The Billionaire Investor Myth......

[canary cherub 1]

"Running a football club is generally not a profitable business".

Except for Norwich City in the past two dismal seasons.  I make no apology for restating the figures in the 2006 Annual Report because they speak for themselves, this is about facts not opinions:

2004/5 (Prem season)      Gross profit £9,118,979         Net profit £7,618,979          Tax £1,500,000* 

2005/6                            Gross profit £3,064,814         Net profit £2,484,222            Tax £580,592

* (perhaps someone with an accounting background could explain how we arrived at a tax bill of exactly £1,500,000)

There''s precious little to show for it imo.  We''ve underachieved on the field and are still carrying a debt of nearly £20m.  Prudence?  Ambition?  No and no.

 

 

[Chunky! 0]

[quote user="Putney Canary"]Nobody has actual figures except the board. We are all presuming a lot, and some of us presume positive things about the board and some chose to presume negative things about the board.As for the scouting, it seems the manager has taken this in hand, but I feel it is something the Board should have stepped in about long ago. This is one reason why I think we should open up a new board member with football experience, someone like Stringer. The previous manager was (with hindsight) allowed to build a badly balanced squad, and seemes to have let certain things like Scouting drift. The board shouldn''t have let this happen, but didn''t understand the issues enough to step in.[/quote]I''m not sure about this, I''d always go with the position of a strong manager, as a weak manager and a "director of football" type character isn''t a particularly good situation to be in, it''s also much harder to get rid of a board member than a manager.  My opinion would be that a manager must be chosen and supported correctly, otherwise you may as well have the board member running the team and just coaches.OTBC!Chunky

[gazzathegreat 0]

Not being one with the stats - but no one has thought of exiled fans (and there are plenty of them who travel to games at Carrow Road).  I have no idea what the figure is, but must be in the thousands....

[Mr.Carrow 376]

[quote user="7rew"]As the 1,000,000 are not football fans and there are about 55,000,000 people in England -  thats about 600,000 per league club. If we remove teams whose most local rival is over 2 leagues above them (like Stockport - they barely imping on man city''s support) then that figure rises to around 800,000 - so we are on the large side.
 
We do need to attract those outside of Norfolk if we are to become a nationally recognised BIG team.  Especially looking at it from the point of view of a foreign investor (as all my posts in this thread have been trying to do)  a large captive audience - which isn''t really captive as global football brands intrude on it - is, eventually more of a hinderence to further growing the brand and making a larger return on their investment.

You talk of ambition but you are happy to limit your horizons to those in Norfolk and North Suffolk only?  I would love Norwich as part of a Big 5 clubs, for that even the support of (the football suppoting part of) 1,000,000 people is not enough.

Would you want a board that has similarly limited ambition (given what you say of this one) to say that we want to be the biggest club in Norfolk/North Suffolk?
Couldn''t we be relegated 5 times and not lose that record!
[/quote]

I think an overlooked factor in this is that City don`t even have other major sports to compete with. Leicester and Leeds are big Cities-but you are as likely to meet a rugby fan there as a football supporter. Most other areas of the country have top-class cricket,rugby,ice-hockey,speedway etc. We have none of those things.

Norwich is in the top ten retail centres in the country which indicates that people must come to the city from far and wide. If they come here to shop, why not for football?

I have actually had reason to frequently handle out-going match tickets from Carrow Rd. and believe me the amount going to Suffolk,Cambridgeshire,Lincolnshire and even Essex is extremely impressive. Norwich City is an East Anglian institution in a fantastic position to grow as a football club, which just makes the lack of ambition and "nice little Norwich" mentality which pervades the club all the more galling.

[7rew 0]

Mr.Carrow I bow to your superior knowlegde of the situation with regard to fans outside norfolk.

The thing is I don''t see that the only way to be ambitious for the club is to want the board - all the board out now.

In fact I see this as a very grave mistake!  The Turners have been

on the board for about a mouth and a half.  What message would

forcing them out send to any new investor - you''d better get new

players/turn the club around sharp - cos we won''t let you have anytime

to work your way into the job before we want you gone!  That isn''t

going to attract anyone.

In fact I''m not sure that the board is unambitious - They have not

recently been sucessful and have recently avoided large risks which is

what leads to the charge.

However they generally backed Worthington especially in the

(expensive) loan market, they tried to make a playoff push last season

with loans - then Worthington didn''t play them!  This is actually

the action of an ambitious board.

They have also brought in some new investment - 2 new directors who are

very rich and support the club - indeed are in the top 20 richest

football club owners (they have £275m - 19th placed Robert Earl of

Everton has £210m link)

My general point is that ambition can not actually be judged on

actions, particularly selectively picked ones. I have no idea what

their ambitions are, but I expect they want Norwich to do well/get

promoted as it would be good for them as well as the club.

