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Easy guide Canary Accounts

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Many comments have been aired re financial affairs. As someone with some experience of company accounts I thought I would summarise last 4 years which I hope will be easy to follow for the average fan. The figs are in £million.

Income                          2004            2005         2006         2007

Gate Receipts                    5                  8               8               8

FA/League/Sky                 1                 21              8               8

Catering                            3                   3              4               3

Commercial                       4                   5              4               4

Sundry                              3                   1              1               1

Player Trading                                                         6               3

Profit on Land sale            4

Total Income                  20               38              31             27

Expenditure

Staff Costs/Wages           12                17               15           14

Operating Exps                 6                  8                  7            7

Interest                             2                  2                  2            2

Depreciation                     2                  3                  5            4

Total Costs                   22                 30                29          27

Profit(Loss-)                 -2                    8                 2             0

Assets

Ground                         30                   33               35           37

Player Registrations        2                     5                 4             4

Debtors/Cash                7                      9               10            10

Total Assets                 39                    47               49           51

Liabilities

Receipts in advance         6                      6                 7              8

Creditors                        6                      8                  9              7

Loans/Bank overdraft     5                      5                   4             7

Long Term Loan           14                     14                13            13

Total Liabilities          31                     33                 33           35

Shareholders Funds     8                      14                16            16

1) The income for 2008 will drop to around 20 million due to loss of SKY payment.

2) There is little evidence that outgoings will significantly reduce so there could be a large shortfall.

3) Since accounts were prepared a nett 3 million has been received on transfers. With careful control the club should be able to finance its normal activities in the short term particularly as further monies are expected from land sales - providing property market does not deteriorate.

4) There appears to be little scope for funds for new players. Any sale of the current squad, as we all know, will bring in very little.

5) The blindingly obvious problem is players wages. A frequent question posed is why do not local businesses, and for that matter Delia, put in more money. Why should they when very mediocre players are paid ridiculous amounts and employ agents who have no loyalty to Norwich City FC.

Hope I have helped. Tried to keep it as short as I can !!!!!

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Thanks for that-i`m sure it will help some people get a bit of understanding as to what all this financial chat is about.

The only point i would take up is point 5. Overall wages were still very high at £14million but within that player wages reduced to £7.4million-only slightly higher than when we were promoted. To me it is obvious that player wages were not a big problem, it is the spiralling non-football wages which should cause concern.

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Having seen my figures there seems to be a bit of a cockup on alignment between me and the Pink Un. I think the best way to understand it is to add up the figures so that they agree !!!!! It now looks as if it is a "genius guide" to the Canary accounts. I will try to answer any queries.

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Thanks Mr Carrow. Looking through all the bumpf I agree with your figures. The non-football wages certainly look high but I assume a fair amount is in connection with commercial/catering services. I notice that the Club have recently taken out a loan for £1.3 million to finance office development which typically suggests there is an air of extravagance which somebody needs to get to grips with.

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Thanks VOS It helps us see our way through the club spine You and Mr C should get together and help the NCPLC board.

FOOTBALL MUST COME FIRST

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Vos much appreciated for your efforts.

Do the accounts show the number of non-football staff at the club over the years, and can we say anything about how much they recevied as individuals?

Also has any dividend or fees been paid to shareholders and directors?

 

YH

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A few thoughts:

1. Why is depreciation so high? The only significant fixed asset is the ground and that is shown as appreciating in value, so what is depreciating to such an extent as is leaking £4m a year?

2. Interest looks high on the amount of loan. Add together overdrafts and long term loans you get to £20m with interest of £2m- that''s a rate of 10% a year. If Delia''s loan is interest free, then that will increase the rate effectively being paid on the rest.

3. What about Colney- presumably thats freehold and has a value?

4. If Player registrations is a capital valuation of potential transfer fees we are shockingly short and this shows the academy is not turning out what we need. We MUST get back to the situation where every couple of years we could get big money for a youth player. The only recent one is Rob Green. We clearly cannot survive on tranfers alone, so investment must be made into the youth system. Southampton sold Walcott and Bale for an alleged total of £17m in the last 18 months or so.

5. Apart from 4 the only significant possibility looks to be a sale and leaseback of the ground. That would be too horrific to contemplate as ground ownership is the only thing keeping the club solvent

 

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Many thanks vos.  A couple of comments.

The ratio of players wages to turnover fell last season from 36% to 31%.  Total wage/turnover ratio was 53.3%.  The average for the Champ for 2006 according to the Deloitte report was 72%.  Whilst I agree that football wages are ridiculous, the proportion of our income that goes on wages must be one of the lowest in the division.  If "the group''s principal activity is that of a professional football club" we have to stop moaning and get on with it. 

