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The Finacial benefits of relegation.

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"City announced a net profit of £6.7m and the clearing of all external debt, although Bowkett said that they would have broken even had top flight survival been achieved last season.

“Perhaps this is one of the most uncomfortable profit announcements in my business life, in the fact that our incremental increase in profit is due totally to our failure to remain in the Premier League,” he commented.

“We had planned to roughly break even, and we have made this profit because we did not have to pay the players the bonus for staying in the Premier League. I would far prefer to have a break even situation and to still be playing in the Premier League.”

McNally added: “We’re pleased that the debt has been repaid. We’re externally debt free.

“We’re all disappointed and frustrated at what happened on the pitch last year, but we’re pleased to say that financially we’re in decent shape as we attempt to get back to the Premier League.”

Read more at http://www.canaries.co.uk/news/article/20141024-accounts-david-mcnally-alan-bowkett-2038037.aspx#weIqHuUkvO8EfH5z.99"

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Highlight in the accounts is the 4.5m player registration right off. Emphasises the failure of the recruitment last season.

Mcnally down to a million.

Still 2m directors loans

13.6m net spend on players in close season.

Maybe more but key points from quick scan on smartphones

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[quote user="T"]Highlight in the accounts is the 4.5m player registration right off. Emphasises the failure of the recruitment last season.

Mcnally down to a million.

Still 2m directors loans

13.6m net spend on players in close season.

Maybe more but key points from quick scan on smartphones[/quote]Just to add some detail to those points. Given that we sold Snodgrass,

Fer, Pilkington and Surman, a net summer spend of  £13.6m, with a

possible extra £3.5m, is fairly remarkable.As to McNally''s pay package, in the previous

three years he received his basic salary (now about £750,000) plus

bonuses for hitting or beating financial targets and for either gaining

or retaining Premier League status. This time he has lost the PL bonus

but kept a financial one. On the face of it that seems strange, since

getting relegated has massive negative financial implications, such as

income being halved or close to it.But they will hit the

accounts for the current year. In fact getting relegated helped the

accounts just out, because it meant we didn''t have to pay out certain

player bonuses. So I assume (never assume...) that either he won''t

received a financial bonus at the end of this season or that it will be

much smaller than before. If I was able to be at the AGM, more than

worrying about Stephen Fry''s attendance record, that would be a

point I would like clarifying.As to the internal debt, this time last year Alan

Bowkett said the intention, having eliminated the external debt, was to

pay off all the £2m owed to Smith and Jones and the £1.1m to Foulger in this

last year. In fact only about £500,00 each has been paid back to S&J

and Foulger, leaving £2m outstanding. Possibly, given our precarious

league position, even though the sums were not large, it was thought

best not to pay it all back.The hotel project, as became known 

has gone belly

up. At the time not spending money we didn''t have (which would have

increased our debt to possibly unmanageable levels) on a corner infill

with not many seats was undoubtedly the right decision. That said, the

project has been a pretty unlovely affair on every other level.

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"Given that we sold Snodgrass,

Fer, Pilkington and Surman, a net summer spend of  £13.6m, with a

possible extra £3.5m, is fairly remarkable." err, wasn''t that before    "
we sold Snodgrass,

Fer, Pilkington and Surman " ?ie last summer (2013)

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[quote user="City1st"]"Given that we sold Snodgrass,

Fer, Pilkington and Surman, a net summer spend of  £13.6m, with a

possible extra £3.5m, is fairly remarkable." err, wasn''t that before    "
we sold Snodgrass,

Fer, Pilkington and Surman " ?ie last summer (2013)

[/quote]No.

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[quote user="PurpleCanary"][quote user="City1st"]"Given that we sold Snodgrass, Fer, Pilkington and Surman, a net summer spend of  £13.6m, with a possible extra £3.5m, is fairly remarkable."
 

err, wasn''t that before   
"
we sold Snodgrass, Fer, Pilkington and Surman " ?

ie last summer (2013)




[/quote]

No.


[/quote]

Now now PC you know NCFC have special dispensation that unlike every other company who have to publish accounts at the latest 9 months after year end. NCFC can dilly dally a further few months without penalty.

So just be told and bow to superior knowledge[;)]

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This summer sales cannot be in this set of accounts unless they published this months journals!

Surely city1st is correct! What am I missing?

