City reveal multi-million pound costs of coronavirus impact
- Credit: Archant
Prior to the coronavirus pandemic grinding normality to a halt, Norwich City sat in a very healthy place financially.
But overnight the Canaries revenue stream dried up - from thriving off the pitch, like numerous businesses around the country, they saw their trade paused for a prolonged period.
City will emerge from this crisis with a £12million shortfall, with a further £3million in contingency planning depending on when supporters return to Carrow Road.
In the summer of 2018, the Canaries were forced to part with James Maddison in order to repair a reported financial drop off of £20million after parachute payments.
Yet, City won’t have to dispense with their key players this time around, with that deficit being repaired over a three-year period, as Kensell explains: “The parachute payment helps massively. “It’s almost a holistic view of the finances over three years, that’s how you challenge a hole like that.
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“It’s not just through player trading - what you have to remember is that the club has club controlled income that we can actually grow and we have done that very successfully.
“There is an element of player trading but we also have to be flexible and creative with the parachute payments and how we can build bridges that can help us to fill that gap,” Kensell added.
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“It is significant. That’s why it has been challenging for us because as a self-financed club we have to do things so differently to other clubs.
“We’re not dependant on that owner investing into the club because, quite frankly, they don’t need to. We have proved that we can run it sustainably.”
The Canaries were bracing themselves for an expected loss in income of between £18million and £35million at the beginning of this period - but the picture has ended up healthier than first anticipated.
In part, that is due to a number of sponsors electing to waive their rebates, something that saved the club millions of pounds.
Supporters did take their rebate however - with 38,000 people opting to take their owned monies.
80 per cent of fans decided to claim the refund - with 10 per cent deciding to donate to the academy and the Community Sports Foundation. In total, the rebate process cost the club £3.3million.
After placing such an emphasis on improving the club’s financial outlook - Kensell has been left frustrated with the setback, but he is keen to draw the positives from this challenging period for the club.
“It’s frustrating but out of something like comes some green shoot of positivity.
“You can look at the negatives but you can also draw positives out of the situation and that’s what we’re trying to do.
“It’s not ideal. Would we be in a financially better position? Yes. But we can do nothing about that. People’s health is far more important than anything else.
“This club needs to be self-financed and self-sustainable for many years to come. That’s our aim. We’re just custodians so our job is to put it in the best place it can be.”
The Canaries were heavily criticised for placing members of staff on furlough, becoming the only top-flight club alongside Newcastle United to do so.
Tottenham Hotspur, Newcastle United and AFC Bournemouth originally planned to furlough staff but rode back after criticism from supporters.
Arsenal announced last week that they to make 55 members of staff redundant, something that the City chief hopes won’t be the case at Carrow Road.
“We don’t want to lose any staff. I go on record by saying that I think we have an excellent staff base here and that momentum is so key.
“Our values are not that of other clubs. We place a lot of emphasis on our staff delivering success for the whole of the football club.
“I’m not going to pass judgement on other clubs. They have to do what they have to do. That will be our last option.
“From our perspective, that isn’t the route we want to go down but we had to furlough. We don’t apologise for that as a club. To safeguard the future of the club, that’s what we had to do.”
While many EFL and Premier League clubs face upto a bleak financial future, City have strived to be proactive in their approach.
The road ahead is just as untravelled, with partial re-opening and a Championship promotion assault to deal with on the pitch.
Reflecting on this period personally, Kensell said: “Challenging, but we’ve learned loads about each other. We’ve learned about resilience, that’s become a key word for us.
“It’s not just me that leads it, there are plenty of other people within the business I class as leaders.
“Stuart (Webber) and Zoe (Ward) alongside me have been really proud of the efforts of the team, the supporters and everyone really. It’s a beautiful part of the world, Norfolk. It makes you appreciate things more when things like this happen.”