Norwich City publish financial report for 2020-21 season

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Posted:
9 a.m. on October 27, 2021



There is reassuring familiarity with Norwich City’s annual financial results after managing to post a profit of £ 21.5million as the Canaries soar to the league title, despite the continued impacts of Covid-19 .

In total, City estimates that the pandemic forcing games behind closed doors has cost them around £ 30million in expected revenue since its outbreak, but their finances make for a rather heartwarming read despite these challenges.

Familiarity comes from a set of 2020-2021 accounts – for the 11 months through June 30 – which once again tell the story of a club run in a reasonable and sustainable manner while long-term health is priority over the financial risks that a funded auto club should pursue short-term success.

So despite the pandemic forcing football behind closed doors and the collapse of some revenue streams, City have still been able to invest £ 4.2million in improving the infrastructure of Carrow Road and the Lotus Training Center, as well as £ 250,000 to complete community sports. Foundation Community Center near Hellesdon, The Nest.

With finances in such a delicate state for many EFL clubs – with transfer embargoes for clubs like Hull and Reading, and point deductions for Derby and Sheffield on Wednesday in the past year – and huge debts of continuing concern in the league, Norwich continue to chase their Premier League Dream amid relative safety.

City were able to spend £ 52.7million in the recent summer transfer window following this year’s promotion, and £ 22.7million in additional fees could follow as well, mainly depending on whether the survival of the Premier League can be reached – as shown by post-balance sheet transactions.

However, this self-financing status is inevitable.

Without a £ 48.8million profit on player sales in FY20-21 – mostly sales of Emi Buendia, Ben Godfrey and Jamal Lewis – then the Canaries would have recorded an operating loss before tax of 26.6 pounds sterling. m

This is where familiarity comes into play, even with some leeway allowed for the pandemic, as door revenue dropping from £ 7.6million to just £ 118,000 due to most games played. without spectators, or catering revenues of £ 4.6million to £ 415,000 with club restaurants forced to close.

It’s the drop in turnover, mainly due to broadcast revenue, that City supporters will recognize, however – after the club’s third relegation in seven seasons.

Returning to the Championship, turnover fell from £ 119.3million to £ 57.2million as broadcast revenue fell 47% to £ 90.2million in Premier League at 48.7million – a significant portion of which comes from Premier League parachute payments for relegated clubs. .

Among the various facts, figures and required financial audits included in the report is the “going concern” section, which indicates that the financial forecasts have been made until the end of 2023-24 and that the chances that the City encountering financial difficulties in the next 12 months are “considered distant”.

This is in light of the continuing economic threat from Covid-19, in anticipation of hard hit income again, as if football is being forced to back down behind closed doors.

One element of football’s finances that is often overlooked is that promoted teams do not get Premier League money when they arrive – estimated at almost £ 100million for the bottom team – but in stages .

Likewise, transfers are often structured in a variety of ways as clubs process multi-million pound payments. This is why City currently owe just over £ 54million to other clubs, around half of which is owed in the current fiscal year.

Personnel costs – the majority of which are salaries – accounted for 116% of revenue in the successful 2020-21 season, which included promotion bonuses.

This is down from 162% in the 2018-19 promotional season, when City’s turnover was below £ 33.7million, as it was the first year without parachute payments after high-level relegation in 2016.

This time around, revenue was higher at £ 57.2million, so despite staff costs that were around £ 8million higher than in 2018-19, that percentage of revenue was business was lower.

The report also shows that claims from the government’s job retention program have risen from £ 1million to £ 741,000 in 2020-2021. These were intended for non-footballing staff on leave, such as chefs and ticket office staff, to protect jobs and avoid layoffs.

The Canaries ended the claims once the promotion was secured, in anticipation of the return of Premier League funds and the return of crowds to the stadiums.


Norwich City has released its financial report for fiscal year 2020-21, with Director Stephan Phillips, left, and CFO Anthony Richens leading a media presentation at Carrow Road
– Credit: Adam Harvey

The annual statement was presented to reporters at a briefing on Carrow Road earlier this week ahead of its publication Wednesday morning, with director Stephan Phillips and CFO Anthony Richens available to explain the various facts and figures.

The briefing had been scheduled ahead of Saturday’s 7-0 loss to Chelsea and its timing was unrelated to current struggles on the pitch, with shareholders due to receive their reports in the mail ahead of next month’s annual general meeting.

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