The cost of relegation from the Premier League is emphasised by the financial results for Norwich to 30th June which show a £25m reduction in income from £100.6m to £75.9m, largely because of the loss of broadcasting revenues which fell by £18.6m. Ticket sales were down from £11.5m to £9.2m. Parachute payments were also reduced.
'The reality is that the financial gap between the Premier League and Championship has widened,' said chairman Ed Balls. 'The accounts show how hard it is to be relegated. Even though we tried to have a plan to ensure player wages came down too it wasn’t enough to fill the gap.'
However, losses were relatively modest at £2.7m, although they compare with a profit of £9.4m in the previous year. The club is also relatively free of external debt at £1.8m in the form of a bank working capital facility. Wages were reduced by prudent clauses in player contracts. The total bill was down from £62m to £55m. Even so it is the second largest wage bill in Championship history (after QPR).
The financial position was worsened by severance payouts totalling more than £4m, split between outgoing chief executive Jez Moxey, former manager Alex Neil, and some of his coaching staff.
Dealings in the transfer market have reaped some benefit, with a £2.1m profit from player trading, compared to an £11m loss the previous year. Player purchases totalled £27.6m and players sold brought in £29.7m.
In light of the tighter financial situation at the club, long-mooted expansion hopes for Carrow Road have been put on hold, as has work at the training ground.
The plan is to secure a return to the Premier League, but not at any cost. Asked what the plan would be if the club fails to achieve promotion to the Premier League this season, managing director Steve Stone said: 'The Plan B is creating a succession plan for players brought in from the academy to look at the squad for the next three years and to look at who can replace players to achieve getting to the Premier League in the intervening transfer window.'
'The academy really has to work in the long term bringing players through under our existing funding model. I would expect staff costs to come down next year, primarily due to redundancies.'
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