Off field activities?

[Barclay_Boy 0]

[quote user="The Prisoner"][quote user="Jim Kent"]What rubbish are debt is because we have a wage bill we can''t afford..[/quote]

No the debt is due to off field ventures as explained repeatedly on here. A football club cannot borrow to buy players or pay their wages directly.

A bit off topic now as it seems some people still don''t understand our debt.

I think it''s important to point out that the first half of the securitisation deal money (circa £7.5m) went on re-financing the original debt inherited from Robert Chases tenure which raises the following points.

1) Why after 12 years in charge does Delia Smith and her board still owe £7m on a £6m debt?
2) How does this debt exist if Delia really did ''save the club''? Surely the £6m that was going to bankrupt us would have been paid off or was it really just re-financed and word put out that the club had been ''saved''?
3) Whilst it''s easy to point the finger at Chase and blame him for this amount of the debt it is much more constructive to ask why when Chases investments matured (both players and land) none of it was used to pay off the original debt?
4) This debt from the Chase years is still at best running at the same level as 1996 (6-7 million pounds) despite 12 years of interest payments and quite a few years of profit at this club so bearing this in mind which of the following statements is true?
 a) By failing to make Capital repayments on the original inherited loan the Board are depriving the squad of funds through large interest repayments?
 b) By failing to make Capital repayments on the original inherited loan the Board are likely to pass on the 1996 debt in it''s entirety to the next owner of this club?
 c) By failing to make Capital repayments on the original inherited loan the Board are sinking deeper and deeper into debt?
 d) By failing to make Capital repayments on the original inherited loan in years of profit the Board have put the long term future of this Club in a position of more risk of financial failure?
 e) By failing to make Capital repayments on the original inherited loan the Board are portraying themselves as poor borrowers to prospective investors and or financial institutions? Would you lend to someone who struggles to make the minimum repayment even when they''ve made huge profits?
 f) By failing to make Capital repayments on the original inherited loan or the securitisation deal itself the Board are effectively just buying themselves time in position with no thought for the legacy they will leave behind?
 g) By failing to make Capital repayments on the original inherited loan or the securitisation deal itself the board have had to introduce the wage bill as a red herring to divert attention away from the true causes of  the black hole of debt.


Having millions of pounds to repay on a stagnated land deal hasn''t helped much either.


Back to the OP''s post now.

"You don''t make money because 11 guys run around the pitch, you make money because of all the other commercial aspects that go with a football club"

Not the first time I''ve heard this said but to me it''s a fatally flawed argument.

Let''s imagine for a minute that there is no football team at NCFC and see what happens when those 11 guys do not run around the pitch.

Bang goes the merchandise!
Bang goes the Saturday catering revenue.
Bang goes the Saturday bar take.
Bang goes the Advertising revenue.
Bang goes the website and Canaries World revenue.
Bang goes the tv money.
Oh and bang goes the ticket income!!

Nope I think it is fact that you really do need a football team to make money at a football club to say otherwise is patently foolish. It also becomes quite apparent that on the whole the better the guys are who are running round the pitch then the more money you will make as more people want to be associated with them.
[/quote]

BUMP!

Prisoner, you really should be running the country mate, or at the very least Norwich City FC!

[shefcanary 2,385]

[quote user="blahblahblah"]

 you aren''t going to sign Ched Evans on loan if you tell him he''s got to run over Mousehold 3 times a week these days.

[/quote]

Absolutely - you pay peanuts you get monkeys etc.  And you need a good brand to attract players like Evans, which doesn''t mean spending lots on a logo, but generating the feel and look of a premiership club. 

[shefcanary 2,385]

[quote user="Barclay_Boy"]

Prisoner, you really should be running the country mate, or at the very least Norwich City FC!

[/quote]

Yeah you''ve talked the talk, now walk it and get the investment support to buy out Smith & Jones, get rid of all the off the field shit, and prove you can get to the opt of the football pyramid without off the field activity. 

But then the Abramavich''s don''t hang around these parts do they cos'' we haven''t the Brand of the big 4 or the catchment area that would support Abramovich''s other aims of "honest businessman".

[Barclay_Boy 0]

[quote user="shefcanary"][quote user="Barclay_Boy"]

Prisoner, you really should be running the country mate, or at the very least Norwich City FC!

[/quote]

Yeah you''ve talked the talk, now walk it and get the investment support to buy out Smith & Jones, get rid of all the off the field shit, and prove you can get to the opt of the football pyramid without off the field activity. 

But then the Abramavich''s don''t hang around these parts do they cos'' we haven''t the Brand of the big 4 or the catchment area that would support Abramovich''s other aims of "honest businessman".

[/quote]

nobody''s talking about getting rid of all off field activities here. we are talking about priorities and what drives the other. you are putting the horse before the cart. put it like this, are customers more likely to buy a Norwich shirt if we win next week or if we lose? are more people likely to renew their season tickets if we are top 6 or if we get relegated? are investors more likely to invest in an ambitous club that is going places or one that is in decline. (the only exception to the last point is if an investor thinks they are getting a bargain, ie a club with potential they can pick up on the cheap, and 56 million for us could hardly be described as "a bargain" at the present time!)

