Buendia sale crucial to £21.5m profit that helped fund City's summer revamp

Emi Buendia with Norwich City's Joint Majority Shareholders Delia Smith and Michael Wynn-Jones

Emi Buendia was voted Norwich City's 2020-21 Player of the Season and presented the Barry Butler Memorial Trophy by majority shareholders Delia Smith and Michael Wynn Jones - Credit: Paul Chesterton/Focus Images Ltd

The importance of player sales to Norwich City’s financial set-up has been emphasised this morning, as the Canaries’ annual financial report is published and shows a pre-tax profit of £21.5million. 

That is for the financial year for the 11 months from the start of August 2020, through to June 30 of this year, but largely owes its profit to the sale of Emi Buendia going through in June. 

That club-record sale to Aston Villa, understood to have been worth £33m with a potential further £5m in add-on fees and a sell-on clause, contributed to total transfer income of £59.5m.

Sporting director Stuart Webber revealed after the sale that the Argentine ace had made clear he wanted the move to Villa after three seasons with the Canaries, having inspired promotion as Player of the Season, with reports suggesting the playmaker's wages more than doubled to around £70,000 per week.

That also includes the sales of Ben Godfrey to Everton and Jamal Lewis to Newcastle following relegation from the Premier League last year and contributes to a total profit on player trading of £48.8m, once the £10.7m that was spent on new signings is factored in.

Without player sales, City made an operating loss of £26.6m, thanks to top-tier relegation and the continuing loss of income due to the Covid-19 pandemic - including ticket sales and catering income - which stands at around £30m since the outbreak prompted the suspension of the 2019-20 season and forced games behind closed doors.

That figure of £10.7m for incomings doesn’t include most of the post-relegation signings, such as Przemylsaw Placheta and Kieran Dowell, as they were completed before July 31 last year. The major purchases were Jordan Hugill from West Ham last August and Milot Rashica this summer, a deal that was completed in June. 

All of which – the overall £21.5m pre-tax profit posted, combined with incoming top-flight funds after promotion - informs the post-balance sheet spending of £52.7m during this year’s summer window since the start of July, the club’s biggest ever transfer outlay by some distance. 

That includes the eight arrivals other than Rashica, including Christos Tzolis, Josh Sargent and Pierre Lees-Melou, as well as the loans of Ben Gibson and Dimitris Giannoulis being made permanent. 

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In addition, City could be due to pay another £22.7m from various add-on fees, most of which would be activated by Premier League survival, including the loans of Mathias Normann and Ozan Kabak being made permanent. 

It’s a complex recipe that illustrates the club’s self-funded model, in a world of clubs owned by billionaires and investment funds, and the continuing financial stability of the Canaries when set against big EFL clubs with financial problems, including Derby, Reading and Sheffield Wednesday. 

“Included in these financial results were the sales of Jamal Lewis, Ben Godfrey and Emi Buendia, so significant profit from player sales,” explained finance director Anthony Richens, at a media briefing that was already scheduled before Saturday’s worrying 7-0 loss at Chelsea. 

“If you strip those out it would have been a loss of around £27million, again highlighting the importance of recruitment to the club’s model. 

“It’s key for us to recruit not only young but players of a resaleable value so that they can impact on the pitch but should they ever need to, the club has assets to be able to call upon. 

“It’s a key part of Stuart (Webber) and the team’s recruitment policy.” 

Norwich City finance director Anthony Richens at Carrow Road

Norwich City finance director Anthony Richens - Credit: Adam Harvey

It’s believed City, after such a busy summer window, are unlikely to spend much during January – but cash could be freed up if required. That is set against a degree of uncertainty though, due to the current Premier League struggles and head coach Daniel Farke being under heavy pressure. 

- You can watch further analysis and our full interview with Richens in the video above

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