that all of this season's media rights income will go towards paying down debt?

 

 

Good question. That would surely be a big challenge given our wages bill unless we sell all our key player assets too.

[shefcanary 2,439]

On 05/11/2023 at 20:55, shefcanary said:

Thanks to Mr Bunce and his analysis of the accounts. I also am glad he has the same concerns over the accounts' detail on to the club's borrowings that I did. Chicken's statement that you can potentially get enough information from other sources is I would argue only partially true, there has never been a clear statement over the loans secured against the parachute payments / media rights (who from / how much / when from / when to / what purpose / whether secured / the interest rate payable / special conditions- all normal disclosures you'd see in any other company accounts).

However the big question is how the hell is the club going to repay the £94m? Well, the post balance sheet activity note and other information in the accounts does give a clue. I also assume that the club will pursue a balanced budget appraoch in the short term at an operating level (the club just about managed it in the past year with only a small(ish) £1.5m loss.

The summer transfer dealings will have generated c. net £17m to knock off that figure. Then the £31m of media rights income will repay a further tranche of that borrowing. This leaves c.£46m, the majority of which is owed to Norfolk / Attanasio, which will grow due to interest on the loans themselves! 

Now it is possible that current squad assets like Rowe, Sara & Sargent could be sold to generate cash to cover a large proportion of this remaining debt, but the squad would be so poor as a result this surely would be self defeating. But ultimately it may be the only way of controlling the level of debt.

I hypothesised, and others concured with me on the Attanasio thread, that Attanasio's debt will be cancelled as part of the consideration for Delia & Michael's shares, the current level of debt is commensurate with a 40% share of a so-called top 26 club.

We'll see, but the debt will continue to grow because of the interest payable on that debt. Will Norfolk waive such interest in future? 

Just a further addendum to this. I missed a couple of other points here.

The first is that when Attanasio is confirmed as a fit & proper person to be in control of the club, he will of course convert £5m of the loan to equity, thus further reducing the amount owed to him. This takes the debt to him down to c.£41m.

The other point I missed (a symptom of the poor disclosure in the accounts of the debt position and how we arrived at the current state) is that Attanasio's loan to the club is in US$. This means the club also has to account for exchange transactions between the UK and US on the loan and the interest paid. ManUre benefitted this year from positive swings in the exchange rate, it reduced the interest paid to the Glazers in their accounts, although the amount paid didn't change. With loans of £41m and interest of c.£6m which is accruing to the loan so it would appear, a 10% swing in the exchange rate suddenly becomes a big number. 

 

[MrBunce 245]

45 minutes ago, shefcanary said:

Just a further addendum to this. I missed a couple of other points here.

The first is that when Attanasio is confirmed as a fit & proper person to be in control of the club, he will of course convert £5m of the loan to equity, thus further reducing the amount owed to him. This takes the debt to him down to c.£41m.

The other point I missed (a symptom of the poor disclosure in the accounts of the debt position and how we arrived at the current state) is that Attanasio's loan to the club is in US$. This means the club also has to account for exchange transactions between the UK and US on the loan and the interest paid. ManUre benefitted this year from positive swings in the exchange rate, it reduced the interest paid to the Glazers in their accounts, although the amount paid didn't change. With loans of £41m and interest of c.£6m which is accruing to the loan so it would appear, a 10% swing in the exchange rate suddenly becomes a big number. 

 

If I was putting a wager on, I would bet that most of the debt to Mr Attanasio has been or will be paid off this year. The line of credit (up to £21m) and first loan (£1.6m) matured 1 September 2023. The convertible loan (£4.7m) should be turned into equity pending the EFL's approval (I'm still of the view that Mr Attanasio should have needed to pass the Owner's Test when the Shareholders' Agreement was signed). The maturity dates of the promissory notes ($2.1m and $7.7m) hasn't been disclosed. So they may have further to run. I think the player sales have likely freed up enough cash to negate the need to refinance. 

That's pretty good news. It doesn't negate the fact that the club have shelled out a lot in interest. Over the past two years £9.1m (accounting) and £8.0m (cash). I predict another c.£2m to £5m in interest payable for the current year.

In terms of FX, the club recorded an FX loss of £566k last year (£154k loss the year before).  

However you cut it, it's quite a bit of money that's gone out the door to service debt at the expense of financing the club's operations. 

I've said a number of times, that I'm not a fan of the proliferation of secured lending in football. From my point of view, all it means is that you take from future seasons to take a punt. In Norwich's case, the club took a punt in the Prem and mortgaged the parachute payments and future transfer fees. Those stated maturing last year and so with the well drying up, the club have had to turn to Mr Attanasio to fill the breach. He did, now the club have paid the price this season (look at the summer's transfer business).

 

[shefcanary 2,439]

Thanks Mr Bunce, so exchange rate charge more than they paid the ED. Next year it could be more than they pay the player with the biggest salary. 

[essex canary 504]

5 minutes ago, shefcanary said:

Thanks Mr Bunce, so exchange rate charge more than they paid the ED. Next year it could be more than they pay the player with the biggest salary. 

No risk assessment there then.

[MrBunce 245]

I would imagine the club continually assess their foreign currency exposure and risks. I've heard before that some clubs do engage in hedging - for transfer fees payable and receivable, foreign currency borrowing, international/European football money. It may be the case that Norwich are hedging but it might be a partial hedge (you aren't forced to disclose under FRS102). They may not be hedging at all. I'm not sure how accessible and affordable hedge facilities would be for an entity like Norwich (it's outside my area of expertise). 

