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YankeeCanary

Norwich Financial Issue May Pale Into Insignificance

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Yes, this is a forum for NCFC, however, what is going on in world financial markets currently has the potential to impact highly leveraged football clubs in England ( particularly Premiership members ) in such a way that the Norwich ability to manage its debt may pale into insignificance in comparison.

The comments by FA Chairman Lord Triesman spoke to the estimated 3 billion debt currently outstanding within English football clubs. I don''t know what the total debt is of the non-Premiership teams but, at an absolute guess, one would be hard pressed to believe that it anything more than 25% of that total. This would mean that the huge amount that is the remainder is generally spread across the Premiership clubs. You can do the maths as well as I can. It averages over 100 million per club, although the last reported estimate was that the top four clubs accounted for 950 million. This would still mean the remainder would average over 80 million each. 

With the financial markets imploding around the world and cash liquidity drying up it is no surprise to hear this kind of reaction from Lord Triesman. He states that the "toxic" debt load being carried by English football clubs is a greater risk and more frail than at any time in history. He further stated that the only way the high transfer fees and salaries have been sustained up to now is due to the revenue from broadcast rights   

The way some posters express their viewpoint on this site suggests they think that football is a passion more important than life itself. Such posters may, in the coming few years, encounter some hard reminders confirming that not to be the case. Further, if the current financial crisis escalates, there may be surgery conducted across the world of English football clubs that is unprecedented.

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Well YankeeCanary I don''t see it that way.

 There is no point in calling in a debt if it cannot be paid or if the underlying asset is worthless. The only use for a football ground is for building and who wants to build houses or flats in this difficult time and in any case it is doubtful if the City Councils would give planning permission for such a use of the "open" spaces.

There well may be an exit of some of the foriegn players from the UK but it is doubtful they will do any better in other countries so on the whole I think the majority will stay and join the 4,000 (Yes 4,000) new imigrants a day who are flooding into the UK. As long at one can buy a ball, or a pigs bladder, young men and boys will always play football and others will always turn up to watch.

Some games that need expensive kit may go to the wall but football, as we know it in England, will always be played in the streets, in the fields, on pieces of waste ground and TV with their hours to fill will always be there with the cameras.

 

 

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[quote user="Bobert"]

Well YankeeCanary I don''t see it that way.

 There is no point in calling in a debt if it cannot be paid or if the underlying asset is worthless. The only use for a football ground is for building and who wants to build houses or flats in this difficult time and in any case it is doubtful if the City Councils would give planning permission for such a use of the "open" spaces.

There well may be an exit of some of the foriegn players from the UK but it is doubtful they will do any better in other countries so on the whole I think the majority will stay and join the 4,000 (Yes 4,000) new imigrants a day who are flooding into the UK. As long at one can buy a ball, or a pigs bladder, young men and boys will always play football and others will always turn up to watch.

Some games that need expensive kit may go to the wall but football, as we know it in England, will always be played in the streets, in the fields, on pieces of waste ground and TV with their hours to fill will always be there with the cameras.

 

 

[/quote]

True - but the big owners can start by simply scaling back on the amount they pump into just keeping these clubs afloat. One day the penny will drop in that only four clubs can get to The Champions League with the rest (clubs like West Ham for instance) realising that the £M''s they have paid in originally to buy the club has got them absolutely nowhere by way of investment return. They will then withdraw their money and move on to the next ''toy''.

Yankee is right in his assesement IMO. I have said for years now that the football gravy train of TV money will implode at sometime and leave many clubs badly scarred and totally unable to carry on the current extraordinary lavish lifestyles. Scudamore insists that ''it will never stop increasing'' (the size of Premier League TV deals), what an absolute fool he is. Sounds just like all those blinkered souls who mortaged up to the hilt and thought the same about property!

That is why I for one do not necessarily welcome PC or similar to come charging to our rescue. Why? Fans will simply see that as justification for us to join this mad rush for the golden land of The Premier and will want £M''s lavished on wages and transfer fees. To survive longer term NCFC need to focus on slashing expenditure to match total income and get back to basics. That means making the Academy and the youth system No.1 priority and also go back to scouring lower leagues and / or fringe players at Premiership clubs. We''ve done it before - yes the game has changed hugely in financial terms since then but the wheel will turn back again and we need to be positioning the club in advance of that.        

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Does anyone know when negotiations are due to start for the next TV deal? It will be interesting to see how much Sky will be willing to pay if people start cancelling their subscriptions due to the economic downturn we may experience over the next two to three years.

