Norwich City spell out reasons behind �23m debt
Chris LakeyNorwich City's hierarchy last night outlined the financial fall from grace which has run parallel with the rise and fall of the club's fortunes on the football field.Chris Lakey
Norwich City's hierarchy last night outlined the financial fall from grace which has run parallel with the rise and fall of the club's fortunes on the football field.
Chairman Alan Bowkett used the annual general meeting to highlight just where the money had been spent in the past six years - and why City now find themselves �23m in debt and desperately searching for new investment.
While manager Paul Lambert is doing the business with the team on the field, it's the business in the corridors of power that has crumbled, leaving a huge financial black hole which Bowkett and chief executive David McNally have been charged with filling in since they took over as the clubs' top brass last summer.
The starting point was 2003-04, when City had �2.7m in cash in the bank and debts of �18m. Since then the club has generated �43.475m in ticket sales - 40pc of which are subject to some kind of concession or other.
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And while the worst team in the Premier League will pocket �40m in broadcasting rights, City will get �600,000 and �30,000 for a live match.
If City go up this summer, they will be eligible to �2.7m in broadcasting rights - and possibly another �1m as their share of parachute payments if Newcastle and West Brom go straight back up to the top flight.
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Catering has generated �20m in the past six years - a figure that McNally said was truly remarkable - while commercial revenue on such things as advertising and sponsorship brought in �25m. Other income topped it up by �7.4m.
But the dark side of the financial picture is the cost of putting a team out on the pitch - �48m went in players wages and bonuses.
Then there was �4.8m to pay loan players - �2.2m of which was spent last year. Footballing staff - coaches, physios, office staff - cost �10.8m, including �1.4m compensation for the four managers mangers who left the club in that six year period.
Total footballing costs were �59.2m on revenue of �138m - 43pc.
Other staff cost the club �27m while operating costs came to �40.3m.
'We are in tough times financially,' said McNally. 'We are looking to work more closely with our suppliers and pout more contracts out to tender and we will be looking for discounts. We will be asking for their extra help.'
Players sales brought in �19.8m while players purchases brought �19.9m, including agents' fees of �1.2m.
Some assets - land - has been sold for �7.7m while �25m was spent on the club's assets, including the building of the Jarrold Stand for �9.2m and �1.8m on roads.
City's loans over the years have cost �9m in interest, while �17m worth of loans have been repaid. City have borrowed �26.8m over the past six years to manage it all.
'About �21.5m of that was hard commercial loans and we had �5.4m of soft interest-free loans form other directors - without those loans we would not be here today,' said Bowkett.
'Our hardware is great, our software in terms of our football team is great, the difficulty ahead is restoring out balance sheet issue.'