Last year’s Premier League campaign helped Norwich City’s accounts bounce back to a £2.1m profit - despite losing more than £12m in the first few months of the Covid-19 pandemic.
The club have unveiled their annual accounts, which show the “significant” impact the pandemic had, and continues to have, on the club’s finances - with fans not expected back into Carrow Road until March 2021.
The accounts cover the financial period of 13 months until July 31 - a month longer than usual to mirror the unprecedented extension to the league campaign.
Coronavirus slashes profit
The club’s forecasted profit failed to materialise following the outbreak of the pandemic, with £12.7m spent on rebates and safety measures.
This figure includes rebate to broadcasters totalling £7.1m, and a further rebate to season ticket holders of £3.1m.
Season ticket sales had improved ahead of the Premier League campaign, up by 365 to 20,622, with average attendances increasing by almost 1,000 to 27,005 while fans were allowed to attend.
Additional coronavirus costs include making the stadium, training ground and workspaces Covid-safe, as well as the introduction of a regular testing programme for players.
Chief operating officer Ben Kensell said: “It is a challenging period for the club but we have got a really robust business model which has been worked on for the last three years.
“This is not a fluke.
“We are reliant on that resilience we have had as a result of building up that business model and strengths we had across our financial pillars from income, player trading or broadcast and we were in a seriously strong position before Covid.
“The parachute payments are massively important because it allows us a cushion and to be competitive moving forward. The work done to ensure our contracts mirror the league we are in is very important and is something we are relying on as a self-financed club.
“That is our way and it has been relatively successful.
“I think the important thing is to have a competitive team on the pitch and an enthused proactive team off the pitch.”
Premier League boost
Broadcast revenue, which had been significantly increased following the club’s promotion in 2018/19, played a major role in boosting the club’s finances, which showed a loss of £38m the year before.
In 2020, broadcasting income totalled £90.2 million, a major increase from £9m the year previously, while sponsorship and advertising increased to £10.3m from £3.8m.
Finance director Anthony Richens said: “What we continue to show is that the club is robust and a good model of what we are running with.
“Despite the Covid losses we can still post a profit and it shows what the Premier League does for the football club.
“You can see the difference in revenue for broadcasting income. Our model means whether we go down or stay up is something we don’t have to gamble with, and we want to make sure the club will be able to cope with the loss of the Premier League income.
“Staff have worked tremendously hard behind the scenes. I joined the club in July and walked into some really fantastic forecasting models which allows us to be flexible depending on what the government announces.”
When will fans return?
Despite the offer of top-flight football, income from gate receipts and ticket sales fell from £9.7m to £7.6m as a result of having to play a number of games behind closed doors.
The situation, however, seems unlikely to change soon, with the accounts stating current restrictions are expected to last until at least March 2021.
The report states: “At the time of issuing these financial statements, government restrictions placed on elite sporting clubs, in an attempt to control the coronavirus pandemic in the UK, has meant that it is currently illegal to have supporters in football grounds with the restrictions expected to last until March 2021.
“The club’s match day income generation, which makes up a maximum of 25pc of revenues, is therefore expected to be severely impacted.”
Wage bill and new arrivals
The club recorded a turnover of £119.3m in the latest accounts, with the club’s wage bill representing 75pc of this.
A total of £18.5m was spent on player registrations, which includes transfer fees, agent fees, signing-on fees and further contingent payments, as well as new contracts for existing Canaries.
A number of players were rewarded with new contracts following the successful promotion campaign, including Tim Krul, Todd Cantwell, Teemu Pukki and Emi Buendia.
In 2018-19, the club’s wage bill was 162pc of the turnover following promotion bonuses and the end of the Premier League parachute payments in 2017-18.
Following the end of the financial period, the club have also spent £6.1 millon on Kieran Dowell and Jordan Hugill, as well as the season-long loans of Oliver Skipp, Xavi Quintilla and Ben Gibson, with a potential further £4.6m due dependent on club and player performances.
Shareholder’s loan
For the third year running, the accounts show a £250,000 loan owed to majority shareholders Delia Smith and Michael Wynn-Jones.
The club have, however, been working on their “robust and self-financed” business model during that time.
Mr Kensell said: “Delia and Michael are the heartbeat of this club and they are the ones who lead on us being self-financed.
“Everyone has shared responsibility but we are very fortunate to have a thriving academy producing talent and will continue to produce that pathway for players to be given the opportunity to play for Norwich City Football Club.
“That, coupled with our very clear focus on trying to grow revenues despite the pandemic and being as efficient as we can make up a competitive self-financed club on and off the pitch.”
Community and charitable activity
When on-field action was suspended, the club and it’ charity partner, the Norwich City Community Sports Foundation, sought to emphasise their role in the commmunity.
With a donation of £200,000 from first team players, directors and senior staff, the Canaries Covid-19 Community Support Project was established to tackle the effects of the pandemic.
Focusing on the welfare of the community during the first lockdown, more than 7,000 phone calls were made to potentially vulnerable season ticket holders and members, some from players and senior staff, while 2,500 care packages were delivered into the community, including 640 social care providers in Norfolk and Waveney.
After funding production in conjunction with Norwich School, 13,898 PPE items were delivered in one week, while nearly 300 hours of voluntary work was completed by club and foundation staff.
Throughout the season, 250 signed pennants were delivered to good causes for fundraising, while three external ground collections took place to raise funds for the Royal British Legion, Leeway Domestic Violence and Abuse services, and the Soul Church Foundation.
The annual report also highlights player appearances at local hospitals and children’s hospices at Christmas, as well as in-person and online appearances with Foundation programmes.
Mr Kensell said: “The staff have been phenomenal and the resilience shown by them and our colleagues in the community sports foundation. We should be proud of everyone who works at the club and of the community role we have in Norwich, Norfolk and wider afield.
“Everyone was pulling in the same direction and that is genuine. It is not just words on a piece of paper.
“We are robust financially but, more importantly, we care massively about our community. When our community needed it most we wanted to reach out and help.”
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