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Mister Chops

Doncaster on Salary Capping - Norwich not a "natural" Championship club?

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From Ubergruppenfuhrer Doncaster''s column:http://new.edp24.co.uk/content/sport/commentary/NeilDoncaster.aspx"We are often asked why it is that we lose money when we have sell-out crowds and 20,000 season ticket holders. The

answer is simple - on these sorts of crowds, a break-even player wage

bill would be around £4m. And we are currently running at more than

twice that amount.Delia and Michael, Andrew and Sharon Turner,

and the Foulger family have all been using their own personal wealth to

match the investment of our loyal supporters. And it is that joint

investment that pays for a Championship football club. Take out the

money put in by directors and Norfolk would simply not have a

Championship football club to enjoy.
Like most other clubs, we continue

to rely hugely on the generosity of wealthy benefactors to survive."Mmm.So despite 23,000 season ticket sales and crowds regularly in excess of 24,000, Norwich would not be a Championship football club without even more money pumped in from benefactors.This sparks a few thoughts:(a) if this is true, and given the gates we pull in relative to other clubs, every other club in the Championship bar 2 or 3 is unlikely to survive without huge financial backing(b) if this is true, football must be heading for a huge crash at some point in which clubs start going to the wall more frequently than high street stores(c) How do Burnley, Barnsley, Plymouth, Preston, Swansea, Bristol City, Coventry and Blackpool manage to stay afloat with smaller gates than ours?(d) Are we paying our players far more than their market rate?(e) Are we paying other people''s players far more than we can afford?(f) Most worrying of all - Doncaster views Norwich City as a League One side without other people''s money.  I feel expectations have been lowered sufficiently all round from the point where we were a Premiership side to the point where we''re "lucky" to be in the Championship.  It''s 50 years since City came from the Third Division South on a heroic FA Cup run.  Perhaps the anniversary will be marked in another way come the end of the season.

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(a) if this is true, and given the gates we pull in relative to other clubs, every other club in the Championship bar 2 or 3 is unlikely to survive without huge financial backing

Correct.

(b) if this is true, football must be heading for a huge crash at some point in which clubs start going to the wall more frequently than high street stores

Correct.

(c) How do Burnley, Barnsley, Plymouth, Preston, Swansea, Bristol City, Coventry and Blackpool manage to stay afloat with smaller gates than ours?

They all have millionaires (wealthier than Delia at the helm)

(d) Are we paying our players far more than their market rate?

No - but if we were paying less, people on here would be spouting ''lack of ambition''.

(e) Are we paying other people''s players far more than we can afford?

No. With loan players we pay all or a percentage of their salaries whilst they are on loan here. There is an overall budget for transfers and wages, loan salaries come from that budget - so we''re not paying more than we can afford but we are relying on the Board to top up that fund as mentioned by ND.

(f) Most worrying of all - Doncaster views Norwich City as a League One side without other people''s money. I feel expectations have been lowered sufficiently all round from the point where we were a Premiership side to the point where we''re "lucky" to be in the Championship. It''s 50 years since City came from the Third Division South on a heroic FA Cup run. Perhaps the anniversary will be marked in another way come the end of the season.

Quite possibly. The root of all evil is Sky TV and the billions they pump into the Premiership. Ok, it did good to start with, enabling clubs to build nice new stadia but it''s now got to the point where they''re funding the Premiership the same way Ambramovic funds Chelsea... and the same way the banks funded bad mortgages and we all know where that ended up.

Football needs to be run like a business, cloths cut accordingly across the board. Unfortunately it will never be fair while some clubs continue to be bankrolled - so we either have to get ourselves a sugar daddy and join the party or take it on the chin and make the best of a bad job, as we are at the moment.

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We may have lost money in 2007-2008 but we made a profit in 06-07, 05-06 and 04-05 which suggests to me that ND is being very selective in his usage of accounting data. I also note that apart from initial share purchases and a few subsequent purchases of further shares (shares not donations) the wealthy benefactors have only needed to dig into their own pockets to support the Club when we are in the position of being unable to repay loan instalments or capital repayments on loans (for off the pitch investments) which were taken out by ......erm the wealthy benefactors.Without the land deal capital being immminently repayable would Delia and Michael have had a shortfall to plug this year?