I do wonder if we may have missed the boat in terms of bringing in a rich investor. The multi billionaires, such as those who took control at Manchester City, will still be interested because for them it''s all about power and prestige rather than making money. But I do wonder whether the Mike Ashleys, Marcus Evans'' and, dare I say it, Peter Cullums of this world will still be looking into investing in a football club.

[quote user="Bobert"]

There well may be an exit of some of the foriegn players from the UK but it is doubtful they will do any better in other countries so on the whole I think the majority will stay and join the 4,000 (Yes 4,000) new imigrants a day who are flooding into the UK.

[/quote]

I don''t want an argument or to derail this thread, but can I ask where this statistic comes from and whether it is net of those leaving the UK. Cheers.

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Football in general is very vunerable and most likely to feel the backlash of the current financial problems.

Footballers'' wages and agents'' commission are the biggest expenditure for most clubs, in fact they mirror the problematic housing market insomuch as house prices kept rising beyond the affordability of the general public, this was of course unsustainable but few would accept it as being so, now of course the bubble has burst !

Now with football clubs'' outgoings more than the gate revenue by the aforesaid players/agents continually creaming off ever more and more the football bubble will also burst. Furthermore watching football whether live or by TV is a luxury expenditure and the pennies now poured into them will be siphoned off to pay for rising fuel costs and increased cost of living expenses. Sky subscriptions will undoubtedly fall and their input to the game will be reduced.

Those clubs operated prudently and with sensible wage structures will be the ones that emerge from all of this best for sure !

 

 

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No one will come out of the current economic financial disaster scot free. The bigger the debt the harder they will fall.

Everyone in future will find credit harder to come by and more expensive whether it be mortgages, cars, football clubs...

The trouble with big business is that it borrows in the short term assuming that it will be able to renegotiate that debt when it comes up for renewal....a bit like taking out a fixed term, interest repayment-only mortgage on a house.

However, the only way banks can lend in the short term is to get people back to saving in banks so the banks can then lend it on to others and they will be looking for repayment of that loan rather than just paying the interest only off.

Banks and governments have been doing exactly what they tell us not to do...living outside their means. And football clubs are the worst offenders of this. There was an article on Portsmouth in the papers last week where they reckon they are £60million in debt and need to repay some of it ASAP. Their total income in a season is £65 million of which £60 million is spent on wages alone...there is no way that is sustainable in the medium term.

I''d be very surprised if one club somewhere in the UK doesn''t go bust by the end of the season!

 

 

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[quote user="Yellow Rider"]

That is why I for one do not necessarily welcome PC or similar to come charging to our rescue. Why? Fans will simply see that as justification for us to join this mad rush for the golden land of The Premier and will want £M''s lavished on wages and transfer fees. To survive longer term NCFC need to focus on slashing expenditure to match total income and get back to basics. That means making the Academy and the youth system No.1 priority and also go back to scouring lower leagues and / or fringe players at Premiership clubs. We''ve done it before - yes the game has changed hugely in financial terms since then but the wheel will turn back again and we need to be positioning the club in advance of that.        

[/quote]

How true this is....I for one, and as a supporter going back to the early ''60s, would no more wish to see our club struggling in the middle of the Premiership living above its means and getting further and futher in debt as we get increaingly frustrated by the defeats against the lower tier of the league preventing us getting just that little bit closer to the new promised land of Champions League. Interestingly even UEFA Cup football is now viewed in many circles as a poisoned chalice. How long before teams start to put out a "Carling Cup strength" side for such games.

I see the best contribution that Peter Cullum or anyone else can have is to put the club on a stable financial footing which means we are no longer counting the beans at the end of each month to see if the doors can be kept open. From that point we can start to build from the roots of the Academy and the lower leagues and build a club and a side that we can all be proud of and feel that it achieves whatever it achieves on merit and through operating in a sensible and sustainable manner. That way if we do reach the Premiership we have arrived and will stay there based on the efforts of everyone involved rather than the wallet of one person who can remove their patronage at any time.

But will it ever happen.....?

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[quote user="C T wants the board out"]

[quote user="National express super guard "]a lecture on financial matters from america. oh the irony.
[/quote]

lmao

[/quote]

Rather than lmao-ing CT why not read Yankee''s post and give us your opinions on it [:^)]

On a separate note I believe we''ve been saved from impending financial doom now that our fearless leader has given the banks £500bn of our money to bail them out. All in order to save some of the wealthiest people in the country from the consequences of their investment decisions in the free market, that they have lectured politicians and the general public on for decades. And now if I go down to Lloyds to arrange a mortgage to buy a house they can lend me my own money back and charge me interest for the privelege [:''(]

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[quote user="Shack Attack"][quote user="C T wants the board out"]

[quote user="National express super guard "]a lecture on financial matters from america. oh the irony.
[/quote]

lmao

[/quote]

Rather than lmao-ing CT why not read Yankee''s post and give us your opinions on it [:^)]

[/quote]

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

 

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[quote user="Potless Percy "][quote user="Shack Attack"][quote user="C T wants the board out"]

[quote user="National express super guard "]a lecture on financial matters from america. oh the irony.
[/quote]

lmao

[/quote]

Rather than lmao-ing CT why not read Yankee''s post and give us your opinions on it [:^)]

[/quote]

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

 

[/quote]

But Yankees post is about a current news item  Potty..

