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a1canary

Reality check - what we should be aiming for next...

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"Young and hungry players"? You seem to forget that PL was the master of this and that avenue of shrewd signings has gone with him.Hughton has no record of bringing in talent so no-one knows where this is going. I suspect going for foreigners will only attract the mercenary type looking for a shop window to European level football..... and they won''t find that at Carrow Road on our likely budget.

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As CH has said we just have to aim to win every game we play. After this, targets are reasonably irrelevant. As long as we have this positive attitude, keep Holt and add 3 or 4 quality players to improve our squad we will be okay - and our final position will depend more on the quality and attitude of the other teams in the league. If the standard of the league improves considerably, we could play better football next year but find ourselves lower down the league, and vice versa.

Any club aiming to just survive is likely be relegated. Whilst that may be the minimum requirement of the board (and of some of us fans including myself), to have that as an aim is a very negative approach (ie. aiming to try to win only 1 in 4 games). We would never have beaten Spurs with that attitude.

Personally I think the best case scenario is 7th, the worst 20th, and the most likely about 14th. My only reason for saying 14th is that I do think the league will be stronger. I would be very happy with any improvement on 12th, but this will depend on how much we can strengthen our squad in the coming months.

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[quote user="Cluck Nose."]"Young and hungry players"? You seem to forget that PL was the master of this and that avenue of shrewd signings has gone with him.

Hughton has no record of bringing in talent so no-one knows where this is going. I suspect going for foreigners will only attract the mercenary type looking for a shop window to European level football..... and they won''t find that at Carrow Road on our likely budget.




[/quote]

When Hughton took over at Birmingham following their relegation under McLeish fourteen players had been shipped out and a transfer embargo imposed on them. However Hughton got them to 4th spot so how exactly was that achieved Cluck Nose if as you say " Hughton has no record of bringing in talent" ?

There you are sensible question ( even if i say so myself) and politely put so i await your response so we can debate it further.

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" "Young and hungry players"? You seem to forget that PL was the master of this and that avenue of shrewd signings has gone with him."

Tell me Cluck, do you just make up anything so long as it supports your arguments?

Mick Dennis:

"There has to be more of the same: recruiting hungry young men from lower divisions for whom playing for Norwich represents an opportunity to prove a point.

That model was devised before Lambert was appointed and will continue now he has gone."

"Chris Hughton has no record of brining in talent"

Where on earth did you get that from? Utter utter nonsense. Hatem Ben Arfa, Cheik Tiote ring any bells?

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The reality check: Only two things matter in football.

1) What trophies you win.

2) What competitions you qualify to play in next season.

As such we should aim for what we actually achieved this season: To qualify for the Premier League next season.

After that we should aim to win as many matches as possible, but only as a means of achieving that.

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Good opening post from A1 Canary!

 

I think the club should be concentrating on survival 1st althought obviously the higher the better!

 

With all the managerial upheavel and the League looking stronger, next season will be toughter than this season so noone should start getting carried away!

 

Remember the S*um 10 years ago. One good Premiership season and they thought they''d made it, bought a load of foriegn mercenaries, ripped apart the squad that''d doen so well the season before and ended up relegated!

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Just a note on stadium expansion and debt mentioned by blah, it''s a fair point and correct to say that expansion = more debt. It''s not necessarily right to compare it with the financing of the jarrold. If we''re talking about being in the Prem we''re going to be able pay off the debt much faster. Provided we have cleared the existing debt.

I do shudder tho every time I think of what happened at wolves. 3 years in the Prem, went for expansion, now they get to open their shiny new tier in the championship!

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But if we''re paying off the debt then we aren''t spending that money on the team. That''s putting our football manager at a disadvantage. Whichever way it''s spun there''s only one pot of money and it can''t be spent twice.

 

 

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How much is the stadium expansion expected to cost, i assume somewhere between 7 - 15 M, but that''s mainly guess work. Does anyone know if this funding is supposed to be by way of a new debt or are we going to pay the cost of it ourselves?

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Which ever way we pay for it Pricey. We either keep some from the football manager each year and save it up or we borrow it and repay it with money we keep from the football manager later. Which way would you go?

 

 

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I would expect the club to take a loan out Nutty, being in the prem the interest repayments will probably be lower, due to our ability to paying it being stronger. This way our transfer budget can remain at a similar level. I know it''s perhaps the riskier strategy, but as long as we keep a tight wage budget over the next few years then even if we are relegated we should be in a position where we can still pay the debt off while being able to keep most of the players, hopefully going straight back up to the prem.What would you preferred method be?I do think an expansion has to happen, data from the club shows we could have easily sold out 35,000 for a lot of games this summer. If we don''t increase the capacity we will be stuck in the same financial position for a while, increased match day revenue is the best way of increasing our overall revenue, while making us a more attractive prospect for future investment and sponsorship deals.

