Could the buck stop at Norwich City?

Michael Bailey American investors are casting their eyes in the direction of Norwich City, according to Stateside deal-maker Joe Kosich.The North Carolina merchant banker, who helped Tom Hicks and George Gillett take over at Liverpool three years ago, has been recommending the Canaries to investors looking for a football alternative to Major League Soccer - including a full overview of the club's financial situation on his widely read blog.

Michael Bailey

American investors are casting their eyes in the direction of Norwich City, according to Stateside deal-maker Joe Kosich.

The North Carolina merchant banker, who helped Tom Hicks and George Gillett take over at Liverpool three years ago, has been recommending the Canaries to investors looking for a football alternative to Major League Soccer - including a full overview of the club's financial situation on his widely read blog.

Norwich are openly seeking new investment to ease their �23m debts and fill a �2.5m gap in next season's finances - and Kosich already has people inquiring.


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“I've received several calls on the back of it about the situation in Norwich, about going into the club and what is going on there,” said Kosich, who would not name names.

“We are trying to compare and contrast a Championship-level club and let's say someone considering buying into the MLS. Here a club would cost $30-40m plus the costs of constructing a smallish stadium by English standards. If you take a look, it is better to invest in a strong Championship side.

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“In my view nothing is serious until there are letters of intention, but people are making pointed inquiries to me. Norwich seems an interesting one for them.

“The US is a fertile area for investment right now, although we have seen I think several American consortiums not do too good a job in the last several years, financial decisions that have created some problems.”

Kosich, who is currently working with the Club 9 Sport consortium as they attempt a �20m takeover at Sheffield Wednesday, admitted it was “unfortunate” how things have turned out at Liverpool, since the relationship between Gillett and Hicks turned sour.

But he cites Aston Villa owner Randy Learner as the role model for any American investor to follow.

Kosich has followed up the American interest with City chief executive David McNally and it may be Deloitte's recommendations to the Norwich board include money from the other side of the Atlantic.

The accounting firm are in the process of advising Norwich's directors on the best avenues to bring fresh capital into Carrow Road.

“I've exchanged email messages with David McNally but I've been advised to go through Deloitte who are handling the process, which is something unusual for me - particularly as I'm working on the other side in banking and as an advisor,” said Kosich.

“To be dealing with an accounting firm is a little bit of a different process but Deloitte are a great firm and they have a number of experts in the field, so I'm looking forward to it.

“We are on the lookout for clubs that may be attractive to investors, we put them through a general screening process and, by and large from that screening process, Norwich falls into that.

“We like the support they receive most of all. When you can fill up a ground to that extent it really says something. Eventually the size of the ground needs to be addressed because that would be the leading driver in increasing revenue.

“Going forward, the clubs that have some size and depth on top of a balance sheet that isn't leveraged (effectively bought using loans) - those will be a success.”

A keen golfer, Kosich funded a business in sport and entertainment finance that became a $50m going concern within 18 months and he is probably best remembered in England for putting Tranmere Rovers up for sale on Ebay in the summer - something he freely acknowledges was a publicity stunt.

Now Kosich believes the Canaries could be ripe for some American investor's pickings - be it fresh capital or a takeover.

“It's either or; capital is not an easy thing to find today, as everyone is realising. But the amount really depends on what you see when you take a look at things, the due diligence, and until you really get into the guts of the thing.

“I have an organisation in place to sort the wheat from the chaff in terms of who is serious and who the window shoppers are, and the club has to rise to the situation.

“It has to look at its wages-to-turnover ratio as it is causing them to tap into a deficit there. Payrolls in the Championship were substantially less than theirs and they were sides who were further up the table. Then there is Norwich's legacy of being in the Premier League.

“But it is a very compelling situation. They are going about it in the right way in terms of making progress and a concerted effort that they want to raise some capital and their level of turnover is a real plus.”

Kosich said it would be “inappropriate” for him to put a value on City, but posted in his blog a figure between one and 1.3-times the club's turnover would be reasonable - pricing the club anywhere between �18m-23.5m.

And the businessman believes it is the unrivalled loyalty of the Canaries faithful that would make the club such an attractive proposition compared to other English clubs for American investors.

“The community in Norwich should be extremely proud of the level of support they give their team,” said Kosich. “It helps value the club higher than it otherwise would. It hasn't been a good last few years and to keep the level of support so high is excellent.

“I wish the management in Norwich all the success in finding the investment capital and I'm hoping we can play some role in that. It is a gem of a club.”

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