NORWICH CITY are one of football’s yo-yo clubs, bouncing between divisions with regularity, mostly without a sense of panic that grips many clubs when they suffer reversals. The club is also one of those football institutions that people genuinely like – unthreatening, unassuming and surviving on a diet of little victories and the ability to periodically mount a successful promotion campaign. In the modern game, clubs like Norwich have no alternative unless a Russian oligarch flies over East Anglia and takes a fancy to Carrow Road.
Norwich are back in the Premier League and it’s tough. After losing at home to Watford, they fell to the bottom of the table and extended a miserable sequence to six defeats in seven games. They’ve won just two of their 12 fixtures, although one of them was at home to champions Manchester City. A victory that may grow in importance as the season progresses.
At the same time, while Norwich have struggled on the pitch, they’ve also released their financials for 2018-19 and revealed a loss of around £ 38 million. Although that compares unfavourably to 2017-18’s profit of £ 14.6 million, that shouldn’t worry Norwich too much given they are in the Premier this season and revenues should go well north of £ 100 million. Huddersfield, in their relegation season, received payments totalling £ 96 million.
The 2018-19 season was Norwich’s first without a parachute payment since their relegation in 2016. This meant the club saw revenues decline from £ 62 million in 2017-18 to £ 34 million. Norwich received parachute cash of £ 41 million and £ 34 million in the previous two years.
The club didn’t increase its player costs significantly, but the wage to income ratio, including bonuses, went above 100%, not unusual for the Championship. Subtracting the promotion bonuses, Norwich’s wage bill was 73% of turnover, up from 50% in 2017-18 due to the drop in overall revenues. Norwich clearly committed themselves to a promotion bid, although they didn’t have the benefit of a substantial profit from player trading, despite the sale of James Maddison to Leicester for £ 20 million in July 2018.
Norwich’s matchday income totalled around £ 19 million from an average crowd of 26,017, slightly up on the previous season. Norwich’s support base is a loyal one, with 20,000-plus season tickets sold. This equated to a stadium utilisation rate of 95.5%. Carrow Road is a small, neat and attractive ground, but the club is currently reluctant to extend its capacity. CEO David Kensell said earlier this year: “Speaking honestly, with our financial position, we would need to have a sustained period of time in the Premier League before we could actually commit to making movements.”
Norwich have invested in their academy and training facilities and also opened The Nest, a new community hub. They spent around £ 6 million on their academy and also used the money raised among investors to add a state-of-the-art gymnasium. They paid back £ 3.5 million related to the Canary Bond that helped to build these facilities.
The club is confident of a turnaround in financial performance. Company Secretary, Ben Dack, told the media: “The big positive is that we know next year, irrespective of what happens, we will turn a profit. Whether we retain Premier League status or get relegated will determine just how big those profits are.”
However, the loss for 2018-19 may restrict the club from strengthening its playing resources when the next transfer window opens. At the moment, it looks as though they might need something better to avoid relegation. Defeat at the hands of Watford, the Hertfordshire club’s first win of the season, is never going to look good. Head coach Daniel Farke, who called the game “a disaster”, is popular and people like his approach, but at some clubs, he would be in an increasingly precarious position. Maybe not at Norwich City, a club that seems to have a sense of realism about its purpose and objectives.