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I meant to add, that by borrowing the money we aren''t necessarily taking money away from future transfer revenues, the increased capacity is almost like extra guaranteed cash (if you know you can sell those extra seats), so while cash flow may decrease in the short term, the club knows cash will be coming in, so will still be in a position to give this money to the manger while also paying of the debt over time, but as i said earlier, this relies on us maintaining a tight wage budget and not splashing out on 40-50K a week players.Of course, the club could choose short term repayments, which could well reduce future transfer budgets, but i doubt they would, we''re a pretty safe bet for lenders at the moment.

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Come on Nutty, it''s a bit simplistic to say that taking on debt is taking money away from the manager. It''s taking money away from the club as a whole and yes, indirectly from the manager, but in return for substantially increased revenues that also go to the manager. And which we badly need to sustain the club and keep it competitive if we are relegated.

Also, bare in mind the figures.The £20m debt we have had around our neck whilst in L1 and the championship was a serious millstone that we would never have paid off without promotion.

But now we have secured 2 seasons in the prem, that will be gone and dealt with. With our first season of premier league turnover, even the full £20m represents probably less than 30% debt to gdp to use the topical parlance. Most sovereign nations could only dream of debt levels that low!

Now £15m has been suggested for the city stand rebuild and it would be up to the board to decide how to raise that money, be it direct from income, from a loan or both. Our budget model has been kept largely in tact from our championship year and yet we''ve had a massive boost to income from the prem so there is wriggle room at the moment at least. Pricey is absolutely right that we have got to keep a lid on that wage budget in order to pay off the debt, deliver a decent transfer budget and prepare the ground for stadium expansion, which, like it or not, is a necessary evil that we have to face up to. If we can pull it off without going down, we''ll be laughing. If we do go down with the expansion, it should at least keep us competitive in the championship.

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[quote user="a1canary"]

Now £15m has been suggested for the city stand rebuild.[/quote]

 

The club''s figure, from 18 months ago, for the increase to 35,000 seats is £20m.

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8000 additional seats at say 300 a seat would generate an additional 2.4m a season. This represents a 12% simple return on the 20m outlay which given is it substantially higher than current interest rates would therefore generate additional cash to spend on players. Debt is not inherently good or bad. It just depends whether it generates positive cash flows or not. But the rationale for a new stand does depends on being able to generate that additional 300 for each seat each season for it to make sense and the ability to obtain long term finance to match the cash inflows.

Looking at likely demand for those extra seats then stay up and it probably makes good sense as it would generates extra cash for players and help us continue to stay in the premier league. Get relegated and it would probably be a liability. 

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Don''t forget also T that it is likely we would pay some up front capital for the build since we should be able to afford that and it would reduce the financing amount/cost.

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Yes there would probably be some equity as well which would reduce the cost of capital. If we stay up it could well generate a 12% return which given that it would be above our cost of capital means that it would generate cash and be a good thing. Get relegated and I doubt the demand would be there. Basically the numbers just confirm most people''s intuition.  We are getting ahead of ourselves though. First we need to stay up next season and repay the external debt. I actually thought the club wanted to stay up for 3 seasons before making the decision once the debts are repaid and the odds of us staying up and justifying a new stand are much improved. There is no reason that it should adversely impact the playing side though provided long term finance to match the long term revenues can be obtained.

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[quote user="T"]

Yes there would probably be some equity as well which would reduce the cost of capital. If we stay up it could well generate a 12% return which given that it would be above our cost of capital means that it would generate cash and be a good thing. Get relegated and I doubt the demand would be there. Basically the numbers just confirm most people''s intuition.  We are getting ahead of ourselves though. First we need to stay up next season and repay the external debt. I actually thought the club wanted to stay up for 3 seasons before making the decision once the debts are repaid and the odds of us staying up and justifying a new stand are much improved. There is no reason that it should adversely impact the playing side though provided long term finance to match the long term revenues can be obtained.

[/quote]

 

I think the club''s publicly stated view is that if we stay up into a third season then it will be considered. So, with luck, it will get contemplated in the spring/summer of 2013. That would also fit in with the May 2013 deadline for the repayment of the Axa external debt, which is the lion''s share of that remaining.

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"8000 additional seats at say 300 a seat would generate an additional 2.4m a season. This represents a 12% simple return on the 20m outlay which given is it substantially higher than current interest rates would therefore generate additional cash to spend on players."

...If you fill the seats every match - the is no precedent for Norwich being able to meet this demand, because we''ve never had this much supply. At least not recently.