 

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[quote user="Potless Percy "]

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

[/quote]

You two really need to get a room [;)]

I appreciate why it may have come across that way to some but I still think that he made a couple of decent points. It certainly deserved more than the standard "he he aren''t Americans stooopid" riposte.

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[quote user="knitting nancy"][quote user="Potless Percy "][quote user="Shack Attack"][quote user="C T wants the board out"]

[quote user="National express super guard "]a lecture on financial matters from america. oh the irony.
[/quote]

lmao

[/quote]

Rather than lmao-ing CT why not read Yankee''s post and give us your opinions on it [:^)]

[/quote]

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

 

[/quote]

But Yankees post is about a current news item  Potty..

[/quote]

Read the thread title and the concluding paragraph of the OP Nitty . . .

 

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The figure of 4.000 imigrants a day comes from the International Edition of the Daily Express that was published in Western Australia yesterday (Tuesday). It quotes the National Statistics Office as saying that 1,437,000 migrants arrived in the twelve months to June 2006 which is equivalent to 3,937 people arriving each day.These are short term migrants who stay for less than 12 months.

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[quote user="Potless Percy "][quote user="knitting nancy"][quote user="Potless Percy "][quote user="Shack Attack"][quote user="C T wants the board out"]

[quote user="National express super guard "]a lecture on financial matters from america. oh the irony.
[/quote]

lmao

[/quote]

Rather than lmao-ing CT why not read Yankee''s post and give us your opinions on it [:^)]

[/quote]

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

 

[/quote]

But Yankees post is about a current news item  Potty..

[/quote]

Read the thread title and the concluding paragraph of the OP Nitty . . .

 

[/quote]

http://www.telegraph.co.uk/sport/3154984/Lord-Triesman-and-Richard-Scudamore-on-collision-course-Football.html

But I find some of what he says a bit much considering the FA put their name on the Premier League.

 

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Have West Sham paid as all the money for Greeno and Ashton? Seems like they are most at risk according to the press today!

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[quote user="National express super guard "]a lecture on financial matters from america. oh the irony. [/quote]Maybe a puntuation lesson was in order?

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[quote user="Bobert"]The figure of 4.000 imigrants a day comes from the International Edition of the Daily Express that was published in Western Australia yesterday (Tuesday). It quotes the National Statistics Office as saying that 1,437,000 migrants arrived in the twelve months to June 2006 which is equivalent to 3,937 people arriving each day.These are short term migrants who stay for less than 12 months.[/quote]Well if it was in the Daily Express then it must be true! They surely wouldn''t want to whip up xenophobia over immigration by being selective with their figures, would they?

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Hardly any club is safe at present, even giants like Man U & Liverpool are at risk..... and if I were a Chelsea fan I would be sweating slightly.  They are owned by the 15th richest man in the world yet they carry some of the largest debt in the league??  Has Abramovic actaully spent any money?  If Lehman can go under anyone can (I work in that building at Canary Wharf and it''s sobering going in to a very empty feeling building).  Football has been riding high for years now, never thinking the pot of gold will dry up, I for one hope it does and then maybe, we can have our game back and clubs can live within their means because all he money leaves football anyway. Having said that, Triesman really is in no position to lecture on debt with the FA in debt to more than 3 times the average club is.  Glass houses, stones etc.

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Certainly no one should go throwing stones at our lovely glass house. It cost £150,000 don''t ya know!

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National express super guard : a lecture on financial matters from america. oh the irony.

lmao

 

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

---------------------------

Agreed.

Cranky Yanky should be more concerned about the Trillions and Trillions of US$ the USA is in debt.

 

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The American is right. For all the irrecoverability of the debt, do not ever believe that it will leave the football club unscarred. Suppose for a minute that West Ham were to be placed into administration (this is not at all far fetched).

Turnover for 2007 wais £57m (i.e gate receipts, TV money etc). Admin expenses, including player wages, and spreading of player contract fees over the life of the contract, was £60m. In total, they lost nearly £20m last year after tax.

