Norwich City's £7m black hole

PUBLISHED: 09:46 25 September 2007 | UPDATED: 10:35 14 September 2010

Norwich City chief executive Neil Doncaster admitted the club faces an “incredibly tough” future and refused to rule out the selling off of players to balance the books.

Norwich City chief executive Neil Doncaster admitted the club faces an “incredibly tough” future and refused to rule out the selling off of players to balance the books.

Speaking at the club's unveiling of the annual accounts, Doncaster revealed there is a £7m black hole in the accounts after the Canaries' Premier League parachute payments ended last season.

Doncaster added that he will be monitoring the situation on the field very closely over the coming weeks after looking on with dismay at the Canaries' performance in the 2-0 defeat to Wolves at the weekend.

The warning came as City's accounts for the 2006/7 season showed a £90,000 profit, with debts reduced from £19.2m to £17.7m.

Despite the apparent positives, Mr Doncaster said: “Those figures include the final £7m parachute payment. You have to remember that this year we will not have that payment, which has been made since relegation from the Premier League.

“The situation this club faces is incredibly tough.”

He added: “I don't think it's helpful to rule in or rule out the sale of any particular player. Players will continue to come and go. We need to try to work towards a situation where we don't have to sell players for financial reasons.”

Shaun O'Hara, director of finance and operations, said: “If you consider we've only just made £100,000 profit this year, losing £7m is going to be a considerable challenge.

“As a club we've got to do everything we can to reduce the loss. Making a profit on player trading is one way of doing that.”

Mr Doncaster added that there was “cash available” to spend on loan players to give a short-term boost to the Canaries' efforts to get away from the foot of the table.

But he gave a stern assessment of Saturday's surrender at Wolves, which Grant himself labelled the “worst I've ever seen”.

Mr Doncaster said: “We should certainly not be where we are in the table at the moment. Our supporters do not deserve what they witnessed on Saturday. They are entitled to expect better performances.

“The board continues to monitor progress on and off the pitch on a regular basis.”

It was also revealed that joint majority shareholders Delia Smith and Michael Wynn Jones had wiped £800,000 of the overall debt of the club by converting an outstanding loan into £30 shares.

Also present at the unveiling of the accounts was Sharon Turner, who with her husband Andrew has joined the board and handed over a £2m interest-free loan.

She sounded a note of hope, saying: “It's not our intention to be in a position where we have to sell players to fill the financial holes. We're working really hard on looking at ways to close the gap without cutting costs or selling players.

“We have to plan to break even next year by generating income through other areas. We are open-minded about putting more money in.”

The 2006/7 figures include a £2.5m profit on player sales, with those who left including goalkeeper Robert Green and striker Leon McKenzie.

Player wages dropped by £1.6m, while gate receipts increased slightly by £100,000.

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