The time to make the ambitious signings that some people on here want

is when they guarentee promotion. Many clubs have tried making them

before this point and many of them have failed (Ipswich etc.)  I

would be very worried if they said we have this ambition lets go for it

and not plan for what happens should something go wrong, as it would be

a sign we had stupid people on the board.

Add on: Just noticed a rich investor doesn''t guarentee "ambition" or

sucess - Cheltenham Town have the 9th richest ivestor in british

football! - also on the link above!

[Chunky! 0]

[quote user="mystic megson"]

"Running a football club is generally not a profitable business".

Except for Norwich City in the past two dismal seasons.  I make no apology for restating the figures in the 2006 Annual Report because they speak for themselves, this is about facts not opinions:

2004/5 (Prem season)      Gross profit £9,118,979         Net profit £7,618,979          Tax £1,500,000* 

2005/6                            Gross profit £3,064,814         Net profit £2,484,222            Tax £580,592

* (perhaps someone with an accounting background could explain how we arrived at a tax bill of exactly £1,500,000)

There''s precious little to show for it imo.  We''ve underachieved on the field and are still carrying a debt of nearly £20m.  Prudence?  Ambition?  No and no.

 

 

[/quote]I''m not entirely sure those figures on their own show alot, those are most likely profits after day to day running costs, but do they include investment in the team and facilities?  Is the annual report easily available on the web?Chris

[Putney Canary 0]

I''m not sure about this, I''d always go with the position of a strong manager, as a weak manager and a "director of football" type character isn''t a particularly good situation to be in, it''s also much harder to get rid of a board member than a manager.  My opinion would be that a manager must be chosen and supported correctly, otherwise you may as well have the board member running the team and just coaches.OTBC!Chunky I''m not sure I am suggesting a director of football, but a director who knows the sport inside out. I don''t think anyone on our board really understands the game except as fans, and as a result the words of the manager have been relied on too much. They involved Stringer in chosing PG, why not utilise him day to day? Would Stringer have let the scouting situation slide, as it appears to have done?

[Mr.Carrow 376]

[quote user="7rew"]Mr.Carrow I bow to your superior knowlegde of the situation with regard to fans outside norfolk.

The thing is I don''t see that the only way to be ambitious for the club is to want the board - all the board out now.

In fact I see this as a very grave mistake!  The Turners have been on the board for about a mouth and a half.  What message would forcing them out send to any new investor - you''d better get new players/turn the club around sharp - cos we won''t let you have anytime to work your way into the job before we want you gone!  That isn''t going to attract anyone.

In fact I''m not sure that the board is unambitious - They have not recently been sucessful and have recently avoided large risks which is what leads to the charge.

However they generally backed Worthington especially in the (expensive) loan market, they tried to make a playoff push last season with loans - then Worthington didn''t play them!  This is actually the action of an ambitious board.
They have also brought in some new investment - 2 new directors who are very rich and support the club - indeed are in the top 20 richest football club owners (they have £275m - 19th placed Robert Earl of Everton has £210m link)

My general point is that ambition can not actually be judged on actions, particularly selectively picked ones. I have no idea what their ambitions are, but I expect they want Norwich to do well/get promoted as it would be good for them as well as the club.

The time to make the ambitious signings that some people on here want is when they guarentee promotion. Many clubs have tried making them before this point and many of them have failed (Ipswich etc.)  I would be very worried if they said we have this ambition lets go for it and not plan for what happens should something go wrong, as it would be a sign we had stupid people on the board.


Add on: Just noticed a rich investor doesn''t guarentee "ambition" or sucess - Cheltenham Town have the 9th richest ivestor in british football! - also on the link above!
[/quote]

Chase used to regularly state that "Norwich has a catchment area of about 120,000 people" and i was as suprised as you are now when i looked into it and realised what an utter pile of c**p he was talking. Its been a bit of a personal hobby-horse since-sad i know......

As to the ambition thing i just totally disagree. I could see your point if the board had managed to bring in Worthy`s top targets and he had still failed. I think the players brought in over the last two seasons have been "C" and "D" list rather than "A" because of financial constraints. We went for Hulse,Howard,Morrison,Bentner etc. but in the end wouldn`t pay the going rate. Was that fourth choice left-back on loan from Everton (can`t even remember his name!) really a top Worthy target or just all he could afford at the time? Worthy regularly bemoaned the lack of strength-in-depth and cover for injuries at the club and at one point stated that the squad needed to be 5 stronger to have a chance of competing. Over the next few months it actually got weaker. All this in a period when the club has been raking in millions in parachute payments and from the sale of top players (£6.1million profit on players shown in last accounts). A club with ambition and promotion aspirations does not rely on one of the smallest squads in the division to achieve its aims.