[Tangible Fixed Assets anyone? 0]

[quote user="blahblahblah"][quote]Sorry but you are incorrect. Our 19m debt (i.e. AXA secured loan) has nothing to do with player wage bills. It has been built up over time through off-field infrasture developments, such as the Jarrold stand. The Corner infill, the land behind the Jarrold stand, the Road etc etc. Some things we had to invest in some we didn''t.[/quote]

And yet, as has been done to death millions of times on this board, the things we didn''t have to invest in don''t come close to a single seasons'' player wages.
[/quote]

£6.4m re the ex LSE land etc.

£3.2m re the corner stand

£3m - £4m+ re non critical fixed assets

£1m+ re the Joe Lewis Diner etc in 2007 - 2008 season

 

This seasons player wages, transfer budget etc is £8.5m

Oh dear thats put a spanner in your argument!

 

 

 

 

[shefcanary 2,385]

Not horse and cart, but chicken and egg more like. 

What came first - 20,000 plus season ticket holders that produces a steady stream of income to let the Board invest in off the field activities in order to raise further investment, or, off the field activities that produce a steady stream of income by persuading 20,000 people to buy season tickets.   

Pre-1990''s Norwich would never have attracted 20,000 plus season ticket holders, most like myself just turned up as what are now called casual tickets week in week out but woe betide a drop in form and attendances soon dropped as did revenue. 

Also not many clubs outside the Big 4 attracted those sort of numbers of season ticket holders either!  The investment in and around the ground has generated them but because the Big 4 now have 50,000 plus season ticket holders, after they re-invested the TV money in off the field activities, we continue to play catch up. 

Now has the club gained the season ticket holders and the steady stream of income through off the field activities.  Probably and like it or not, those tend to be the non-vociferous types as well.  But without them we would be down to the die hards of 14,000 less a week. 

Con or not, it''s the only way to survive at present, and we are where we are.

[The Fish Seller 0]

[quote user="shefcanary"]

Yeah you''ve talked the talk, now walk it and get the investment support to buy out Smith & Jones, get rid of all the off the field shit, and prove you can get to the opt of the football pyramid without off the field activity. 

[/quote]The point I make is that if those operations were declared in the accounts independently from each other we would expect to be making a net profit on each and every one just like most other football clubs in the country, that profit includes deducting wages, stock and all other costs. These are the traditional cash generative schemes associated with football clubs, and I don''t think anyone would believe that it''s one of these side businesses that is costing the clubs millions in losses each year. I do not advocate dropping all off field activities the ones I''ve quoted above are examples of profitable ofa''s which I would certainly keep were I ever in charge of a football club. From all these profitable activities both on and off the pitch are to be deducted the running costs of the club including the wage costs of those not involved in any of the cash positive ofa''s or playing squad and here I think is a problem. Doomy and co use the ''wages cost'' as a stick with which to beat us and explain all our financial woes yet to declare the catering, merchandise, advertising etc as profitable in the accounts you would expect associated costs to be removed beforehand and I''m sure they are prior to release but they are recompiled in such manner as to be disingenuous yet lawful . So what we get is IMO verbal double accounting with profits declared by some branches being negated by huge staff costs even though in calculating those profits certain of those costs (wages) must have already been accounted for.It''s actually very difficult to articulate this  so here''s a little example of Doomy maths-speakI get 10 hours work at £20 per hour and since I can''t do the work myself I employ somebody to do it for me for £10 per hour.He completes the work, I get the £200 and pay him his £100 giving me £100 profit.My wife knows I got the job and wants some money for the houskeeping but I don''t want to give it to her so I explain it thus:Doomspeak alert!!=> I made £100 today but had to get somebody in to do the work and he cost me £100. <= Doomspeak alert!!Technically not lying to her am I but neither am I being straight since the profit was exactly that a profit after all overheads were deducted.Something at the club is running at a huge loss I suspect it''s a combination of debt repayment and overstaffing but I fear the true level of the problem is being disguised within the accounts and we are thrown the ''wages bill'' as a red herring in much the same way I told mywife Ididn''t have any money in the above scenario.

[Mr.Carrow 376]

[quote user="Canaries in Bed"]Ah, Mr Carrow, the man who thinks he knows the whole in''s and out''s of our finances. Where would we be with out him.[/quote]

I apologise for forcing you to read and respond to my posts.......[8-)]

[Mr.Carrow 376]

[quote user="shefcanary"][quote user="Mr.Carrow"]

[quote user="Robert N. LiM"]Mr C, can you point me to the bit in the accounts that shows that? I am not taking issue with your claim - I would be very interested to see where it comes from. Are the accounts available online or do you have to be a shareholder to see them?[/quote]

I don`t think you can get them online, and i`m not entirely sure what you`re asking me to provide, but if you`re talking about ticket income/player wages then in `07 player wages were 31% of turnover at £7.4m and ticket income was £7.7m.  We also had a parachute payment in that season and a £2m transfer profit.  In the last accounts (`08) the club decided not to give a figure for player wages, but given that overall wages fell by nearly £1m and the players were supposed to be on tiered contracts which dropped once parachute payments ended, then i think it`s safe to assume they dropped to below £7m- again ticket income was £7.75m.  If you factor in the £3.5m transfer profit then the bulk cost of the team was less than £4m out of a £19m turnover.  The cost of the team is not the problem- it`s all the other costs which have spiralled out of control.