I think it''s also worth pointing out that in the modern era footballers are not just employees who produce a product.  They ARE the product, in the same way that pop musicians and movie actors are.  Therefore it is not possible to make a straight comparison between what they earn and what you or I earn.  We don''t have to like it but there''s no point moaning and groaning, and the board should refrain from playing the envy card as often as they do.

Of much greater concern to me is the size of our borrowing, the amount of debt we have incurred through speculation in land, and the associated infrastructure costs that go with it.  We are promised that such investments are good for the club but I have yet to see the evidence.  Borrowing to replace the South Stand was unavoidable, but only because the hoped-for returns from the land behind the River End did not materialise (see 2003 Annual Report).  The fact that we borrowed so heavily in 2003 that we apparently couldn''t afford to sign Darren Huckerby without financial assistance from elsewhere, even though his signing was as near as you will ever get to a cast iron guarantee of automatic promotion, says it all about the club''s sense of priorities imo.

 

 

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This £1.3m loan to fund office expenditure.

I''d like to ask a few questions about that. Has it ever been mentioned before? What''s it going on, and is it really necessary?

Because it would pay for a new centre-back.

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Sorry, and added to my earlier post, I accept the need to tighten player wages upon relegation.

Buut the non-playing staff (ie not related to football) shouldn''t be extravagant to the point of being detrimental.

These issues DO ring some bells from before and, while the scale of activity and immediacy of the problem is not an issue comparable to the days of Chase, the philosophy behind it sadly feels worryingly similar.

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On the subject of comparing Deloittes review and the accounts:  I do not believe the figures to be comparable as the discrepencies from the average are to big to be credible.All percentages have been discounted to remove our contribution.Our income: £27mAve. Income of other clubs: £12.65mAve. Income of other clubs, not including parachute payments: £11.1mOur player wage percentage: 31%Our player wage bill: £8.37mOther clubs ave. player wage percentage: 75%Other clubs ave. player wage bill: £9.55mThis shows up two things:1) we have been underpaying on player wages - but not to the extent that people have been infering, we should not be paying twice the wage bill. - Still this does worry me.2) Where are we getting our income from?  Even removing parachute payments and player sales we still have an income 150% of the average income, which (if comparable) includes 5 sets of parachute payments and all income made on player sales by other clubs.  How are we managing this? Our crowds while high they are not that much higher than average (~25k compared to ~18k or 138%) so we are making considerable money somewhere inexcess of our competitors.The second leeds me to the conclusion that I would very much like to see the basis upon which both sets of figures were calculated, as something seems screwy - And due to my personality, I don''t like to accept any mathematically based arguement without knowing that all figures compare were compiled in a fair way.

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[quote user="Tumbleweed"]

1. Why is depreciation so high? , so what is depreciating to such an extent ?

 

 

[/quote]

Darren Huckerby

jas :)

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as many of you know some space at carrow road has been made into offices already, broadland housing association actually hav ther r main headquaters based at carrow road this is in turn generating a incom for NCPLC, so my guess is the 1.3mill loan is to turn more space into offices to allow more companies to work from carrow road thus generating more income, with the size of broadland hpusings organization i reckon there rent on these offices must be quite high, so if you get several more offices out of carrow road spare space then its gonna generate a income,  say 10 firms all paying a average of £1000 a month for a small office space equals 10,000 a month thats 120,000 a year income but we all know that prime office space at carrow road is gonna be a ot more then a £1000 a month, plus with the size of the organiation at broadland housing i reckon there more then paying a few thousand a month for there office space,so if the 1.3 million loan makes office space that is then rented out the loan pays for its self and is cleared quickly

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[quote user="derehamcanary_fan"]as many of you know some space at carrow road has been made into offices already, broadland housing association actually hav ther r main headquaters based at carrow road this is in turn generating a incom for NCPLC, so my guess is the 1.3mill loan is to turn more space into offices to allow more companies to work from carrow road thus generating more income, with the size of broadland hpusings organization i reckon there rent on these offices must be quite high, so if you get several more offices out of carrow road spare space then its gonna generate a income,  say 10 firms all paying a average of £1000 a month for a small office space equals 10,000 a month thats 120,000 a year income but we all know that prime office space at carrow road is gonna be a ot more then a £1000 a month, plus with the size of the organiation at broadland housing i reckon there more then paying a few thousand a month for there office space,

so if the 1.3 million loan makes office space that is then rented out the loan pays for its self and is cleared quickly
[/quote]

This is, of course, fair enough.