I`m not calling for the board to go, simply to end its "obsession" with non-football activities and to focus 100% on halting the decline on the pitch. The new investment is welcome good news so i live in hope.

Nothing is ever guaranteed in football. The club are not guaranteed to make a profit on the non-football ventures that have swallowed millions in the past few years. But one thing which is as near a guarantee as you can get is that if you aim to stand still in football, you will slide backwards as more ambitious clubs jump over you.

[Chunky! 0]

[quote user="Putney Canary"] I''m not sure I am suggesting a director of football, but a director who knows the sport inside out. I don''t think anyone on our board really understands the game except as fans, and as a result the words of the manager have been relied on too much. They involved Stringer in chosing PG, why not utilise him day to day? Would Stringer have let the scouting situation slide, as it appears to have done?[/quote]Does scouting come into the realm of the first team manager?  I''d think it would since you are scouting for "his" team.  The use of Stringer to consult during the appointment of a new manager is a good idea, but I''d hope that the board handle the business operations leaving the Manager to manage the football team and associated activities.  If you have a member of the board who advises about football affairs it''s very easy to slide into a situation where you have the board against the manager because Stringer believes one approach works and the manager wants another.  This would follow most of the examples I''m aware, very few (english) clubs have made this type of setup work and traditional business practice would be that a person involved in more than one level of a business (management and directors) is not a good situation and leds to conflict.On the Stringer consultancy, it doesn''t really seem to have helped the board, they''re still taking flack from fans who believe that Peter Grant isn''t a good appointment due to his lack of experience.  However, I think that at this level, you struggle to get big names such as Curbs, O''Neil and the other dream names people wanted, since they all want to manage in the premiership, you have to either take a gamble on a young manager and give him a chance (which, even though Roy Keane is a big name, he was an inexperienced manager) or you have to settle for someone who is a lesser name.  Similar to the situation in the transfer market, we''re going to struggle to attract big names and we, as fans, have to accept that players such as Green and Ashton, will move on as soon as they''ve become big names.  Earnshaw is a lesser player, we know that, but he''s still damn good for this level.OTBC!Chunky

[7rew 0]

Thanks for the detailed reply Mr.Carrow.On the subject of surprises one thing that I feel should be more widely known about the Billionaire Investor Myth - Is that they aren''t Billionaires!Only Roman Abramovich at Chelsea and Joe Lewis at Spurs are Pound (Sterling) Billionaires, there are sveral more Dollar(US$) Billionaires, but then the dollar is a weak currency at the moment.Also we now have borad members who are among the top 20 richest football investors - according to the list of December ''04 - Indeed have £75m more than Romanov (the guy at hearts). Any incoming rich foreign investor is quite likely not to have as much money as those we have now. (proof is contained in the link in my earlier post.)

With regards to your points about backing Worthington.  The instance I was refering to were the loans of Rehman and Johannsson to try and make the playoffs.  On Boyle (everton left back) God knows where Worthy had him on the list.  The problem with backing Worthy is his radar was slightly squewed when it came to identifying players - How many of us would have even put Robinson on a list if we were asked for a list of 25 possible midfielders to buy.On Bendtner: I think that Arsenal won''t loan us players anymore after the problems with Bentley (played when not fit, risking further injury)On Morrison: This inclusion is slightly unfair - we matched Birminghams offer then Palace offered the same and he chose the club where he''d been a trainee. He stated at the time it was because of the desire to play next to AJ.On Howard: I agreed with the board that he wasn''t worth what Derby paid for him, so I can''t really throw stones on this one.On Hulse: This was a mistake. Simple as.A club with promotion ambitions may gamble on a small skillful squad of good players. make of that what you will.

[canary cherub 1]

I''m not aware that the Annual Report is available for download Chris.

The above figures are the final amounts after everything has been added and subtracted, including player transfers and interest payments on the loan. 

The breakdown for 2005/6 is as follows:

Operating profit excluding player trading   £1,566,286

Profit from player trading                             £3,046,666

Total profit                                                       £4,612,952

Plus interest receivable      £105,564            Minus interest payable      £1,653,702

Gross profit                      £3,064,814    (net profit and tax as above)

Hope this helps.

 

 

[Chunky! 0]

[quote user="mystic megson"]

I''m not aware that the Annual Report is available for download Chris.

The above figures are the final amounts after everything has been added and subtracted, including player transfers and interest payments on the loan. 