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The accounts were up to the year ending June 30th 2014 so show dealings up to that date and do not include this summers transfers.From the official site is says.....
- 9 new players were recruited during the financial period being reported on

- A further 8 new players have been recruited into the squad since the

end of the financial year and several senior players have had their

contracts renewed

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I''m impressed with Norwich if they can produce their accounts and get them audited & signed off, issued in less than 3 months.

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If you look at page 29 #33 you will see post balance sheet events : -

Subsequent to the year end the club has acquired registration of players...

It goes on to say the net payment to which the club is committed to in respect of these transactions is 13.6m..

I can''t type it all out because I''m on my phone but I think you''ll find that''swhat purple iis referring to.

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[quote user="nutty nigel"]Bonner? Lol! I believe binner was your claim...[/quote]perhaps you meant boner''Gilfs'' can have an attraction for men of a certain age .......

................ so I have been told

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[quote user="nutty nigel"]If you look at page 29 #33 you will see post balance sheet events : -

Subsequent to the year end the club has acquired registration of players...

It goes on to say the net payment to which the club is committed to in respect of these transactions is 13.6m..

I can''t type it all out because I''m on my phone but I think you''ll find that''swhat purple iis referring to.[/quote]Yes.

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Why is it a strange post Nutty?

It''s impressive as my own company a lot lot smaller takes longer to produce and get audited before submitting my accounts. Three months for a football club to get together the journals into auditable accounts, be audited and then signed off is good going.

Whats starnge about praising the club?

I can''t win sometimes.

PS Delia is a closet bonner!

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[quote user="City1st"]perhaps purple could eloborate further

[/quote]The accounts, with the relevant post-balance sheet section, are available on line on the club''s website.

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[quote user="City1st"][quote user="nutty nigel"]Bonner? Lol! I believe binner was your claim...[/quote]perhaps you meant boner''Gilfs'' can have an attraction for men of a certain age .......

................ so I have been told

[/quote]Indeed[Y]

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''Subsequent to the year end the Club has acquired the registrations of players Lafferty, O’Neill, Cuellar-Jimenez, Rana-Jerome, McGrandles, Odjidja Ofoe, Thompson, and Miquel. ''yep, we signed these since the accounts were made (to June 2014)''The Club also sold the registrations of Snodgrass, Pilkington, Fer, and Surman for an amount in excess of the carrying value at the balance sheet date. ''yep, we sold those since the accounts were made (to June 2014) - and made a profit ie more than they were listed as worth

''The net payment to which the club is committed to in respect of these transactions is £13.6m with a maximum further amount due of £3.5m dependent on Club and/or player performance. ''is the club claiming that we spend a further £13,6m on buying the first named players (once what was received for the sold players is included) as that doesn''t seem likely - unless it is their contracts being included, which would ?

   

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[quote user="City1st"]''Subsequent to the year end the Club has acquired the registrations of players Lafferty, O’Neill, Cuellar-Jimenez, Rana-Jerome, McGrandles, Odjidja Ofoe, Thompson, and Miquel. ''yep, we signed these since the accounts were made (to June 2014)''The Club also sold the registrations of Snodgrass, Pilkington, Fer, and Surman for an amount in excess of the carrying value at the balance sheet date. ''yep, we sold those since the accounts were made (to June 2014) - and made a profit ie more than they were listed as worth

''The net payment to which the club is committed to in respect of these transactions is £13.6m with a maximum further amount due of £3.5m dependent on Club and/or player performance. ''is the club claiming that we spend a further £13,6m on buying the first named players (once what was received for the sold players is included) as that doesn''t seem likely - unless it is their contracts being included, which would ?

    [/quote]Highly unlikely.If the purchases amount to more than half of the receipts, I would have to say that we have been done up like a kipper.

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[quote user="City1st"]''Subsequent to the year end the Club has acquired the registrations of players Lafferty, O’Neill, Cuellar-Jimenez, Rana-Jerome, McGrandles, Odjidja Ofoe, Thompson, and Miquel. ''yep, we signed these since the accounts were made (to June 2014)''The Club also sold the registrations of Snodgrass, Pilkington, Fer, and Surman for an amount in excess of the carrying value at the balance sheet date. ''yep, we sold those since the accounts were made (to June 2014) - and made a profit ie more than they were listed as worth

''The net payment to which the club is committed to in respect of these transactions is £13.6m with a maximum further amount due of £3.5m dependent on Club and/or player performance. ''is the club claiming that we spend a further £13,6m on buying the first named players (once what was received for the sold players is included) as that doesn''t seem likely - unless it is their contracts being included, which would ?

