Financial staff at Norwich City will certainly be earning their money in the months to come, as the Canaries’ executive committee explained when revealing the complexity and uncertainty of football’s enforced coronavirus shutdown.
Financial staff at Norwich City will certainly be earning their money in the months to come, as the Canaries’ executive committee explained when revealing the complexity and uncertainty of football’s enforced coronavirus shutdown.
The Premier League season was postponed on March 13 and, set against the backdrop of a global pandemic which has claimed around 20,000 lives in the UK so far, looks unlikely to be returning any earlier than June.
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City sit bottom of the table and six points from safety with nine games left to play but even before considering the potential of the huge drop in income that relegation would bring, senior staff are planning for a loss of between £18million and £35m.
That is the financial hole being planned for, led by the executive committee of chief operating officer Ben Kensell, business and project director Zoe Ward and sporting director Stuart Webber.
That figure is based on the loss of around £9m in match-day revenue and the commercial impact of having to play remaining games behind closed doors, when it is safe to do so, with the Canaries due to host five league games and an FA Cup quarter-final against Manchester United.
Those losses are combined with a potential loss of broadcast income between £10m and £25m, with clubs potentially having to share the cost of a rebate of £762m which would be due to broadcasters if the campaign cannot be completed.
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Conclusion of the season remains the priority for the Premier League, with the hope of minimal impact on next season, other than a later than planned start date - yet it remains unclear if that will be possible amid the health crisis.
For City, a self-funded club without a wealthy benefactor to provide financial strength, which had been on course for a £16million profit for the 2019-20 financial year, the situation is demanding some careful planning to ensure stability.
Chief operating officer Kensell explained: “Ultimately we have to look at the worst case scenario for a self-financed club. It’s our duty as an executive committee to paint the worst picture to our board to ensure that we’re covering all different variables that are still up in the air.
“Let’s be clear, it breaks down into two different areas here. We’re talking the club controlled income that we’ve lost as a result of playing behind closed doors and then you’ve got the very variable nature of what’s happening with the broadcast piece.
“With the broadcast piece we broadly can’t answer at the moment. We can take a best guess, which is what we’ve done, but the club controlled element of it - the £1.5m per match – is obviously season tickets, membership and corporate hospitality rebates for those customers and fans that have effectively bought them and have the right to come to the ground.”
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Those rebates may not necessarily be demanded by all supporters, while commercial and broadcast partners may be able to negotiate deals to help ease the blow - such as broadcasters being able to show more live games during the 2020-21 season.
Yet City’s top brass have moved quickly, finding £2.5m in savings and agreeing with HMRC to delay tax payment, expected to be in the region of £18m, until 2021.
Kensell added: “Is it worst case scenario? No, actually it’s probably quite realistic. We’ll obviously do everything that we can to ensure that we mitigate that and get that as low as possible.”
Part of that £2.5m in savings is the club using the government’s Coronavirus Job Retention Scheme, with 200 non-playing staff furloughed but still getting paid fully, with the government covering 80pc of wages and City the remaining 20pc. While far wealthier clubs Liverpool, Tottenham and Bournemouth bowed to public pressure and opted against using the scheme, the Canaries’ senior staff felt their delicate finances needed the support.
Business and project director Ward said: “We’ve obviously only furloughed staff who literally cannot work at this moment in time, we’ve got at least 50 percent of the workforce still working, in lots of different areas across the club.
“We’ve taken this decision to protect our staff, not only now but in the future. So what we wouldn’t want to do is have a situation where we don’t furlough now and don’t know where this will go, what will happen and what the impacts will be.
“We don’t want to have to make staff redundant because we haven’t done this now, so it was really important for us to protect the staff at this moment in time.”
- Check back to this website for more from City’s executive committee on the club’s financial challenges throughout today, or pick up a copy of the Eastern Daily Press or Norwich Evening News
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