Fresh appeal for new investors
PUBLISHED: 12:00 30 September 2008 | UPDATED: 15:48 10 September 2010
Norwich City chiefs have made a fresh appeal for new investors after reporting losses of £2.3m. Today's annual report, covering the year to May 31, shows the club's turnover fell by £5m from the previous year to £19m, and despite cuts in spending bosses have admitted deficits are set to rise further this season.
Norwich City chiefs have made a fresh appeal for new investors after reporting losses of £2.3m.
Today's annual report, covering the year to May 31, shows the club's turnover fell by £5m from the previous year to £19m, and despite cuts in spending bosses have admitted deficits are set to rise further this season.
And while club directors including Delia Smith and husband Michael Wynn Jones stumped up loans totalling £1.75m last year and have confirmed further loans of £2m for the current financial year, chairman Roger Munby said more investment was needed to achieve the club's aims.
While clearly a worrying sign for the health of the club, the scale of the losses is likely to be less than many fans feared.
Despite a fall in revenues from the Football League and “parachute” payments following the club's relegation from the Premiership, which were down £5.8m to £2.6m, the club has reigned in costs and generated extra income.
Income from catering rose, partly because of Carrow Road playing host to two home FA Cup games and a George Michael concert last year, and sales of players generated profits of £3.5m - up from £2.5m the previous year.
Despite concern over high wages, staff and player salaries were reduced from £14.4m to £13.6m and a revaluation of the club's 30pc share in the Holiday Inn hotel boosted assets by £1.6m. Debt also increased by £1.1m to £18.8m.
Mr Munby said: “The club remains hugely indebted to the incredible generosity of Delia Smith and Michael Wynn Jones, who have this summer alone committed £3m in loan funding to support our ambitious wage budget.
“The club's losses for season 2007/08 are likely to be exceeded in 2008/08 and despite the much needed financial help we continue to receive from Delia, Michael and the Foulger family, there is now a need for further investors to step forward and help underpin the ambitions of Glenn Roeder, the board and City supporters everywhere.”
Despite numerous reports of talks between the club and potential investors, Mr Munby said the board had “not received a single offer” to buy Mrs Smith and Mr Wynn Jones' shares despite their “repeated assertion that they have no desire” to remain majority shareholders.
And he said the club was “a robust, proud, community club” and pledged to keep tickets at the club affordable despite economic difficulties.
He added: “Despite the many challenges presented to us in the current economic climate and the bizarre economics of football, the board will not swerve from it's commitment to affordable, family football and to playing a full part in the community life of the great county we are proud to serve.”
The club's chief executive, Neil Doncaster, echoed the commitment that fans would not be called on to plug the gap in funding through ticket prices.
He said: “The way we have set ticket prices over a number of years has been focused entirely on making football at Carrow Road affordable to families.
“That's what we have based ticket prices on and why we have introduced interest free tickets and that's the basis on which we will continue to price tickets going forward.
“We don't think it's fair to try and recoup losses through tickets and will continue to charge a price which is affordable to families.”
And he said the expected increasing losses were not a threat to the club, saying the risk of being placed in administration was “not an issue” - despite the club's debts nearly matching turnover.
He added: “The only companies likely to find themselves in administration are ones with an inability to fund losses going forward and we are not in that situation because of cuts over the summer and the terrific support our directors have given the club.
“We are in a position where administration is not a concern for Norwich City or its supporters.”
And while prospects are largely gloomy at the club he said a good cup run could do a lot to boost coffers as well as confidence in the squad.
He said: “Ultimately making any predictions is a dangerous game as you never know what's going to happen. We don't know how we are going to fare in the FA Cup but if we have a good cup run that could have big benefits to our financial performance.”
He added: “It is not fair to point at any one event or put players or the manager under pressure as regards any particular game or performance, but clearly good performances can only be beneficial to the club going forward.”