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Do you seek to deny these club ''owners'' their pretty baubles? They are that hung up on them - they spin any old rubbish to keep hold of them. The credit crunch has been ''recognised'' for several months now....hark at the sound of all those clubs crashing to financial ruin...........

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Hang on, keep listening, I''m sure you will hear it soon........oh, was that a the sound of a profit and loss spreadsheet twisting to destruction?....I''m sure it was......just the tip of the iceberg that will reveal it''s self any time now............within the next decade......

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[quote user="Shifty Sid"](a) if this is true, and given the gates we pull in relative to other clubs, every other club in the Championship bar 2 or 3 is unlikely to survive without huge financial backing Correct. (b) if this is true, football must be heading for a huge crash at some point in which clubs start going to the wall more frequently than high street stores Correct. (c) How do Burnley, Barnsley, Plymouth, Preston, Swansea, Bristol City, Coventry and Blackpool manage to stay afloat with smaller gates than ours? They all have millionaires (wealthier than Delia at the helm) (d) Are we paying our players far more than their market rate? No - but if we were paying less, people on here would be spouting ''lack of ambition''. (e) Are we paying other people''s players far more than we can afford? No. With loan players we pay all or a percentage of their salaries whilst they are on loan here. There is an overall budget for transfers and wages, loan salaries come from that budget - so we''re not paying more than we can afford but we are relying on the Board to top up that fund as mentioned by ND. (f) Most worrying of all - Doncaster views Norwich City as a League One side without other people''s money. I feel expectations have been lowered sufficiently all round from the point where we were a Premiership side to the point where we''re "lucky" to be in the Championship. It''s 50 years since City came from the Third Division South on a heroic FA Cup run. Perhaps the anniversary will be marked in another way come the end of the season. Quite possibly. The root of all evil is Sky TV and the billions they pump into the Premiership. Ok, it did good to start with, enabling clubs to build nice new stadia but it''s now got to the point where they''re funding the Premiership the same way Ambramovic funds Chelsea... and the same way the banks funded bad mortgages and we all know where that ended up. Football needs to be run like a business, cloths cut accordingly across the board. Unfortunately it will never be fair while some clubs continue to be bankrolled - so we either have to get ourselves a sugar daddy and join the party or take it on the chin and make the best of a bad job, as we are at the moment.[/quote]

I know Bristol have that Lansdown guy and Coventry have Ray Ransom and chums, but didnt know that the others had investors that put more in than Delia.

Does anyone know more detailson the other teams investors?

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[quote user="The Prisoner"]We may have lost money in 2007-2008 but we made a profit in 06-07, 05-06 and 04-05 which suggests to me that ND is being very selective in his usage of accounting data.
 I also note that apart from initial share purchases and a few subsequent purchases of further shares (shares not donations) the wealthy benefactors have only needed to dig into their own pockets to support the Club when we are in the position of being unable to repay loan instalments or capital repayments on loans (for off the pitch investments) which were taken out by ......erm the wealthy benefactors.
Without the land deal capital being immminently repayable would Delia and Michael have had a shortfall to plug this year?
[/quote]

Exactly.  It`s so frustrating that our CE can spout this sort of spin and 95% of supporters will inevitably take it at face value.  In `02 the club had a turnover of £15m and a player budget of £5.2m and the club comfortably made a profit.  In the last accounts we had a turnover of £19m but apparently can only afford £4m for players.  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

The board have set an "infrastructure before the team" policy and i`m afraid are too pig-headed to admit it has failed dismally- word is that this was behind the Turners walking out.

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Thers so many clubs, "seekings investment" now... We would be lucky to get anything...

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Perhaps ND and his cohorts see us as primarily a League 1 team with occasional forays into the Championship?I''m sure some at the club would revel in the perceived "glory" of being a big fish in League 1, giving lots of smaller clubs their day out at Carrow Road ("where''s Delia?") as well as their biggest gates, courtesy of our travelling fans who would, of course, still go to all away games in their thousands, as well as packing out Carrow Road for those exciting home games against Tranmere ("...yes, we lost to Tranmere, but, don''t forget, they''re not far from Liverpool and John Aldridge used to be their manager...") and Orient ("...our game at Orient gives us a chance to put right that record of not having won  a league game in London in Christ knows how many years...").Then, Neil D can finish off his columns (the usual picture of him will be replaced by one of him in a phone box, as our phones will have been disconnected by BT as we can''t afford to pay the bills, especially after Gunny has rung all his ''contacts in the game'' and they''ve said "Bryan WHO? Nope, sorry mate, never heard of you") by saying "...our avowed attempt to get Norwich City back where they belong: In the Coca Cola Championship! OTBC!!"Lets face it, if the CE is writing us off and saying we don''t even "belong" in this League, what hope have we?