[shefcanary 2,439]

Swiss Ramble's analysis of the accounts is now available. Unfortunately I'm too miserly to pay the £50 a year subscription so only get a part of his analysis in an email as part of his free subscriber list. Here is what I have received, but if anyone does have a subscription feel free to share the rest.

Norwich City Finances 2022/23

You've Changed, I've Changed

Norwich City’s 2022/23 accounts cover a season when they finished 13th in the Championship following relegation from the Premier League the previous year. This was clearly a disappointment to the club, as admitted by executive director Zoe Webber, “To finish outside the play-off places fell below the expectations we had heading into the campaign.”

As a result head coach Dean Smith was dismissed in December, to be replaced by David Wagner, but the team failed to mount a promotion challenge under the German.

Ownership

After many years under the guidance of Delia Smith and Michael Wynn Jones, the Norwich City are increasingly influenced by Michael Attanasio, the owner of American baseball team Milwaukee Brewers.

He first purchased a minority stake from former director Michael Foulger last year, but the club has recently ratified the acquisition of many more shares, bringing his shareholding to the same 40% level as Smith and her husband.

At the time of Attanasio’s initial involvement, Smith said, “We feel he will be a breath of fresh air in our board and football club”, though it’s understood that the “old guard” will remain in control of the day to day running of the club until at least January 2026.

Changes

However, it’s clear that the fans are very unhappy, as epitomised by a very blunt statement from the Canaries Trust.

“The completion of the legal process with Mark Attanasio seems to finally be approaching a conclusion, but, from an outside perspective there’s no overall sense of leadership, or direction, and supporters are desperate for some sense of a vision that we can all buy into and move forward together.

It's sad to say that many supporters now feel completely disconnected from the club we all support, and many are turning up to games out of a sense of duty, rather than a compelling desire to attend matches. Apathy is widespread and some are questioning whether they want to continue attending games despite having done so for decades in some cases.

Something has to change, but the supporters can’t bring that change about: it must come from within the Club and we trust that the current silence will be broken before the situation deteriorates further.”

Long-serving sporting director, Stuart Webber, had already announced his departure, to be succeeded by Arsenal’s loans manager, Ben Knapper. However, as a sign of the club’s growing concerns, both of these moves were brought forward this week in an attempt to stop the decline (Norwich currently sit in a lowly 17th position in the Championship).

So things are not looking too good on the park at the moment, but how are Norwich City doing off the pitch?

Profit/(Loss) 2022/23

Norwich City’s pre-tax loss widened from £24m to £27m, as revenue dropped £58m (43%) from the club record £134m to £76m following relegation to the Championship. This was partly offset by profit from player sales increasing from zero to £4m, though other operating income fell £6m (83%) from £7m to £1m.

The loss would have been even higher without a significant reduction in operating expenses, which were cut by £60m (37%) from £162m to £102m, though interest payable doubled from £3m to £6m.

As Finance Director Anthony Richens wryly observed, “Relegation from the Premier League significantly impacts club finances.”

The main driver of Norwich’s £58m revenue decrease was broadcasting, which more than halved in the Championship, falling by £53m from £102m to £49m.

The other revenue streams were also lower, though the club did well to limit the size of the decrease, which Richens said was “a credit to a loyal supporter and partner base.”

As a result, match day was down just £0.8m (7%) from £10.8m to £10.0m, while commercial dropped £4m (20%) from £21m to £17m.

Norwich compensated for lower revenue with a steep reduction in the wage bill, which was cut by £62m (52%) from the club’s all-time high of £118m to £56m. However, player amortisation was largely unchanged at £23m, while other expenses rose £2m (9%) from £17m to £19m.

Norwich are the only Championship club that has to date published accounts for 2022/3, but their £27m pre-tax loss is clearly on the high side for the division, looking at other clubs’ results from the previous season...

[Soldier on 160]

52 minutes ago, shefcanary said:

Swiss Ramble's analysis of the accounts is now available. Unfortunately I'm too miserly to pay the £50 a year subscription so only get a part of his analysis in an email as part of his free subscriber list. Here is what I have received, but if anyone does have a subscription feel free to share the rest.

 

 

 

 

Norwich City Finances 2022/23

You've Changed, I've Changed

Norwich City’s 2022/23 accounts cover a season when they finished 13th in the Championship following relegation from the Premier League the previous year. This was clearly a disappointment to the club, as admitted by executive director Zoe Webber, “To finish outside the play-off places fell below the expectations we had heading into the campaign.”

As a result head coach Dean Smith was dismissed in December, to be replaced by David Wagner, but the team failed to mount a promotion challenge under the German.

Ownership

After many years under the guidance of Delia Smith and Michael Wynn Jones, the Norwich City are increasingly influenced by Michael Attanasio, the owner of American baseball team Milwaukee Brewers.

He first purchased a minority stake from former director Michael Foulger last year, but the club has recently ratified the acquisition of many more shares, bringing his shareholding to the same 40% level as Smith and her husband.

At the time of Attanasio’s initial involvement, Smith said, “We feel he will be a breath of fresh air in our board and football club”, though it’s understood that the “old guard” will remain in control of the day to day running of the club until at least January 2026.

Changes

However, it’s clear that the fans are very unhappy, as epitomised by a very blunt statement from the Canaries Trust.

“The completion of the legal process with Mark Attanasio seems to finally be approaching a conclusion, but, from an outside perspective there’s no overall sense of leadership, or direction, and supporters are desperate for some sense of a vision that we can all buy into and move forward together.

