Norwich at a crossroads

After many years under the guidance of Delia Smith and Michael Wynn Jones, the Norwich City are increasingly influenced by Michael Attanasio, the owner of American baseball team Milwaukee Brewers.

He first purchased a minority stake from former director Michael Foulger last year, but the club has recently ratified the acquisition of many more shares, bringing his shareholding to the same 40% level as Smith and her husband.

However, it’s clear that the fans are very unhappy, as epitomised by a very blunt statement from the Canaries Trust.

“The completion of the legal process with Mark Attanasio seems to finally be approaching a conclusion, but, from an outside perspective there’s no overall sense of leadership, or direction, and supporters are desperate for some sense of a vision that we can all buy into and move forward together.

Norwich City’s pre-tax loss widened from £24m to £27m, as revenue dropped £58m (43%) from the club record £134m to £76m following relegation to the Championship. This was partly offset by profit from player sales increasing from zero to £4m.   Norwich City’s pre-tax loss widened from £24m to £27m, as revenue dropped £58m (43%) from the club record £134m to £76m following relegation to the Championship. This was partly offset by profit from player sales increasing from zero to £4m.

The main driver of Norwich’s £58m revenue decrease was broadcasting, which more than halved in the Championship, falling by £53m from £102m to £49m.

Norwich are the only Championship club that has to date published accounts for 2022/3, but their £27m pre-tax loss is clearly on the high side for the division, looking at other clubs’ results from the previous season.

Over the years, Norwich have looked to adopt a sustainable approach, making £31m profits in the decade up to 2021. However, there has been a fairly dramatic twist in their model in the last two years, when they lost £51m, more than wiping out those surpluses.

However, the Norwich business model is fairly dependent on player sales. They have made an impressive £163m profit in the last ten years, but their performance has not been consistent, as the majority of the gains came in only two seasons: £60m in 2020/21 and £48m in 2017/18.

Norwich’s revenue was boosted by a parachute payment, which was worth an estimated £44m last season. In total, they have received £186m such payments since 2015, having been relegated four times in that period.

Norwich attracted the third highest crowd in the Championship in 2022/23, only behind Sunderland 38,480 and Sheffield United 28,746. The club sold out its season tickets quota, showing “the incredible support of our fans”.

Norwich’s £17.0m commercial income is the highest in the Championship, ahead of Stoke City £16.6m, and Bristol City £15.8m (2021/22 figures), though they may be overtaken by Sunderland when they publish their 2022/23 accounts.

Norwich’s wage bill more than halved following relegation, falling £62m (52%) from the club record £118m to £56m. This was £11m lower than the last time they were in the Championship two years before, but that had been inflated by a promotion bonus. Player contracts include relegation clauses of up to 60%.

The board tried to buck the cycle of promotion followed by relegation by spending a lot more than it usually does in the last two years (and also not selling players to balance the books), but this bold plan did not work. In fact, it has only increased debt and interest payments.

As Stuart Webber said with some understatement, “The last two seasons have proven difficult, and our performances on the pitch haven’t been what we wanted.”

It’s too early to say whether the recent changes off the pitch will improve Norwich’s future prospects, but the present strife would not be what Attanasio signed up for when he invested in the club.

The Canaries’ challenge will be even harder if they do not secure promotion this season, as they would then have to compete without the advantage of parachute payments.