The breakdown for 2005/6 is as follows:

Operating profit excluding player trading   £1,566,286

Profit from player trading                             £3,046,666

Total profit                                                       £4,612,952

Plus interest receivable      £105,564            Minus interest payable      £1,653,702

Gross profit                      £3,064,814    (net profit and tax as above)

Hope this helps.

 

 

[/quote]£3 million isn''t an awful lot of profit, the question then becomes whether or not that is passed back as a dividend or made available for player transfers?  I guess its no conindence that the final profit isn''t almost the same as the profit from player trading.  If Norwich is a PLC then the accounts should be available from company house, whether its as easy as just going to the website is another matter entirely thought.OTBC!Chunky

[canary cherub 1]

Chunky! wrote: "£3 million isn''t an awful lot of profit".

£3 million is a very substantial profit for a Championship club.  Birmingham only made £3 million profit in their last Prem season, compared with our £9 million plus.  Football is not like an ordinary business.  The primary aim is not the maximisation of profit.

God only knows what''s happened to it.  We certainly didn''t invest our "profits from player trading" back into the squad last summer.  We didn''t even spend the proceeds of the sales of Green and McKenzie, and the outcome was entirely predictable.

 

[Mr.Carrow 376]

[quote user="7rew"]Thanks for the detailed reply Mr.Carrow.

On the subject of surprises one thing that I feel should be more widely known about the Billionaire Investor Myth - Is that they aren''t Billionaires!

Only Roman Abramovich at Chelsea and Joe Lewis at Spurs are Pound (Sterling) Billionaires, there are sveral more Dollar(US$) Billionaires, but then the dollar is a weak currency at the moment.

Also we now have borad members who are among the top 20 richest football investors - according to the list of December ''04 - Indeed have £75m more than Romanov (the guy at hearts). Any incoming rich foreign investor is quite likely not to have as much money as those we have now. (proof is contained in the link in my earlier post.)


With regards to your points about backing Worthington.  The instance I was refering to were the loans of Rehman and Johannsson to try and make the playoffs. 

On Boyle (everton left back) God knows where Worthy had him on the list.  The problem with backing Worthy is his radar was slightly squewed when it came to identifying players - How many of us would have even put Robinson on a list if we were asked for a list of 25 possible midfielders to buy.
On Bendtner: I think that Arsenal won''t loan us players anymore after the problems with Bentley (played when not fit, risking further injury)
On Morrison: This inclusion is slightly unfair - we matched Birminghams offer then Palace offered the same and he chose the club where he''d been a trainee. He stated at the time it was because of the desire to play next to AJ.
On Howard: I agreed with the board that he wasn''t worth what Derby paid for him, so I can''t really throw stones on this one.
On Hulse: This was a mistake. Simple as.

A club with promotion ambitions may gamble on a small skillful squad of good players. make of that what you will.
[/quote]

You are right to point out that when we fail to sign players it is not always down to the money factor, but the list i gave was one off the top of my head-we have been linked with dozens of players in the last few years and it always seems as though when a transfer fee is likely to be more than a few £100k everything goes quiet. Obviously you have to treat speculation with skepticism but i really don`t think that had we been prepared to pay the going rate for players like Halford and Eastwood we would be in the position we are now. I have to remind you that Robinson was signed during a midfield injury crisis only because of a £50,000 director loan because the budget was spent out. I dont think we can expect to find the next Ashton or Hucks when we are scrabbling around in the bargain bin like that.

I think that Worthy was trying using a large part of his budget to keep the best players at the club and use what little remained to strengthen the squad. When he spent decent money on players he bought pretty well-his most abject failures were cheap or free and as i have said i believe these were pretty much all he could afford at the time. He stated that he needed a squad 5 players stronger but if you only have a few £100k to spend can you really expect 5 top notch players to be brought in?

Anyways.....Interesting stuff about the Turners and some very interesting rumours doing the rounds. Fingers crossed that things have changed-i will be the first to congratulate the board if this proves to be the case.

[Chunky! 0]

[quote user="mystic megson"]

Chunky! wrote: "£3 million isn''t an awful lot of profit".

£3 million is a very substantial profit for a Championship club.  Birmingham only made £3 million profit in their last Prem season, compared with our £9 million plus.  Football is not like an ordinary business.  The primary aim is not the maximisation of profit.

God only knows what''s happened to it.  We certainly didn''t invest our "profits from player trading" back into the squad last summer.  We didn''t even spend the proceeds of the sales of Green and McKenzie, and the outcome was entirely predictable.

 

[/quote]Was it set aside for transfer fees and not used though?  I doubt it was redistributed as dividends though since some of the fans associations are shareholders and hence would know about it.  I''d have said beforehand that £3 million for a company with a turnover like Norwich''s was a small one, but you leanr something new...