It's sad to say that many supporters now feel completely disconnected from the club we all support, and many are turning up to games out of a sense of duty, rather than a compelling desire to attend matches. Apathy is widespread and some are questioning whether they want to continue attending games despite having done so for decades in some cases.

Something has to change, but the supporters can’t bring that change about: it must come from within the Club and we trust that the current silence will be broken before the situation deteriorates further.”

Long-serving sporting director, Stuart Webber, had already announced his departure, to be succeeded by Arsenal’s loans manager, Ben Knapper. However, as a sign of the club’s growing concerns, both of these moves were brought forward this week in an attempt to stop the decline (Norwich currently sit in a lowly 17th position in the Championship).

So things are not looking too good on the park at the moment, but how are Norwich City doing off the pitch?

Profit/(Loss) 2022/23

Norwich City’s pre-tax loss widened from £24m to £27m, as revenue dropped £58m (43%) from the club record £134m to £76m following relegation to the Championship. This was partly offset by profit from player sales increasing from zero to £4m, though other operating income fell £6m (83%) from £7m to £1m.

The loss would have been even higher without a significant reduction in operating expenses, which were cut by £60m (37%) from £162m to £102m, though interest payable doubled from £3m to £6m.

As Finance Director Anthony Richens wryly observed, “Relegation from the Premier League significantly impacts club finances.”

The main driver of Norwich’s £58m revenue decrease was broadcasting, which more than halved in the Championship, falling by £53m from £102m to £49m.

The other revenue streams were also lower, though the club did well to limit the size of the decrease, which Richens said was “a credit to a loyal supporter and partner base.”

As a result, match day was down just £0.8m (7%) from £10.8m to £10.0m, while commercial dropped £4m (20%) from £21m to £17m.

Norwich compensated for lower revenue with a steep reduction in the wage bill, which was cut by £62m (52%) from the club’s all-time high of £118m to £56m. However, player amortisation was largely unchanged at £23m, while other expenses rose £2m (9%) from £17m to £19m.

Norwich are the only Championship club that has to date published accounts for 2022/3, but their £27m pre-tax loss is clearly on the high side for the division, looking at other clubs’ results from the previous season...

FYI the full article can now be read on wotb

[Feedthewolf 4,865]

51 minutes ago, Soldier on said:

FYI the full article can now be read on wotb

...and now on here:

Norwich City’s 2022/23 accounts cover a season when they finished 13th in the Championship following relegation from the Premier League the previous year. This was clearly a disappointment to the club, as admitted by executive director Zoe Webber, “To finish outside the play-off places fell below the expectations we had heading into the campaign.”

As a result head coach Dean Smith was dismissed in December, to be replaced by David Wagner, but the team failed to mount a promotion challenge under the German.

Ownership
After many years under the guidance of Delia Smith and Michael Wynn Jones, the Norwich City are increasingly influenced by Michael Attanasio, the owner of American baseball team Milwaukee Brewers.

He first purchased a minority stake from former director Michael Foulger last year, but the club has recently ratified the acquisition of many more shares, bringing his shareholding to the same 40% level as Smith and her husband.

At the time of Attanasio’s initial involvement, Smith said, “We feel he will be a breath of fresh air in our board and football club”, though it’s understood that the “old guard” will remain in control of the day to day running of the club until at least January 2026.

Changes
However, it’s clear that the fans are very unhappy, as epitomised by a very blunt statement from the Canaries Trust.

“The completion of the legal process with Mark Attanasio seems to finally be approaching a conclusion, but, from an outside perspective there’s no overall sense of leadership, or direction, and supporters are desperate for some sense of a vision that we can all buy into and move forward together.

It's sad to say that many supporters now feel completely disconnected from the club we all support, and many are turning up to games out of a sense of duty, rather than a compelling desire to attend matches. Apathy is widespread and some are questioning whether they want to continue attending games despite having done so for decades in some cases.

Something has to change, but the supporters can’t bring that change about: it must come from within the Club and we trust that the current silence will be broken before the situation deteriorates further.”

Long-serving sporting director, Stuart Webber, had already announced his departure, to be succeeded by Arsenal’s loans manager, Ben Knapper. However, as a sign of the club’s growing concerns, both of these moves were brought forward this week in an attempt to stop the decline (Norwich currently sit in a lowly 17th position in the Championship).

So things are not looking too good on the park at the moment, but how are Norwich City doing off the pitch?

Profit/(Loss) 2022/23
Norwich City’s pre-tax loss widened from £24m to £27m, as revenue dropped £58m (43%) from the club record £134m to £76m following relegation to the Championship. This was partly offset by profit from player sales increasing from zero to £4m, though other operating income fell £6m (83%) from £7m to £1m.

The loss would have been even higher without a significant reduction in operating expenses, which were cut by £60m (37%) from £162m to £102m, though interest payable doubled from £3m to £6m.

As Finance Director Anthony Richens wryly observed, “Relegation from the Premier League significantly impacts club finances.

The main driver of Norwich’s £58m revenue decrease was broadcasting, which more than halved in the Championship, falling by £53m from £102m to £49m.

The other revenue streams were also lower, though the club did well to limit the size of the decrease, which Richens said was “a credit to a loyal supporter and partner base.”

As a result, match day was down just £0.8m (7%) from £10.8m to £10.0m, while commercial dropped £4m (20%) from £21m to £17m.

Norwich compensated for lower revenue with a steep reduction in the wage bill, which was cut by £62m (52%) from the club’s all-time high of £118m to £56m. However, player amortisation was largely unchanged at £23m, while other expenses rose £2m (9%) from £17m to £19m.