But could it have gone on a centre-back instead?

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[quote user="mbncfc"]

[quote user="derehamcanary_fan"]as many of you know some space at carrow road has been made into offices already, broadland housing association actually hav ther r main headquaters based at carrow road this is in turn generating a incom for NCPLC, so my guess is the 1.3mill loan is to turn more space into offices to allow more companies to work from carrow road thus generating more income, with the size of broadland hpusings organization i reckon there rent on these offices must be quite high, so if you get several more offices out of carrow road spare space then its gonna generate a income,  say 10 firms all paying a average of £1000 a month for a small office space equals 10,000 a month thats 120,000 a year income but we all know that prime office space at carrow road is gonna be a ot more then a £1000 a month, plus with the size of the organiation at broadland housing i reckon there more then paying a few thousand a month for there office space,

so if the 1.3 million loan makes office space that is then rented out the loan pays for its self and is cleared quickly
[/quote]

This is, of course, fair enough.

But could it have gone on a centre-back instead?

[/quote]

Wouldn''t be very commercially prudent would it?

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a center would only improve the team eventually getting us into the premiership... this could take years so instead lets take out a loan for a quick fix now by turning the bogs in the river end in to a gymnasium...

 jas :)

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[quote user="mbncfc"]

[quote user="derehamcanary_fan"]as many of you know some space at carrow road has been made into offices already, broadland housing association actually hav ther r main headquaters based at carrow road this is in turn generating a incom for NCPLC, so my guess is the 1.3mill loan is to turn more space into offices to allow more companies to work from carrow road thus generating more income, with the size of broadland hpusings organization i reckon there rent on these offices must be quite high, so if you get several more offices out of carrow road spare space then its gonna generate a income,  say 10 firms all paying a average of £1000 a month for a small office space equals 10,000 a month thats 120,000 a year income but we all know that prime office space at carrow road is gonna be a ot more then a £1000 a month, plus with the size of the organiation at broadland housing i reckon there more then paying a few thousand a month for there office space,so if the 1.3 million loan makes office space that is then rented out the loan pays for its self and is cleared quickly[/quote]

This is, of course, fair enough.

But could it have gone on a centre-back instead?

[/quote]yes it could but in the longer picture a cb would cost more then just the 1.3 mill loan, rather then make money like the office rent will in the long run

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[quote user="derehamcanary_fan"][quote user="mbncfc"]

[quote user="derehamcanary_fan"]as many of you know some space at carrow road has been made into offices already, broadland housing association actually hav ther r main headquaters based at carrow road this is in turn generating a incom for NCPLC, so my guess is the 1.3mill loan is to turn more space into offices to allow more companies to work from carrow road thus generating more income, with the size of broadland hpusings organization i reckon there rent on these offices must be quite high, so if you get several more offices out of carrow road spare space then its gonna generate a income,  say 10 firms all paying a average of £1000 a month for a small office space equals 10,000 a month thats 120,000 a year income but we all know that prime office space at carrow road is gonna be a ot more then a £1000 a month, plus with the size of the organiation at broadland housing i reckon there more then paying a few thousand a month for there office space,

so if the 1.3 million loan makes office space that is then rented out the loan pays for its self and is cleared quickly
[/quote]

This is, of course, fair enough.

But could it have gone on a centre-back instead?

[/quote]

yes it could but in the longer picture a cb would cost more then just the 1.3 mill loan, rather then make money like the office rent will in the long run
[/quote]

Or he could be sold on for a massive profit a la Ashton, Francis, Earnshaw, Etuhu etc.

This does genuinely seem to reflect the prevalent attitude at the club though, so don`t be suprised if the pitch is used to grow high-value biofuels.......

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I note the arguments but NCFC is a football club not an office leasing company.  Its been my opinion for a long time that there are too many ''other'' activities at Carrow Road.  If as indicated the non football related wages are too high this means that whilst there is a lot of other activity it is not generating massive profits but is generating large costs.  What is needed at Carrow Road is a radical look at all the operations and a judicious pruning of some of the departments. e.g How big does the media department need to be? How many chiefs do we need?.   If the fact that we are leasing office space is seen as being a good thing(and I believe it to be a very bad thing) - why don''t we just concrete over the pitch and build a large hotel or several office blocks.  In my book we need to look after the core activity - FOOTBALL and forget the rest.

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Thanks for all the useful contributions. I will now try to answer all the queries. Don''t forget there is a certain amount of rounding up/down etc.

1) The number of non-football staff is around 130. Football staff 75.