[/quote]

So Mr C, a business can survive long term on the basis of paying £7.4 million in players wages out of £7.8 million of income - which seems to be your view. 

Granted that someone has to:

• look after the wee little cherubs we so idolise and make sure their every little whim is catered for,

• make sure that they have a pitch to play on,

• make sure they have somewhere to practise on to ensure that the pitch is not cut up too much for the weekly games,

• make sure there is a stadium with adequate space for people to watch them to generate the £7.8 million in relative health & safety,

• make sure people are there to collect and count their ticket money

• make sure that the fans know when the club is playing,

• make sure that they can do this at night as well as in the day,

• pay the police for attending the ground (yes and/or the security firm the club partly owns),

• make sure the football licencing authorities are paid the annual fees for allowing the club to call itself a football league club,

• make sure the media feel welcome to ensure that some kind of exposure is maintained within the press / on TV & radio, just in the hope we may actually generate some kind of sponsorship / corporate support that might just keep the ball rolling.

The list could go on but I hope that you can catch the drift.  And you think that can all be done on the remaining £0.4 million.  You get my vote for Chairman - please take over immediately.

[/quote]

I must have missed this little gem before i went out earlier.  Shefcanary, if we are going to debate can we at least try to keep it reasonable?  Where did i suggest income was £7.8m?  That is ticket income alone, it may surprise you to learn that "Football Association and league income" (tv money basically) alone was £2.62m on top of that.  Overall income was £19m and when you include the transfer profit (treated as an exceptional item) it was £22m.  Trouble is costs were closer to £25m and therein lies the problem- if you think the majority of those costs are team related then bury your head a bit further in the sand mate......Just because "other revenue streams" and "off-pitch projects" sound big and clever does not mean they are guaranteed to make money.  I invest in the stock market and i have seen plenty of good ideas come to nothing and people losing their shirts- that`s business.

Of course, rather than childish assumptions and platitudes you could always cut my arguments down with hard cold facts and show me where i`ve got it all wrong.....?  I won`t hold my breath.

[Mr.Carrow 376]

[quote user="blahblahblah"][quote]land, roads, new pitch, ticket office, Jarrold stand refurb., Colney conservatory and gym equipment[/quote]

Land I grant you, I can''t see the purpose of that.  Yet.  Road was neccesary to allow people to get to the hotel which will provide income to the club at some point.  New pitch & ticket office - built at the time we were going into the Prem ?  Premiership clubs need Premiership facilities.  Gym equipment, is this for the players ?  Anything at Colney is hard to argue against because it''s the working environment of the players.  People like to work somewhere nice - you aren''t going to sign Ched Evans on loan if you tell him he''s got to run over Mousehold 3 times a week these days.
[/quote]

"Premiership clubs need Premiership facilities", that`s about as meaningful as me saying "Premiership clubs need Premiership players".  Neither are absolutely vital or necessary but at least if you go for the players you have a good chance of remaining a Premiership club and coining it in for a few more years.

"Anything at Colney is hard to argue against".  Really?!  I would say the exact opposite- our youth system isn`t producing the goods and all those shiny facilities are producing an increasingly crap team.  What return are we getting for our investment in our wonderful facilities?

And we don`t sign players like Ched Evans do we?  That`s the whole point.  Burnley got Eagles, Patterson and that good young lad from Dundee we were after though and the entire place is an absolute dump.

[Thirsty Lizard 3,155]

Oh come on Mr Carrow surely you know enough about football to know that the only reason Burnley were able to buy those players was because they sold their star centre forward, Kyle Lafferty, for about 4 million if my memory serves me correctly. Whenever Norwich sell a player (with the possible exception of Chris Brown) people come on here and slag the board off venemously. Yet somehow when Burnley do it you almost seem to be making it out to be a virtue.

[Mr.Carrow 376]

[quote user="Thirsty Lizard"]Oh come on Mr Carrow surely you know enough about football to know that the only reason Burnley were able to buy those players was because they sold their star centre forward, Kyle Lafferty, for about 4 million if my memory serves me correctly. Whenever Norwich sell a player (with the possible exception of Chris Brown) people come on here and slag the board off venemously. Yet somehow when Burnley do it you almost seem to be making it out to be a virtue.[/quote]

If our club re-invested incoming transfer fees directly into the team the way Burnley and Preston seem to consistantly manage, i don`t think we would have been in the parlous state on the pitch that we`ve been for two seasons now and the board would receive far less criticism.