Norwich are the only Championship club that has to date published accounts for 2022/3, but their £27m pre-tax loss is clearly on the high side for the division, looking at other clubs’ results from the previous season.

It will not have escaped people’s attention that the clubs with the largest losses are those promoted to the Premier League, partly reflecting investment in the squad, but also the hefty bonus payments (or price of success).

Very few clubs make money in this incredibly competitive league, though Hull City, WBA, Peterborough United and Blackpool did manage to post small profits in 2021/22. Stoke City also reported a massive £102m profit, but this would actually have been an £18m loss without the benefit of a £120m exceptional loan waiver.

Norwich only generated a “modest” £3.6m profit from player sales, though this was more than the prior year, when they actually lost £51k.

The low profit was not out of the ordinary in the Championship, where most clubs make very little from player trading. Traditionally, the only clubs that tend to do well here are those that have recently been relegated from the Premier League, which highlights another benefit they enjoy on top of parachute payments.

That was certainly the case for Norwich in 2020/21, when their profit from player sales was a hefty £60m, mainly due to the club record sale of Emi Buendia to Aston Villa. That was actually the highest gain generated by clubs in their first season after relegation (in the last six years).

However, it was a very different story last season, when Norwich generated “limited transfer income”, leading to the smallest profit from player sales over this period.

Profit Trend
Norwich fans would probably hate to be described as a “yo-yo” club, but this is relevant to their finances, as their club tends to be profitable in the Premier League, but lose money in the Championship.

However, that changed in 2021/22 when they also lost £24m in the top flight, mainly because they loosened the purse strings, investing a relatively large amount in the squad, both in terms of transfers and wages.

Over the years, Norwich have looked to adopt a sustainable approach, making £31m profits in the decade up to 2021. However, there has been a fairly dramatic twist in their model in the last two years, when they lost £51m, more than wiping out those surpluses.

The comparison is actually even starker here, as Norwich’s finances were heavily impacted by the COVID pandemic in the 2019/20 and 2020/21 seasons, thus reducing their profit. I estimate that the club lost £30m revenue in these years, split between match day £13m, broadcasting £10m and commercial £7m.

Player Sales Trend
However, the Norwich business model is fairly dependent on player sales. They have made an impressive £163m profit in the last ten years, but their performance has not been consistent, as the majority of the gains came in only two seasons: £60m in 2020/21 and £48m in 2017/18.

This season’s figures will be pretty good, though, following the sales of academy products Andrew Omobamidele to Nottingham Forest for £11m and Max Aarons to Bournemouth for £9m, as well as Milot Rashica moving to Besiktas.

Operating Profit/(Loss)
Norwich’s operating loss (excluding player sales and interest) increased from £20m to £25m, though this was better than the last two occasions they were in the Championship (£37m in both 2018/19 and 2020/21).

The only time that they made a (small) profit from day-to-day business in the last nine years was £3m in 2019/20 (in the Premier league).

In fairness, this sort of performance is not unusual in the Championship, where no clubs have managed to deliver an operating profit in the last two years. Well over half of them lost more than £20m without the benefit of player sales.

Furthermore, the club would point out that their operating loss excluding player trading (sales, amortisation and impairment) was only £1.5m, albeit worse than the prior year’s £3.0m profit.

Revenue
Norwich’s £76m revenue was their highest ever in the Championship, slightly higher than the previous record of £75m six years ago. Broadcasting was slightly lower, but this was more than offset by growth in both commercial and match day.

Norwich’s £76m revenue is currently the highest in the Championship, though we are still awaiting 2022/23 accounts from the other two clubs relegated from the Premier League the previous season, namely Burnley and Watford.

These clubs enjoy a big advantage over clubs that do not receive parachute payments, where the largest revenue in 2021/22 was Stoke City’s £31m, followed by Nottingham Forest and Bristol City, both £30m.

In fact, Norwich’s revenue last season was the second highest ever in the Championship, only surpassed by Newcastle United’s £86m in 2016/17, so they really should have performed better.

Parachute Payments
Norwich’s revenue was boosted by a parachute payment, which was worth an estimated £44m last season. In total, they have received £186m such payments since 2015, having been relegated four times in that period.

In fairness, they have often made good use of these funds, as they have also been promoted back to the Premier League on three occasions.

It’s a while since the Premier League published details of parachute payments, but in 2019/20 a club received £42m in the first year after relegation from the top flight, £34m in year two and £15m in year three.

As Norwich were relegated after just one season back in the top flight, they will only receive parachutes for two years (instead of the full three years), so this is the last season when they will hold an advantage.

Broadcasting Revenue
Norwich’s broadcasting income more than halved in the Championship from £102m to £49m, including the Premier League parachute payment and EFL central distribution.

In the previous season Norwich became the first club finishing bottom of the Premier League to earn more than £100m TV money. This included £88m equal share (domestic £32m, overseas £49m & commercial £7m), £11m facility fees (12 live games) and £2m merit payment.

Amazingly, this was more than the champions of Germany, Italy and Spain received from their domestic broadcasting agreement, which highlights the strength of the Premier League TV deal.

Most Championship clubs receive between £8m and £10m broadcasting income, but there is obviously a massive gap to those clubs with parachute payments, who average around £50m in the first year after relegation.

Match Day Revenue
Despite relegation, Norwich’s gate receipts only fell 7% from £10.8m to £10.0m, mitigated by five more home games plus the first ticket price increase in 10 years.

The club said this was driven by “the ongoing financial challenges faced throughout the course of the COVID-19 pandemic”, adding that it had “worked hard to ensure that this adjustment in pricing is minimal”. The cheapest season tickets rose 7%, while the most expensive were up 3.5%. Ticket prices were frozen in 2023/24.

