City’s finances: The allegations and the truth
PUBLISHED: 10:51 04 October 2007 | UPDATED: 10:36 14 September 2010
Why the Canaries are NOT a club heading for financial disaster.
“The club's debt is too large”
The debt is certainly larger than we would prefer, but it remains structured, repayable over the long term and entirely manageable. Most of the debt arose from the club's £15m securitisation in 2003. The club's debt actually came down last season, from £19.2m to £17.7m, partly based on the club making a repayment against the loan last season of just under £1m.
t “The Club's £15m securitisation loan is an albatross around the Club's neck”
At the time the club took this loan out, the South Stand had been condemned and needed to be re-built. The alternative was the Club's capacity being cut to around 16,000 - something that was unthinkable and would have seriously restricted the club's income going forward. There is no doubt that the securitisation loan was the only way to pay for the Jarrold Stand. Its repayments remain budgeted for, structured over the long term and affordable.
t “The fact that we broke even last season with a £7m parachute payment means that we will lose £7m in cash this season”
No, this year, there are a number of things that are different from last year. For example, we have a £0.8m solidarity payment from the Premier League; last year's figures include a £0.5m tax charge; we have a profit on player trading over the summer of around £2.6m; we have valuable land assets that can be sold; within last year's figures were just under £4m of 'non-cash' items, such as depreciation. It's very easy to see how broad-brush judgments in headlines can quickly become doom-laden over-simplifications.
t “The Club should be looking for new investors”
The club is always happy to talk to people who want to put money in to assist with our ambitions on the pitch. It is a fallacy that there are people queuing up to do this. There are many people who are looking to make a return on their money - very few who wish to magnanimously gift money to their local club. Let's remember that Delia and Michael put over £1m into the club last season (through a combination of purchase of new shares and conversion of their loan) and Andrew and Sharon Turner also put in £2m of their company's cash.