Intangible assets (i.e. player registrations) had a recorded cost of £35m, and tangible assets had a recorded cost of £89m. Total debts were nearly £100m (although this was reduced by October 2007 by £26m)

If they got placed into administration tomorrow, the first thing that would be done would be the squad being put up for sale. You might be able to raise £50m doing that (don''t forget, they''d be in a very weak position). Then the ground would get sold, and possibly leased back. What wouldn''t happen is the shareholders pumping a whole load more money in to prevent any of this happening. And its not like an Ipswich Town situation, where they own nothing of value and so the loans get passed on very quickly at a huge discount instead of being called in.

In short, this is very serious. An awful lot of Premier League clubs survive on the gift of their owners (the £26m debt reduction above was largely achieved by converting shareholder loans to equity - sound familiar?). The owners are no longer in the same position as they used to be, so expect some major changes in the world of football. Who knows. Even we may be able to compete again.

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[quote user="Canary Nut"]

National express super guard : a lecture on financial matters from america. oh the irony.

lmao

 

I''ll save you the trouble.  Yankee''s post is a thinly disguised excuse to have a go at certain posters he doesn''t agree with. Variation on the same old theme in other words.

---------------------------

Agreed.

Cranky Yanky should be more concerned about the Trillions and Trillions of US$ the USA is in debt.

 

[/quote]

and agreed here!

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[quote user="Bobert"]The figure of 4.000 imigrants a day comes from the International Edition of the Daily Express that was published in Western Australia yesterday (Tuesday). It quotes the National Statistics Office as saying that 1,437,000 migrants arrived in the twelve months to June 2006 which is equivalent to 3,937 people arriving each day.These are short term migrants who stay for less than 12 months.[/quote]

oh be very careful Bobert. Don''t upset the yoghurt eating, cardigan wearing Guardian reading PC brigade or you''ll have to undergo Diversity refresher training to make you think straight. You forget, there are issues that are forbidden to discuss in the UK. Obviously the Daily Express are trying to whip up hysteria in Oz about levels of immigration into the UK.

Rockingham Beach, Kings Park, The Swan River, Freemantle Harbour, East Perth AFL, and the SUN! You are so lucky, the only thing you are missing is NCFC, an that ain''t much at the moment!

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Oh Jesus, now I''m a yoghurt-eating Grauniad reader just because I questioned the Daily Express as an objective source!

Must dash, I''m off to my pilates class.

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[quote user="Grando"]Oh Jesus, now I''m a yoghurt-eating Grauniad reader just because I questioned the Daily Express as an objective source!

Must dash, I''m off to my pilates class.[/quote]Then some mung beans afterwards!

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[quote user="Barclay_Boy"]

oh be very careful Bobert. Don''t upset the yoghurt eating, cardigan wearing Guardian reading PC brigade or you''ll have to undergo Diversity refresher training to make you think straight. You forget, there are issues that are forbidden to discuss in the UK. Obviously the Daily Express are trying to whip up hysteria in Oz about levels of immigration into the UK.

[/quote]

You lot just love playing the martyr don''t you [8-)]

These issues are discussed almost daily in certain newspapers and here you are fully entitled to have your empty headed say with impunity from any ''diversity refresher training''. Those chaps at The PC Lobby really need to buck their ideas up as I was under the impression that even mentioning immigration was punishable by twelve months ''hard labour'' in a gulag on Hampstead Heath [:|]

Anyway, I note that the DE statistics are from the ''twelve months up to June 2006''. Very current. Just after the biggest enlargement of the EU to date in 2004 as well.

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[quote user="Bobert"]The figure of 4.000 imigrants a day comes from the International Edition of the Daily Express that was published in Western Australia yesterday (Tuesday). It quotes the National Statistics Office as saying that 1,437,000 migrants arrived in the twelve months to June 2006 which is equivalent to 3,937 people arriving each day.These are short term migrants who stay for less than 12 months.[/quote]So, in fact, LESS time than the average foreign footballer.  Not sure how a footballer such as Sibierski (say) who is foreign but been in England for several seasons could join this group. Unless he has a time machine?  If so is it a Delorean?

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Chelsea, Man Ure, L''pool - they are all very very oh yes VERY much in debt, and how much longer can football continue down this route? I do not envy any of these Clubs. Infact we are LUCKY at Norwich, that we have Delia and MWJ, otherwise we would be f*****. In my view we should slash wages, get most of the current squad out, bring in the kids, and build a 5 year strategy on youth. If we are lucky we will be in the FIRST DIV, in 5 years but this is totally irrelevant. The main thing is to be true to our roots and to be sustainable. Stop chasing the rainbow and get real, and show some genuine ambition!   

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