NORWICH CITY, one of English football’s genuine yo-yo clubs, enjoyed a 134% rise in income in their last Premier League campaign. On the face of it, that looks like good news, but the season ended in relegation and a pre-tax loss of £ 23.6 million.
The club’s revenues were a record £ 133.9 million versus £ 57.2 million in 2020-21. It was the second time in three years earnings have been risen above £ 100 million. But like Norwich’s playing status, their financials fluctuate, emphasising the gulf between the Championship and Premier League.
However, the club refuses to believe they cannot compete with the big-spending Premier League. Norwich’s record is such that they are currently playing in a different division for the fifth consecutive season. In the past decade, they have won promotion three times and have been relegated four times.
Norwich’s CEO, Zoe Ward, said that while rubbing shoulders with big names with greater resources is a challenge, it is not insurmountable. “We have the fanbase, the infrastructure and staff to compete,” she said. “Relegation is disappointing, but our model allows us to bounce back.” Norwich have a loyal audience and season ticket sales were over 20,000, but the way they were relegated in 2021-22, with just 22 points, suggests it might be a little harder to return at the first attempt. They are currently in the top seven, but recent form has been poor.
Although their wage bill when they are in the Premier League – £ 118 million in 2021-22, 88% of income – is lower third, it will be among the highest in the Championship. Norwich are paying an uncomfortably high level players wages, the average wage was £ 45,600 per week, the highest in their history. The club is smart enough to have relegation clauses embedded into contracts, which means the cost for 2022-23 will be much lower.
What is also clear is Norwich’s flow of saleable talent seems to have temporarily dried up. In 2021-22, they made very little from player sales, unlike 2020-21 when they made a profit of £ 59.6 million. The sale of Emiliano Buendia to Aston Villa in June 2021, for £ 38 million, was included in the previous accounts.
There were some positives, however. Their commercial revenues totalled £ 21.2 million, a best-ever figure, while they made over £ 100 million (£101.8 million) from broadcasting for the first time. Matchday income totalled £ 10.8 million as normal services were resumed.
But the lack of player trading profits meant the club had to cover its losses through other means, especially as the pandemic hit Norwich quite hard. Their borrowings went up to £ 48 million, almost £ 20 million higher than the previous season. Consequently, the club’s net debt is now £ 44 million.
Norwich City are the sort of football institution that investors are eyeing at the moment as they seek out opportunities beneath the elite band of clubs. They recently gained a new shareholder in Mark Attanasio, an American businessman who owns the Milwaukee Brewers baseball team. Attanasio, who comes from the Bronx in New York, has acquired 16% of the club from long-time shareholder Michael Foulger. At some point, the club’s majority shareholders, Delia Smith and her husband, Michael Wynn-Jones may decide it is time to dispose of their stake.
The Canaries, as a forward-looking Championship club, at the very least, would be an attractive proposition, but anything lower than that would make them less appealing. Their track record in recent years indicates it won’t be long before they are in contention for a place back in the Premier League, but are they really equipped to do it this time?