The author of the impressive Swiss Ramble blog has turned his attention to the finances of Norwich City and in general gives them a clean bill of health. They have mixed sporting success with financial prudence.
The author of the impressive Swiss Ramble blog has turned his attention to the finances of Norwich City and in general gives them a clean bill of health. They have mixed sporting success with financial prudence.
He concludes that very few clubs are as well run as Norwich City, but their business model does have its limitations. It is a double edged sword as better recruitment may have helped them escape relegation from the Premier League which meant that they missed out on the mega TV deal.
They had to spend in the January transfer window to try and avoid the drop. As a result, they faced a sellers’ market. In my view it is always risky to spend then as one often is faced with a mix of high prices and uncertain quality.
The Canaries recorded bigger profits than Arsenal. However, they benefitted from £21m of one off player sales. Without this they would have recorded losses of £8m. However, they did clear all their external debt, although it was one of the lowest in the Premier League anyway.
Revenue growth outside the television deal has come to a grinding halt. Their shirt deal, worth £1m a year, is paltry compared to that of the top clubs. Attendances have been good at Norwich and have usually held up well when they have been relegated. In my view this reflects the fact that Norwich are a ‘stand alone’ club with no geographical competition in the county of Norfolk.
The capacity of Carrow Road could be expanded, but this would require an external loan so the club would want two or three years in the Premier League before considering it. Delia Smith and her husband are not rich owners, but they have no intention of selling and their presence has contributed to long-term stability. Ownership will eventually pass to relatives.
It should be noted that because Norwich were relegated after one season in the Premier League, they will only receive parachute payments for two seasons. This makes securing an early return even more imperative.
The Swiss Ramble blog notes that all five Premier League clubs that have reported their results for 2015/16 have declared profits. This is no surprise given the nature of the television deal.