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[quote user="Old Shuck"]Perhaps ND and his cohorts see us as primarily a League 1 team with occasional forays into the Championship?I''m sure some at the club would revel in the perceived "glory" of being a big fish in League 1, giving lots of smaller clubs their day out at Carrow Road ("where''s Delia?") as well as their biggest gates, courtesy of our travelling fans who would, of course, still go to all away games in their thousands, as well as packing out Carrow Road for those exciting home games against Tranmere ("...yes, we lost to Tranmere, but, don''t forget, they''re not far from Liverpool and John Aldridge used to be their manager...") and Orient ("...our game at Orient gives us a chance to put right that record of not having won  a league game in London in Christ knows how many years...").Then, Neil D can finish off his columns (the usual picture of him will be replaced by one of him in a phone box, as our phones will have been disconnected by BT as we can''t afford to pay the bills, especially after Gunny has rung all his ''contacts in the game'' and they''ve said "Bryan WHO? Nope, sorry mate, never heard of you") by saying "...our avowed attempt to get Norwich City back where they belong: In the Coca Cola Championship! OTBC!!"Lets face it, if the CE is writing us off and saying we don''t even "belong" in this League, what hope have we?

[/quote]Very good post.  ND''s column would presumably also say "we wouldn''t want to do an Accrington Stanley/Dagenham and Redbridge"... we could follow the "Southend Model"...

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I''m no business analyst and dont live in the city to pick up on all the background news but it occurs to me that:-

We have a club infrastructure to die for at Championship level...great training facilities and youth/academy set up, community education centre, stadium and refreshment facilities, club merchandising and hospitality options along with a fantastic fan base  and season ticket sales...and you could make the assertion that this is a very good business model, with provision for the future, diversification revenue through land deals, the hotel etc. etc.

So what is going wrong? Is it just poor finacial management? Are shareholders taking too much out of the business? Is our financing based upon an aspiration of getting into, and staying in the Premiership and accessing all that Sky money...if so, how realistic is that?

I would like to put faith in the Board''s focus being on the playing side of the business as its bedrock, that without  ''on the pitch'' performance, everything else falls down like a ''house of cards'' (or does it?). This perhaps is where the tension lies? To get the ''football'' right we have to pay the going rate for good quality players and coaching staff, to do anything else is a recipe (pardon the pun) for destination League 1 or lower. However, salary capping in the current climate would be a shot in the foot for us, ...NCFC cannot go unilateral on this, if aspirations are to be realised. You could make a case that we have more to attract quality players other than the highest of salaries, like our facilities, capacity crowds and lifestyle, but I''m not so sure that is enough for the best of today''s talent. A desire for solvency in the near future is clearly  out of kilter with our footballing aspirations and today''s salaries and transfer fees.

So how can clubs with a darn sight less than us have any hope for survival? It is clear from travelling the length and breadth of England that they have to keep their extraneous overheads to a minimum, hence sh*t grounds often belonging to the local authority, no gourmet restaurants, no academies etc etc.

In conclusion, I''m inclined to believe that trying to operate in a generally accepted good business model way is quite futile, whilst the the Abramovichs and the likes of Sky TV are seducing the Premiership, Football League, et al  into a pricing structure that allows only those with more money than business sense to survive in the long term. 

Looking forward further with a fair amount of paranoia, I fear that football is approaching a time when it is no longer the game of the people, the Saturday religion that brings our communities together the length and breadth of the country, but a horrible commercial monster that is destined within the next fifteen years to operate on a global stage with only the mega clubs, extracting zillions from a world wide audience, with the capacity to relocate fixtures and tap into TV audiences, to exploit the most lucrative and sizeable economies and as they rise and fall across the globe. The recent FifaWorld club competition being a taste of things to come.