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[quote user="blahblahblah"]"8000 additional seats at say 300 a seat would generate an additional 2.4m a season. This represents a 12% simple return on the 20m outlay which given is it substantially higher than current interest rates would therefore generate additional cash to spend on players." ...If you fill the seats every match - the is no precedent for Norwich being able to meet this demand, because we''ve never had this much supply. At least not recently.[/quote]

 

And when we did have the supply, before all-seating, our highest ever average League crowd was a bit over 27,000. But apparently  times have changed since then...[:P][:O][:D]

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[quote user="priceyrice"]I would expect the club to take a loan out Nutty, being in the prem the interest repayments will probably be lower, due to our ability to paying it being stronger. This way our transfer budget can remain at a similar level.

I know it''s perhaps the riskier strategy, but as long as we keep a tight wage budget over the next few years then even if we are relegated we should be in a position where we can still pay the debt off while being able to keep most of the players, hopefully going straight back up to the prem.

What would you preferred method be?

I do think an expansion has to happen, data from the club shows we could have easily sold out 35,000 for a lot of games this summer. If we don''t increase the capacity we will be stuck in the same financial position for a while, increased match day revenue is the best way of increasing our overall revenue, while making us a more attractive prospect for future investment and sponsorship deals.
[/quote]

 

I''m not convinced that I''m in favour at all Pricey. I think it''s a huge decision with potentially drastic consequences if they get it wrong. I believe Purple has said it''s the most important decision this board has had to make and I agree with that.

 

[quote user="a1canary"]Come on Nutty, it''s a bit simplistic to say that taking on debt is taking money away from the manager. It''s taking money away from the club as a whole and yes, indirectly from the manager, but in return for substantially increased revenues that also go to the manager. And which we badly need to sustain the club and keep it competitive if we are relegated. Also, bare in mind the figures.The £20m debt we have had around our neck whilst in L1 and the championship was a serious millstone that we would never have paid off without promotion. But now we have secured 2 seasons in the prem, that will be gone and dealt with. With our first season of premier league turnover, even the full £20m represents probably less than 30% debt to gdp to use the topical parlance. Most sovereign nations could only dream of debt levels that low! Now £15m has been suggested for the city stand rebuild and it would be up to the board to decide how to raise that money, be it direct from income, from a loan or both. Our budget model has been kept largely in tact from our championship year and yet we''ve had a massive boost to income from the prem so there is wriggle room at the moment at least. Pricey is absolutely right that we have got to keep a lid on that wage budget in order to pay off the debt, deliver a decent transfer budget and prepare the ground for stadium expansion, which, like it or not, is a necessary evil that we have to face up to. If we can pull it off without going down, we''ll be laughing. If we do go down with the expansion, it should at least keep us competitive in the championship.[/quote]

 

I think your fag packet is only factoring in the argument to support a new stand a1 buddy. There''s many more costs in running it over and above paying off the debt that financed it. The Jarrold really was a millstone but the difference was we had to replace the old south stand. We won''t have to replace any of our present stands for many years.

 

If a new stand would finance itself then I can''t understand why other clubs haven''t taken advantage of such a scheme. Especially Spurs who look to be held back by the size of their stadium. Spurs average 36,000 while Arsenal average 60,000. On that basis it''s pretty much a given that Spurs could easily get another 10,000 every game.

 

But my biggest concern with creating the new debt is something that I have noticed McNally recognises. Football by it''s nature is cyclical. Nothing lasts forever. And I think the financial fair play rules could change the picture considerably. At present many of the best players in the world play in England. They play here because clubs are backed by rich foreign owners who want to be part of our TV orientated Premier League. If they are no longer allowed to attract the best players in the world then someone else will. Then the Premier League will be selling an inferior product. Sky will pay less for it and ther demand to watch it will drop. causing a downward spiral.

 

You never know but we may get our game back. But if we do having a huge debt to repay would be disastrous.

 

 

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You would not need to fill the seat every match to make 300 a seat. 10 games at 30 a seat would do it - plus you have add on revenue from merchandise and catering. Stay up amd it looks like it makes sense and Nutty is wrong. As a cetain PL said if you don''t move forward you end up going backwards. Most importantly the additional revenues would increase our chances of staying up.Get relegated and Nutty is very probably correct. its a gamble and ultimately depends on your attitude to risk.

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How dare you question my fag packet!

A new stand doesn''t entirely finance itself i agree, and it''s a leap into the unknown to some degree. But what we do know is that debt free and with a full 35k stadium, we''d be a stronger bigger club.