    [/quote]Yes. Unless I and others are missing something obvious or an accounting subtlety (which is quite possible) then the club is saying this summer we spent £13.6m (plus a possible extra £3.5m) more buying those eight players than we did selling those four. I would have thought a question at the AGM clarifying this would be an idea.

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[quote user="PurpleCanary"][quote user="City1st"]''Subsequent to the year end the Club has acquired the registrations of players Lafferty, O’Neill, Cuellar-Jimenez, Rana-Jerome, McGrandles, Odjidja Ofoe, Thompson, and Miquel. ''yep, we signed these since the accounts were made (to June 2014)''The Club also sold the registrations of Snodgrass, Pilkington, Fer, and Surman for an amount in excess of the carrying value at the balance sheet date. ''yep, we sold those since the accounts were made (to June 2014) - and made a profit ie more than they were listed as worth

''The net payment to which the club is committed to in respect of these transactions is £13.6m with a maximum further amount due of £3.5m dependent on Club and/or player performance. ''is the club claiming that we spend a further £13,6m on buying the first named players (once what was received for the sold players is included) as that doesn''t seem likely - unless it is their contracts being included, which would ?

    [/quote]Yes. Unless I and others are missing something obvious or an accounting subtlety (which is quite possible) then the club is saying this summer we spent £13.6m (plus a possible extra £3.5m) more buying those eight players than we did selling those four. I would have thought a question at the AGM clarifying this would be an idea.[/quote]That would make our purchases worth about £30 million so obviously this is not right.The sales amount to at least £17 million if speculation is correct.

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I would suggest that the words " to which the club is committed to"do point towards wages, as why use the word ''committed'' rather than spent ? The figure would also roughly fit with what those wages would be over the course of their contractsthough more curiously is why the board felt the need to add this postcript to the accounts

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[quote user="City1st"]I would suggest that the words " to which the club is committed to"do point towards wages, as why use the word ''committed'' rather than spent ? The figure would also roughly fit with what those wages would be over the course of their contractsthough more curiously is why the board felt the need to add this postcript to the accounts

[/quote]But a club is not categorically committed to paying a certain amount in wages - a player may leave before his contract is up - whereas it is committed to transfer fees. And if wages are included then you would need to subtract the wages we had earmarked for the players who have left. More than that, if wages are included then the figure given in the accounts for last summer''s dealings of a net payment (ie cost to the club) of £20.1m (plus a possible extra £8m) doesn''t seem to make any sense. Given whom we bought and sold that figure looks very much like the difference between the £24m or so we paid in transfer fees for Fer, RvW, Hooper, Olsson etc etc etc  and the few million we got for Holt, Vaughan, Butterfield and Barnett.As to this being curious, this postscript is always there in the accounts.

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Not sure how relevant this is but I think we bought RVW in the 12/13 accounting period. I don''t have a copy of last years accounts. They missed me out[:''(] Or sent them to the old address[:$]

 

 

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"But a club is not categorically committed to

paying a certain amount in wages
- a player may leave before his

contract is up - whereas it is committed to transfer fees."it isit is called a contract - and these amounts are included in liabilitiesof course they can reduce due to a player leaving, but this reads like some sort of justification against thoughts of the club not committing itself to investing for promotion

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My own interpretation of that sentence was a its the total spend (£13.5m) on transfer fees since the accounting period closed with a possible extra £3.5m to be paid if certain criteria are met (international appearances,  no of starts and promotion clauses)    That would tie in roughly with our reported spend. 

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[quote user="City1st"]I would suggest that the words " to which the club is committed to"do point towards wages, as why use the word ''committed'' rather than spent ? The figure would also roughly fit with what those wages would be over the course of their contractsthough more curiously is why the board felt the need to add this postcript to the accounts

[/quote]

Surely the to "which the club is committed" refers to the fact that most transfer fees are paid in installments and as zipper says there is potentially 3.5m to pay in performance related add ons. Having said that, is it possible that the reason the net figure seems so high because we have only included the part of the fees that we have so far received in order to minimise the profit and thereby pay a little less tax?

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