Although Norwich’s match day revenue was one of the lowest in the Premier League, it is actually the highest (to date) in the Championship. The closest challengers in 2021/22 were Nottingham Forest £8.7m and Sheffield United £7.1m.

Norwich’s average attendance of 26,131 was 3% lower than the 27,005 peak in the Premier League, but it was slightly more than the last time they were in the Championship.

Norwich attracted the third highest crowd in the Championship in 2022/23, only behind Sunderland 38,480 and Sheffield United 28,746. The club sold out its season tickets quota, showing “the incredible support of our fans”.

The board has spent some money on a feasibility study into a possible expansion of the Carrow Road stadium.

Commercial Revenue
Norwich’s commercial revenue fell £4m (20%) from £21m to £17m, mainly due to the usual reductions in the Championship for sponsorship & advertising, down from £7.4m to £4.3m, and catering, down from £6.1m to £4.2m.

In total, this is a fair bit higher than the last few times they were in the second tier (expect for the COVID-impacted 2020721 season). In fact, the 2022/23 campaign was commercially the club’s best season in the Championship, due to “record-breaking revenue” in partnerships and retail.

A new Championship best for the Canaries was set with 33,000 shirt sales, easily beating the previous high of 27,000.

Despite the decrease, Norwich’s £17.0m commercial income is the highest in the Championship, ahead of Stoke City £16.6m, and Bristol City £15.8m (2021/22 figures), though they may be overtaken by Sunderland when they publish their 2022/23 accounts.

Norwich’s shirt sponsorship with Lotus Cars has been extended by two years, while Joma replaced Errea as kit supplier in 2021/22. Norfolk based tech firm Sekura has become back-of-shirt sponsor for the 2023/24 season, as well as the main sponsor for the women’s team.

There was also commercial income by using the stadium for some major events, e.g. the Arctic Monkeys gig.

Other Operating Income
Norwich’s other operating income dropped 83% from £7.4m to £1.2m, mainly due to a steep reduction in player loans

The highest amount booked in this category in the 2021/22 Championship was Birmingham City £4.0m, mainly due to a business interruption insurance claim.

Wages
Norwich’s wage bill more than halved following relegation, falling £62m (52%) from the club record £118m to £56m. This was £11m lower than the last time they were in the Championship two years before, but that had been inflated by a promotion bonus. Player contracts include relegation clauses of up to 60%.

Despite the steep reduction, Norwich’s £56m wage bill was still pretty high for the Championship. In 2021/22 it was only surpassed by the three promoted clubs, whose reported wages included hefty promotion bonuses.

This is a clear indication of Norwich’s recent significant investment in the playing squad. As Richens said, this has “a resulting impact on salaries”. It is evident that Norwich have really pushed the boat out in the past couple of years, though the results have been disappointing to say the least.

In fact, the previous season’s £118m wage bill was the highest ever for a club relegated from the Premier League. If the Canaries had managed to stay up, their wages would have been even higher, as they would have then paid a survival bonus.

Clearly, their wages were still very much in the bottom half of the top flight, but it’s worth noting that these were still higher than some much more successful clubs like Brighton and Brentford.

Furthermore, Norwich’s £56m wage bill in 2022/23 is actually the fourth highest for a club that did not manage to secure promotion, only behind Aston Villa (twice) and Bournemouth.

Despite the big decrease in revenue following relegation, Norwich’s wages to turnover ratio improved from 88% to 75%, which was almost exactly the same as the last time they were in the Championship before the pandemic struck.

Even in the Premier League, they have struggled to get below the recommended upper limit of 70%, which highlights the challenge for clubs with lowish revenue.

That said, Norwich’s 75% is actually one of the best in the Championship, where the vast majority of clubs in this ultra-competitive division are burdened with unsustainable ratios well above 100%

Norwich’s directors remuneration more than doubled from £204k to £513k despite relegation. However, it is worth remembering that none of the directors received any money in 2020 and 2021, presumably due to the impact of COVID.

It’s also much less than it has been in the past, e.g. £2.1m in 2016, though it is at the upper end of the Championship.

Player Amortisation
Norwich’s player amortisation, the annual charge to expense transfer fees over a player’s contract, was flat at £23m, though this expense had more than doubled the previous year from only £11m.

Norwich’s £23m player amortisation was one of the highest in the Championship, though a fair way behind Bournemouth’s £30m. It was no coincidence that these two clubs were recently relegated from the Premier League, as they managed to maintain a relatively expensive squad.

Other Expenses
Although other expenses are usually lower in the Championship, Norwich’s actually increased by £2m (9%) from £17m to £19m, a new record for the club. This was again one of the highest in the Championship, only below Sheffield United £20m.

Transfers
Norwich spent £15m on player purchases, mainly on two emerging talents from South America: Gabriel Sara from Brazilian club Sao Paolo and Marcelino Nunez from Chilean club Universidad Catolica. This is likely to be one of the highest outlays in the Championship last season.

Following relegation, this was unsurprisingly much lower than the prior season’s club record of £48m gross spend, when Norwich really “went for it”, even though this was still not that big for the Premier League.

To underline how much this outlay represented for Norwich, their 2021/22 expenditure was almost as much as the previous three years combined.

However, the taps have been turned off since relegation, as Norwich have only spent £3m, mainly on Christian Fassnacht from Swiss club Young Boys.

Instead, they have opted for a number of very experienced players on free transfers, including Ashley Barnes (Burnley), Shane Duffy (Fulham), Adam Forshaw (Leeds United) and Danny Batth (Sunderland).