But just like you i am nervous about stadium expansion and we mustn''t go for it at any cost. If if weren''t for the spectre of relegation it would be a no brainer. This is why they won''t stand for relegation in American sports leagues. I wouldn''t go down that route but it does make business planning next to impossible.

I think financial fair plays has the "potential" to radically alter Premier League football for the better and in favour of clubs like ours. I''m just not yet convinced slimeball scumbag scudamore won''t continue to find ways to delay it and water it down. Although even if it is fully implemented i don''t share your view that it could cause a huge drain of players away from the PL. We could lose some of the total mercenaries (good!) but otherwise it just puts all the leagues on a level playing field-ish. Prem will still be the most watched and sold league i expect so players will still be attracted to it.

Whatever happens i guess all it really shows is the expansion plan is as tough a decision to make as it ever was.

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Bowkett and McNally seem to think that an increased capacity is necessary - presumable to make the club more self-financing. But it involves spending a substantial amount of money on the assumption / hope that it will generate substantial income to repay the cost in a reasonable time and add income to the club. That assumes that you can fill those seats (or most of them most of the time) at a reasonable price - and that the additional capacity doesnt have an adverse effect on the pricing structure. In the ideal world I would like to see additional capacity provided in increments - a little at a time to minimise the risk. It looks as if we are running out of options on that front and the rebuild of the City stand is now the only option. But - and its a big but - we would lose a significant amount of capacity while the old stand is demolished - for what ...say a season and a half at least. That''s another cost as well as risking that some punters that cant get thier regular dose of heaven and hell at Carra will just get out of the habit / not come back. If it were possible to put some additional capacity on the top / back of the Jarrold, use it as additional capacity initially and then use it to decant the survivors of the City Stand when its being done over then that may provide a better continuity (but more expensive overall). I guess thats not possible?However key to all this is maintaining and increasing the numbers turning up to see matches. We can argue to hell and back about whats likely but the scenario which gives us the best chance is if we stay up in the Prem and fans can see a good competive side acheiving good results. So you have also got to find some money (on top of capital and interest payments) to maintain and improve the squad - good transfers, decent wage structure etc. A very difficult balancing act - and as has been said one of the most important (possibly the most important) decision for the Board over the next 2-3 years. I''m all for some additional capacity - but I am very wary of some of the potential consequences if we get this wrong. The timing may be the critical issue. I would not be expecting the bulldozers in at the end of next season - there will be a lot of planning issues etc to be resolved for a start. It would not surprise me to see that this development may be held off for a year or two yet.

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This ground expansion debate goes on and on and round and round.

 

There are sound arguments for both sides.

 

Should we get an outside investor/contributor, such as Aviva, in return for naming rights, the Club need not make itself financially vulnerable by following the dream of a 35, 000 all-seater. 

 

I would have thought such a consideration would figure highly in the conclusions of the  feasability plan than I believe is, or soon will be, commissioned.

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Dead right Broadstairs. But again, I suspect that we would only get a decent sum for naming rights if the potential investor was reasonable certain that we would be in the Prem for a while and get the sort of brand exposure they would need to justify putting up a decent sum of money. Which means that there must be a continued stream of decent sums of money, year on year, for the "football department" to keep the team competitive. And round and round it goes.

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With ref to nuttys comments about possible lack of future demand - If the bubble is due to pop, we may well know about it soon, as the tv rights auction is upon us again.

"BSkyB is expected to increease the £1.62bn it paid for 115 live matches three years ago under the existing deal. Analysts are forecasting that Sky will offer between 10% and 20% more."

http://www.guardian.co.uk/media/2012/jun/07/bskyb-espn-premier-league-tv-rights?newsfeed=true

Hollywood reportrer claim that the auction has gone into a second round, likely to be as a result of either al-jazeera or channel 4 making a bid for one of the smaller rights packages.

http://www.hollywoodreporter.com/news/bskyb-espn-bids-english-soccer-league-second-round-336327

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Bowkett has today predicted turnover for the financial year just ended (I assume that is what he is talking about) of around £75m, which would be at the top of expectations. It was always likely to be somewhere between £70m and £75m. And it is an impressive figure. But it exemplifies why the board want to increase capacity. There is not that much that can be done to boost that figure, short of qualifying for Europe and having loads of extra matches, and/or having domestic cup runs. Younger posters will need to ask their grandparents what a cup run is...

You can raise ticket prices a bit, although by how much in the current climate is a question, and sell a bit more food and drink, and perhaps have one or two more matches on TV. But it is the ground capacity that is the real limiting factor.

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"You can raise ticket prices a bit, although by how much in the current climate is a question"That is a question of how popular you want to be I''d argue.  If they put prices up by 50%, and only 30% of people were put off, they''d make more money.  But that would be opposite to the way the club has been run up to now.

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