Doncaster is master of understatement
DAVID CUFFLEY The price of failure for Norwich City - failure, that is, to secure a swift return to the Premiership - was outlined in clear black and white when the club's annual accounts were issued yesterday.
The price of failure for Norwich City - failure, that is, to secure a swift return to the Premiership - was outlined in clear black and white when the club's annual accounts were issued yesterday.
If anyone had any doubts about the financial implications of missing out on promotion next May and having to spend a third successive season in the Coca-Cola Championship, the figures for the year ending May 31, 2006, will have served as a stark reality check.
Chief executive Neil Doncaster warned of a “challenging environment ahead if we aren't promoted”.
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Though he stressed that none of this should come as a surprise - and the decrease in TV revenue and the absence of Premiership “parachute” money from next season onwards have certainly been well documented - the phrase “challenging environment” appears to be something of an understatement.
The annual report showed City's profit after tax for the year as £2.5m, compared to £7.6m for the year ending May 2005. But that surplus was only made possible by a £6.1m profit in the transfer market and the first of two parachute payments of £7.1m received by the club after relegation from the top flight in 2005.
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The second parachute payment, for the current season, will be included in the financial figures issued in a year's time.
But with that payment disappearing in 2007-08, Doncaster warned: “There is a very challenging environment ahead if we are not promoted.”
As the facts and figures dropped on the doormats of City shareholders yesterday morning, he observed: “It is a sobering thought that, despite the many millions of pounds of television money we received during our short stay in the Premiership, the club's overall cash position only improved by £0.7m that season.
“In the year covered by these accounts, and despite a £7m parachute payment, the club's cash position worsened by £1.5m.”
And Shaun O'Hara, director of finance and operations, stressed: “It is imperative that the club has a successful season during 2006-07 to protect out income streams going forward.
“Failure to win promotion at the end of 2006-07 will reduce our income by a minimum of £7m following the loss of Premier League parachute payments.
“While the club remains in the Championship it will be necessary to balance the cashflow and generate surplus funds for future player acquisitions by selling assets.”
Though it is his passionately-stated aim, it would be something bordering on a miracle, given the circumstances in which he took over, if manager Peter Grant can steer City back to the top flight as soon as next May, yet the financial picture painted yesterday suggests it will only get more difficult with each passing season.
Grant's chances of splashing out in the January transfer window are not helped by the fact that the Canaries have so far received only £650,000 of the £2.1m total coming their way for the sale of Robert Green to West Ham and Leon McKenzie to Coventry in August, and they won't get the last instalment until June 2009.
Doncaster declined to set a figure on how much the manager may have to spend next month, saying only: “We are totally committed to giving the manager as much support as we can.”
Neither does it help Grant that City will be unable to offer such lucrative contracts to players whose current deals run out at the end of the season.
With City setting different salary levels for Premiership status, Championship status with parachute money, and Championship status without parachute money, their star men will have to settle for the prospect of less in their pay packets or seeking more lucrative employment elsewhere.
Not that they did so badly last season. One thing in the balance sheet that may have surprised shareholders is the fact that the total players' wage bill in the Coca-Cola Championship in 2005-06 was almost as high as in the Premiership campaign of 2004-05, down only £2m from £11m to £9m. The club's total staff costs were cut by only £1.5m, from £16.9m to £15.3m.
Explained Doncaster: “The board believed it should back the judgment of former manager Nigel Worthington and did so, sanctioning player wages during 2005-06 which were only marginally lower than during our year in the Premier League.”
Does that admission - coupled with the voluntary disclosure in “post balance sheet events” that Worthington's pay-off after being sacked was no less than £600,000 - suggest that, nine weeks on, there is just a subtle shift in the official Carrow Road line on a man they spoke of in glowing terms as “one of the great Norwich City managers” the day after he was shown the door?