Squad Cost
This might come as a surprise to many fans, given their performances on the pitch, but Norwich’s squad cost increased from £88m to £90m, a new record for the club. This is based on amounts paid per the balance sheet (as opposed to market value).

Following this small increase, Norwich’s £90m squad cost was one of the highest in the Championship, though still a lot lower than some other recently relegated clubs, e.g. Fulham and Bournemouth had £197m and £151m respectively in 2021/22.

Debt
Norwich’s gross debt increased by £16m from £69m to £85m, though there was a “fundamental” change in the debt structure, as previous loans secured against TV money and transfer payments were replaced by unsecured financing provided by Attanasio’s Norfolk FB LLC.

As a result, the club had £37.5m director loans with £36.6m from Attanasio and £0.9m from Delia and her husband, though there were still £47.5m external loans remaining.

In addition, there are £11.4m preference shares, including £10m from Attanasio with 7% dividends. If these were to be considered as debt, then the total gross borrowings would be £96m.

Even after the increase, Norwich’s £85m gross debt was nowhere near the highest in the Championship, as it was a long way below the likes of Bournemouth £184m, Blackburn Rovers £163m and Middlesbrough £148m.

That said, their debt has shot up from only £5m just five years ago. Richens justified the growth by saying that the additional debt had “permitted an investment into infrastructure and the playing squad”.

However, it is worth noting that Norwich now have the highest external debt in the Championship with their £48m being more than Sheffield United £41m and Hull City £23m (both figures from 2021/22).

As a result of the higher debt, Norwich’s interest payment increased from £3.1m to £5.0m. This was only £0.6m two years ago, so the annual burden has significantly grown. The interest rate on the £39m short-term loan is 5.6%.

In fact, Norwich are paying more interest than any other Championship club. In 2021/22 the only club within sight of the Canaries £5.0m was Sheffield United £3.1m, but everyone else paid less than £1m.

The reason that the payments are so low, even though amounts owed are relatively high, is because most of the debt in the Championship is provided interest-free by club owners.

Transfer Debt
Norwich’s transfer debt more than halved from £28m to £12m, which is one of the club’s lowest payables in recent years. They were owed £19m by other clubs, so actually have £7m net receivables.

Even after the decrease, Norwich’s £12m transfer debt is still quite high for the Championship, albeit a lot lower than Sheffield United, WBA and Bournemouth in 2021/22.

It is also worth noting that Norwich have £69m contingent liabilities, split between £65m transfer fees and £4m signing-on fees, though these will only become payable if certain contractual conditions are met, e.g. number of appearances, promotion, etc.

This is comfortably the most in the Championship, over £50m more than the next highest club, even after reducing from prior year’s £80m. In fact, this is only surpassed by three clubs in the Premier League, namely Manchester City, Manchester United and Everton.

Cash Flow
After adjusting for non-cash movements, Norwich had £7m negative operating cash flow, though this was offset by £19m player sales. However, the club then spent £30m on player purchases, which was much more than the £15m signings last season, as they had to pay instalments on acquisitions made in previous years.

They then invested another £6m in infrastructure, including work at the stadium and training centre, and paid £5m interest. The shortfall was largely funded by £16m additional loans and £10m preference shares.

As a result, Norwich’s cash in the bank decreased from £5m to £2m. This was a fairly low balance, though most clubs in the Championship had less than £3m cash, so it was by no means out of the ordinary.

As Richens once explained, “our strategy is investing all available cash into the club’s facilities, current and future playing squads and the Academy”.

In the last 10 years Norwich have had £97m available cash, including £77m from loans and £10m shares, boosted by £10m from dipping into the bank balance.

This was mainly used for £37m (net) player purchases and £35m capital expenditure, including the £20m state-of-the-art training centre at Colney. Another £13m went on interest, while £11m was used to cover operating losses.

Norwich pay dividends on the preference shares, but this only added up to £0.5m in the decade.

Funding
Over the years Norwich’s shareholders have put hardly any money into the club, though that changed last season when Attanasio provided £10m funding in exchange for his preference shares.

This is in stark contrast to some other Championship clubs, where owners have pumped in substantial amounts, e.g. in the 10 years up to 2022 Fulham benefited from £722m funding, followed by QPR £268m, Middlesbrough £206m and Cardiff City £194m.

Financial Sustainability
Although Norwich reported a £39m loss over the EFL’s 3-year monitoring period (including the average of the 2019/20 and 2020/21 COVID seasons), they were fine with the Profitability and Sustainability (FFP) rules.

This is because they could adjust their overall deficit with allowable deductions for “healthy” expenditure, promotion bonuses and COVID losses.

Note: their annual allowable loss was only £5m in the years when the owners did not invest any capital.

Conclusion
Norwich’s executive director Zoe Webber said, “We remain committed to fulfilling our ambition of becoming a sustainable and successful Premier League club”, though that currently seems a long way off, given that they are currently struggling at the wrong end of the Championship table.

The board tried to buck the cycle of promotion followed by relegation by spending a lot more than it usually does in the last two years (and also not selling players to balance the books), but this bold plan did not work. In fact, it has only increased debt and interest payments.

As Stuart Webber said with some understatement, “The last two seasons have proven difficult, and our performances on the pitch haven’t been what we wanted.”

It’s too early to say whether the recent changes off the pitch will improve Norwich’s future prospects, but the present strife would not be what Attanasio signed up for when he invested in the club.

The Canaries’ challenge will be even harder if they do not secure promotion this season, as they would then have to compete without the advantage of parachute payments.