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[quote user="Mr.Carrow"]

  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

[/quote]

Can you put a figure on the additional cost of these extra staff against what value they bring to the club?

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[quote user="Delia S. Tickers"][quote user="Mr.Carrow"]

  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

[/quote]

Can you put a figure on the additional cost of these extra staff against what value they bring to the club?

[/quote]Can you see the hypocrisy in the CE of a Club with such a large dependency on the loan system as ours being in a position within the F.A. whereby he has a platform from which to preach to the owners of other football clubs about who they can and cannot employ?Still I guess Mr. D. will see to it that any legislation concerning the usage of certain categories of players will be lenient enough to permit the loaning in of compliant players for those Clubs such as Norwich who struggle to comply with ''homeowned'' let alone ''homegrown''. Perhaps before procrastinating about the employment of players within the football league Mr. D should set his own house in order and employ some himself, enough to make a complete first team squad would be a welcome start.

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[quote user="The Prisoner"][quote user="Delia S. Tickers"][quote user="Mr.Carrow"]

  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

[/quote]

Can you put a figure on the additional cost of these extra staff against what value they bring to the club?

[/quote]

Can you see the hypocrisy in the CE of a Club with such a large dependency on the loan system as ours being in a position within the F.A. whereby he has a platform from which to preach to the owners of other football clubs about who they can and cannot employ?
Still I guess Mr. D. will see to it that any legislation concerning the usage of certain categories of players will be lenient enough to permit the loaning in of compliant players for those Clubs such as Norwich who struggle to comply with ''homeowned'' let alone ''homegrown''.
 Perhaps before procrastinating about the employment of players within the football league Mr. D should set his own house in order and employ some himself, enough to make a complete first team squad would be a welcome start.
[/quote]

Very well put.

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Other clubs are looking for investment as well as NCFC.

Clubs will most likely feel the credit crunch in 2009.  Ticket sales will be affected by the credit crunch. Certain clubs will be in trouble in 2009.

 

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[quote user="The Prisoner"]But has he mentioned how we''re not as badly off as Southampton yet WAY49 I need it for full house on my ''Neil Says'' bingo card?
[/quote]

lol oddly if he did I didn''t catch it, of course he may have said that while I was on toilet break [;)]

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[quote user="The Prisoner"][quote user="Delia S. Tickers"][quote user="Mr.Carrow"]

  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

[/quote]

Can you put a figure on the additional cost of these extra staff against what value they bring to the club?

[/quote]

Can you see the hypocrisy in the CE of a Club with such a large dependency on the loan system as ours being in a position within the F.A. whereby he has a platform from which to preach to the owners of other football clubs about who they can and cannot employ?
Still I guess Mr. D. will see to it that any legislation concerning the usage of certain categories of players will be lenient enough to permit the loaning in of compliant players for those Clubs such as Norwich who struggle to comply with ''homeowned'' let alone ''homegrown''.
 Perhaps before procrastinating about the employment of players within the football league Mr. D should set his own house in order and employ some himself, enough to make a complete first team squad would be a welcome start.
[/quote]

Which has got absolutely zilch to do with my question. I would like to know how the clubs finances are affected by employing more non-footballing staff. Mr.Carrow brought this up as a negative under the current regime so I enquired as to how much this costs the club against any additional revenue it brings in.

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[quote user="Delia S. Tickers"][quote user="The Prisoner"][quote user="Delia S. Tickers"][quote user="Mr.Carrow"]

  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

[/quote]

Can you put a figure on the additional cost of these extra staff against what value they bring to the club?

[/quote]Can you see the hypocrisy in the CE of a Club with such a large dependency on the loan system as ours being in a position within the F.A. whereby he has a platform from which to preach to the owners of other football clubs about who they can and cannot employ?Still I guess Mr. D. will see to it that any legislation concerning the usage of certain categories of players will be lenient enough to permit the loaning in of compliant players for those Clubs such as Norwich who struggle to comply with ''homeowned'' let alone ''homegrown''. Perhaps before procrastinating about the employment of players within the football league Mr. D should set his own house in order and employ some himself, enough to make a complete first team squad would be a welcome start.[/quote]

Which has got absolutely zilch to do with my question. I would like to know how the clubs finances are affected by employing more non-footballing staff. Mr.Carrow brought this up as a negative under the current regime so I enquired as to how much this costs the club against any additional revenue it brings in.