2) No dividends paid to shareholders. No fees to directors apart from Roger Mumby''s company paid £25k to compensate for his absences on Club work. By the way the Ipswich Town chairman takes out around £150k - probably more by now !!!

3) Depreciation.   £1.3 million on freehold property £0.2 million on plant and machinery. Under this heading I have also included £2.2 million amortisation of players registration which I take it is a procedure to write down values of players. This total sum of around £4 million is set off against profits to reduce tax.

4) Interest. £1 million is in respect of the large loan. Average rate is 7.4%. £0.6 million is interest on other loans/overdrafts. The directors have never charged interest on their loans. It would appear that nearly all the property assets are charged as security including the nearby development land and Colney.

5) The argument re using spare space for office development is well made and makes financial sense.

6) Assuming a playing squad of some 35 senior players then they are paid on average around £200k p.a. Those of us who probably think they see better footballers on the local parks will consider this as excessive but that''s the market rate. Bear in mind a fit athlete who can kick with one foot and score 10 goals a season in the premiership is paid £200k or more per week.

7) I would suggest it is not easy to compare finances with other clubs as each situation varies so much. BUT the directors must be devastated that having established a "premiership set up" as we have at Carrow Road they find themselves with a worse team than Colchester United !!! As they say that''s football.

Finally I think one big problem here is that Delia has surrounded herself with some fairly competent modern business professionals who understandably have pursued "modern ideas" and made full use of any asset available. Unfortunately on the football side - dare I say it - we have lacked the shrewdness of a Robert Chase and successive managers have dealt very poorly in the transfer market where a lot of money has been wasted. Before anyone says it,  yes I know the world of football has considerably changed (for the worse) since the days of the aforementioned.

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[quote user="fleggy"]I note the arguments but NCFC is a football club not an office leasing company.  Its been my opinion for a long time that there are too many ''other'' activities at Carrow Road.  If as indicated the non football related wages are too high this means that whilst there is a lot of other activity it is not generating massive profits but is generating large costs.  What is needed at Carrow Road is a radical look at all the operations and a judicious pruning of some of the departments. e.g How big does the media department need to be? How many chiefs do we need?.   If the fact that we are leasing office space is seen as being a good thing(and I believe it to be a very bad thing) - why don''t we just concrete over the pitch and build a large hotel or several office blocks.  In my book we need to look after the core activity - FOOTBALL and forget the rest.[/quote]thats the stupidest comment yet building on the pitch, so wat do u suggest they do with all the empty space then cos empty space generates no income, office space does if rented out to companies,

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dereham we have borrowed and borrowed and borrowed again to supposedly generate income.  But before that happens the costs of construction have to be paid off, as does the interest on the loan.  There are times when developments of this kind are worthwhile, but this is definitely not one of them. 

Not only are other revenue streams not supporting the football side, the reverse is true at the moment.  Last season we spent £1.2m on building a road, to meet our obligations relating to the land we''ve purchased.  How do you think that was paid for?  (Clue: we got £1.2m more from selling players than we spent on replacing them.)

The board can''t seem to help themselves.  As soon as they pay off one loan they take out another, and there''s an increasing air of desperation.  The ''tight ship'' SS Norwich City is leaking.  As soon as they plug one hole, another one opens up.  They''re desperately scratching around for ways to get themselves out of the hole they''ve dug for themselves, like a compulsive gambler trying to recoup their losses.  The club is at tipping point imo.

 

 

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Dereham - if you would read my post properly you will see that I am not(repeat NOT) advocating building on the pitch.  It was a sarcastic comment aimed at those who have this very strong desire to involve Norwich City in NON - footballing activities.  Maybe aall the muppets aren''t on the City staff.

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[quote user="fleggy"]Dereham - if you would read my post properly you will see that I am not(repeat NOT) advocating building on the pitch.  It was a sarcastic comment aimed at those who have this very strong desire to involve Norwich City in NON - footballing activities.  Maybe aall the muppets aren''t on the City staff.[/quote] i notice you quite happy to insult me yet fail to answer a question as to what you would have done with the spare space,

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You haven''t read (or at least not understood) this latest post either - there is no spare space - the original proposition was purely hypothetical.  I would think it very difficult to insult you.

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[quote user="fleggy"]You haven''t read (or at least not understood) this latest post either - there is no spare space - the original proposition was purely hypothetical.  I would think it very difficult to insult you.[/quote]

Relax Fleggy. He/she can''t even be ars*d to punctuate his/her meanderings.

I gave up reading him/her some time ago.

Dereham. As a town you have a lot to answer for.

OTBC

 

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