Edited November 9, 2023 by Feedthewolf

[PurpleCanary 5,578]

Just a small point on this:

"Norwich’s directors remuneration more than doubled from £204k to £513k despite relegation. However, it is worth remembering that none of the directors received any money in 2020 and 2021, presumably due to the impact of COVID."

The increase is I think because Zoe Webber only became a director some way through the previous financial year, and the lack of any remuneration before was not due to Covid but because she wasn't a director, and we didn't and don't have any other paid directors.

Edited November 9, 2023 by PurpleCanary

[Feedthewolf 4,865]

The 'Wages' section really underlines how huge a gamble we took in our second PL season (and, consequently, how much we absolutely screwed our financial model to purchase totally unsuitable players). The sentence in bold is particularly remarkable.

Wages
Norwich’s wage bill more than halved following relegation, falling £62m (52%) from the club record £118m to £56m. This was £11m lower than the last time they were in the Championship two years before, but that had been inflated by a promotion bonus. Player contracts include relegation clauses of up to 60%.

Despite the steep reduction, Norwich’s £56m wage bill was still pretty high for the Championship. In 2021/22 it was only surpassed by the three promoted clubs, whose reported wages included hefty promotion bonuses.

This is a clear indication of Norwich’s recent significant investment in the playing squad. As Richens said, this has “a resulting impact on salaries”. It is evident that Norwich have really pushed the boat out in the past couple of years, though the results have been disappointing to say the least.

In fact, the previous season’s £118m wage bill was the highest ever for a club relegated from the Premier League. If the Canaries had managed to stay up, their wages would have been even higher, as they would have then paid a survival bonus.

Clearly, their wages were still very much in the bottom half of the top flight, but it’s worth noting that these were still higher than some much more successful clubs like Brighton and Brentford.

Furthermore, Norwich’s £56m wage bill in 2022/23 is actually the fourth highest for a club that did not manage to secure promotion, only behind Aston Villa (twice) and Bournemouth.

EDIT: this statistic is also pretty alarming – "However, it is worth noting that Norwich now have the highest external debt in the Championship with their £48m being more than Sheffield United £41m and Hull City £23m (both figures from 2021/22)." Fingers crossed Attanasio converts a lot of that debt into money owed to him rather than external sources...

Edited November 9, 2023 by Feedthewolf

[shefcanary 2,439]

1 minute ago, Feedthewolf said:

The 'Wages' section really underlines how huge a gamble we took in our second PL season (and, consequently, how much we absolutely screwed our financial model to purchase totally unsuitable players).

And people still question "where did the money go / how the hell have we built up such large debt?" 🙂 

[essex canary 504]

5 minutes ago, Feedthewolf said:

The 'Wages' section really underlines how huge a gamble we took in our second PL season (and, consequently, how much we absolutely screwed our financial model to purchase totally unsuitable players). The sentence in bold is particularly remarkable.

Wages
Norwich’s wage bill more than halved following relegation, falling £62m (52%) from the club record £118m to £56m. This was £11m lower than the last time they were in the Championship two years before, but that had been inflated by a promotion bonus. Player contracts include relegation clauses of up to 60%.

Despite the steep reduction, Norwich’s £56m wage bill was still pretty high for the Championship. In 2021/22 it was only surpassed by the three promoted clubs, whose reported wages included hefty promotion bonuses.

This is a clear indication of Norwich’s recent significant investment in the playing squad. As Richens said, this has “a resulting impact on salaries”. It is evident that Norwich have really pushed the boat out in the past couple of years, though the results have been disappointing to say the least.

In fact, the previous season’s £118m wage bill was the highest ever for a club relegated from the Premier League. If the Canaries had managed to stay up, their wages would have been even higher, as they would have then paid a survival bonus.

Clearly, their wages were still very much in the bottom half of the top flight, but it’s worth noting that these were still higher than some much more successful clubs like Brighton and Brentford.

Furthermore, Norwich’s £56m wage bill in 2022/23 is actually the fourth highest for a club that did not manage to secure promotion, only behind Aston Villa (twice) and Bournemouth.

EDIT: this statistic is also pretty alarming – "However, it is worth noting that Norwich now have the highest external debt in the Championship with their £48m being more than Sheffield United £41m and Hull City £23m (both figures from 2021/22)." Fingers crossed Attanasio converts a lot of that debt into money owed to him rather than external sources...

What have I been saying for the last year?

[essex canary 504]

14 minutes ago, PurpleCanary said:

Just a small point on this:

"Norwich’s directors remuneration more than doubled from £204k to £513k despite relegation. However, it is worth remembering that none of the directors received any money in 2020 and 2021, presumably due to the impact of COVID."

The increase is I think because Zoe Webber only became a director some way through the previous financial year, and the lack of any remuneration before was not due to Covid but because she wasn't a director, and we didn't and don't have any other paid directors.

True but equally we can ask why we keep interchanging between having Executive Directors or not having them with no obvious rhyme or reason.

[TIL 1010 4,779]

11 minutes ago, essex canary said:

What have I been saying for the last year?

You have been far from being the only one saying it but nobody else has been banging on about it multiple times on multiple threads on a daily basis.

Edited November 9, 2023 by TIL 1010

[MrBunce 245]

I think you should be able to sign up for a free trial to Swiss Ramble's substack and cancel (if you choose to) before the first payment. 

@PurpleCanary is correct r.e. directors (Zoe Webber's) remuneration.