[/quote]-£5,600,000 p.a. + in exchange we get a £400k profit from the restaurant. Can''t be more specific since the Club don''t break it down in the accounts for some reason. Thing is a dozen years ago we ran the Club on fewer than 100 staff and had restaurants and match day catering, now we need nearly 200 employees to provide essentially the same revenue streams.

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[quote user="Delia S. Tickers"][quote user="Mr.Carrow"]

  The main difference is that most of the investment in infrastructure and "other income streams" has happened since `02 and number and cost of non-footballing staff has doubled in that time.

[/quote]

Can you put a figure on the additional cost of these extra staff against what value they bring to the club?

[/quote]

Since `02 income has risen by £4m whilst overall costs have risen by £10m.  The team cost about £7m in the last financial year but if you knock off the £3.5m profit on transfers it`s clear that it isn`t the team which is costing more.  You can`t do a direct comparison because the accounts are not detailed enough, but if anyone can present a case from the last annual report that "other income streams" are providing money for the team instead of the other way round i`d love to hear it, and i`d love some of the drugs they must be on......

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[quote user="Mr.Carrow"]

but if anyone can present a case from the last annual report that "other income streams" are providing money for the team instead of the other way round i`d love to hear it, and i`d love some of the drugs they must be on......

[/quote]perhaps the proof will come in January?If we are able to purchase players and strengthen the team without selling anybody then I might start to believe that the alternative revenue streams are beginning to produce a return. If however we sell and have to buy for less than we make with the difference being used elsewhere in the Clubs finances - ho hum, this to me is proof that the fiducial policies adopted by those in charge have failed once again.What do you see happening in January Delia r. slickers? Are we going to buy or sell?

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 200 non-playing staff members means that we spend an average of £28k per staff member which is not bad (if that includes overheads). Now, if we only knew the reasons why those Staff were recruited......

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[quote user="The Prisoner"][quote user="Mr.Carrow"]

but if anyone can present a case from the last annual report that "other income streams" are providing money for the team instead of the other way round i`d love to hear it, and i`d love some of the drugs they must be on......

[/quote]

perhaps the proof will come in January?
If we are able to purchase players and strengthen the team without selling anybody then I might start to believe that the alternative revenue streams are beginning to produce a return. If however we sell and have to buy for less than we make with the difference being used elsewhere in the Clubs finances - ho hum, this to me is proof that the fiducial policies adopted by those in charge have failed once again.

What do you see happening in January Delia r. slickers? Are we going to buy or sell?
[/quote]

More of the same I''m afraid. We will probably sell Marshall, maybe Croft or both  for an "undisclosed fee". GR will then spend some of that on someone who looks good on paper and he will be heralded for his clever work in the transfer market. The player will then go on to suffer the same as the rest, couple of good performances and then.....

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[quote user="Delia S. Tickers"][quote user="The Prisoner"][quote user="Mr.Carrow"]

but if anyone can present a case from the last annual report that "other income streams" are providing money for the team instead of the other way round i`d love to hear it, and i`d love some of the drugs they must be on......

[/quote]

perhaps the proof will come in January?
If we are able to purchase players and strengthen the team without selling anybody then I might start to believe that the alternative revenue streams are beginning to produce a return. If however we sell and have to buy for less than we make with the difference being used elsewhere in the Clubs finances - ho hum, this to me is proof that the fiducial policies adopted by those in charge have failed once again.

What do you see happening in January Delia r. slickers? Are we going to buy or sell?
[/quote]

More of the same I''m afraid. We will probably sell Marshall, maybe Croft or both  for an "undisclosed fee". GR will then spend some of that on someone who looks good on paper and he will be heralded for his clever work in the transfer market. The player will then go on to suffer the same as the rest, couple of good performances and then.....

[/quote]

I`m not sure if you are aware but the club have a £2.5m loan repayment (to pay for land) due by the end of this month hanging over it.  IMO our future as a Championship club hinges on whether we can persuade a cash-strapped bank to roll the loan over or not.  If we can then i don`t think we will HAVE to sell and we may be able to spend a little, if we can`t.....[:S]

Of course, the obvious question is why the hell a football club has a loan to pay for non-essential land hanging over it like a guillotine when it desperately needs cash to stave of relegation......

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