A few things jumped out at me (among others):

The highest ever wage bill for a relegated club in history (and as I mentioned last year, spending on wages being similar to many 'established' premier league sides. Kieran Maguire mentioned on a recent Price of Football podcast that only Man United did worse on a £wage per goal than Norwich. 

The club spent more on wages and transfers than Brentford (recall the narrative pushed around that). 

That last years' revenue was the second highest in Championship history. 

That last years' wage bill was the the fourth highest to not achieve promotion behind Villa x 2 and Bournemouth (both clubs, if I recall, effectively broke FFP in getting promoted). It would have been even higher if the club had been promoted due to bonuses. 

[PurpleCanary 5,578]

16 minutes ago, essex canary said:

True but equally we can ask why we keep interchanging between having Executive Directors or not having them with no obvious rhyme or reason.

I don't disagree, although I don't think it necessarily matters whether or not the CEO is a director. For me the key ingredient missing in the boardroom, certainly since Ed Balls left, is a really strong independent mind.

[Soldier on 160]

2 minutes ago, PurpleCanary said:

I don't disagree, although I don't think it necessarily matters whether or not the CEO is a director. For me the key ingredient missing in the boardroom, certainly since Ed Balls left, is a really strong independent mind.

Been n

 

2 minutes ago, PurpleCanary said:

I don't disagree, although I don't think it necessarily matters whether or not the CEO is a director. For me the key ingredient missing in the boardroom, certainly since Ed Balls left, is a really strong independent mind.

been missing that since Alan Bowkett

[shefcanary 2,439]

3 hours ago, Feedthewolf said:

It is also worth noting that Norwich have £69m contingent liabilities, split between £65m transfer fees and £4m signing-on fees, though these will only become payable if certain contractual conditions are met, e.g. number of appearances, promotion, etc.

This is comfortably the most in the Championship, over £50m more than the next highest club, even after reducing from prior year’s £80m. In fact, this is only surpassed by three clubs in the Premier League, namely Manchester City, Manchester United and Everton.

The figure for contingent liabilities is almost too big to consider in terms of other metrics from the accounts. It represents over ¾ of the cost of the squad at the end of June, nearly 1¼ times the annual salary cost, and more concerning nearly 2½ times our total non-broadcast income!

Okay, so some of the conditions might never occur. For instance promotion now seems remote with most of the current squad. If we did gain promotion the payment of these contingent liabilities probably prevents any potential team strengthening, so perhaps another reason for not getting promoted too quickly. However players appearances will be clocking up, although quite a lot of the recent acquisitions are still not yet seeing first team action.

I've considered which players could be subject to a contingent liability and thus attribute a value for this to them. Players brought from South America are likely the source of much of the liability. Sara, Nunez, Borja Sainz, Lima, Montóia and Reyes could account perhaps £40m of the total. The European acquisitions Sargent, Fassnacht, Placheta, Sorensen and Giannoulis might well account for another £20m. Those from the British Isles I would suggest would be lower in value; Gunn, Fisher, McCallum, Adegboyega, Manning and Ogwuru cover the remaining £9m.

There might have been a feeling at the year-end the total liability was probable. However where we stand today, any liability linked to promotion would seem remote. If the accounts were drafted today, promotion liabilities would probably fall out of the total number 🙂 reducing the liability down to the levels of other Championship clubs (£20 - 30m). 

[aBee 151]

4 hours ago, MrBunce said:

I think you should be able to sign up for a free trial to Swiss Ramble's substack and cancel (if you choose to) before the first payment. 

@PurpleCanary is correct r.e. directors (Zoe Webber's) remuneration.

A few things jumped out at me (among others):

The highest ever wage bill for a relegated club in history (and as I mentioned last year, spending on wages being similar to many 'established' premier league sides. Kieran Maguire mentioned on a recent Price of Football podcast that only Man United did worse on a £wage per goal than Norwich. 

The club spent more on wages and transfers than Brentford (recall the narrative pushed around that). 

That last years' revenue was the second highest in Championship history. 

That last years' wage bill was the the fourth highest to not achieve promotion behind Villa x 2 and Bournemouth (both clubs, if I recall, effectively broke FFP in getting promoted). It would have been even higher if the club had been promoted due to bonuses. 

Your 21-22 wage bill was higher than Brentford’s 23-24 one!!!

[nutty nigel 7,565]

58 minutes ago, aBee said:

Your 21-22 wage bill was higher than Brentford’s 23-24 one!!!

You maybe better at football right now. But our team of FPAs would have you on toast buddy...

[wcorkcanary 4,336]

8 hours ago, essex canary said:

What have I been saying for the last year?

It's not what you saý it's the way that you say it. 

Your posts are tainted with avarice.  Wolfos never are. 

Edited November 9, 2023 by wcorkcanary

[essex canary 504]

11 minutes ago, wcorkcanary said:

It's not what you saý it's the way that you say it. 

Your posts are tainted with avarice.  Wolfos never are. 

The avarice relates to those claiming substantial salaries whilst failing to balance budgets and those living off the interest receipts flowing from it all of which is being funded by supporters in far more modest financial circumstances.

[wcorkcanary 4,336]

7 minutes ago, essex canary said:

The avarice relates to those claiming substantial salaries whilst failing to balance budgets and those living off the interest receipts flowing from it all of which is being funded by supporters in far more modest financial circumstances.

Ask them why , not me , Charlatan. How you face yourself in the mirror everyday is beyond me . You delight in the division  at the moment , your drip drip drip of nastiness may have more willing ears  to infect .  There are many on here who see straight through you though, they are just not as polite about it as me.  Now do one. 

Edited November 9, 2023 by wcorkcanary