COVID-19 update from Executive Committee
The club’s Executive Committee of Stuart Webber (Sporting Director), Zoe Ward (Business & Project Director) and Ben Kensell (Chief Operating Officer) recently spoke to the media about some of the issues and challenges facing the club throughout the current COVID-19 pandemic.
Q: How is the club working and budgeting for worst case scenarios at this stage, in terms of a financial impact?
BK: Ultimately, that’s what we have to do as a self-financed club. It's our duty as an Executive Committee to paint the worst picture to our board to ensure that we're covering different variables that are still up in the air.
It breaks down into two areas - the club-controlled income that we'd lose as a result of playing behind closed doors, and then you've got the very variable nature of what's happening with broadcasters. We can take a best guess at the broadcast piece, which is what we've done, but the club-controlled element we have a good idea on. We’re looking at approximately £1.5million per match cost. Rolled into those costs would be season ticket, membership and corporate hospitality rebates for those fans who have bought them and have the right to come to the ground.
With everything considered and the unknown of the potential broadcast rebate, it could cost us anywhere between £18m and £35m. Is it worst case scenario? Actually, it's probably quite realistic, but obviously we'll do everything we can to mitigate that and get it as low as possible, but the broadcast is the piece that no club knows at the moment until we're told more via the relevant governing bodies.
Q: Is there a chance that the club might now have to look at player sales? How profound an impact could this have on the way you wanted to operate?
SW: First of all, we had no plans to sell anyone this summer anyway. We built the model as soon as we got promoted to be in a really good place and no longer be reliant in the short-term on player sales. Hence, we're not sat here now having to panic with anything. We can take more time and find out exactly what the repercussions are going to be before taking action.
Of course, we're realistic. The bigger the losses are, we've got to find ways of mitigating them. Whether anyone likes it or not, one way to achieve that could be through player sales, however, we also have to have our eye on the market this summer. Fortunately, we're not in a position with a gun to our head of having to sell players on the cheap to survive. We have to maintain the value in the playing squad because it's taken a long time to build that up.
Q: The issue of furloughing has been talked about quite a lot, but, generally speaking, for Norwich as a club it's a different case, right?
ZW: We've only furloughed members of staff who literally cannot work at this moment in time, so at least 50 percent of the workforce are still working in lots of different areas across the club. We've taken this decision to protect staff, not only now, but in the future. What we wouldn't want is have a situation where we don't furlough now and we don't know where this will go or what the impacts will be and then, say in six to twelve months’ time, we're having to make some really difficult calls in terms of staffing.
SW: We won't change just to be seen as changing for a little public perception. We stick to our beliefs and believe we've done it for the right reasons for our business. That's what people forget - it's a business.
No-one will criticise Mercedes for doing it, but people do with a football club because they've got players and staff earning lots of money. Lots of businesses have lots of staff earning lots of money, who aren't getting anywhere near the public attention that football clubs are getting.
Q: Are wage deferrals for players still being spoken about?
SW: They've never been discussed. We’ve taken a different approach and have been in constant dialogue with our players, led by Grant Hanley as club captain and Timm Klose, who's our PFA rep. We've been in constant dialogue with senior players, their agents and the PFA, and our staff. We had a meeting this week and presented the potential impact.
What we believe as an Executive Committee and the board above us during this period is it's about education. It's not just about sitting opposite someone behind a camera and backing people into corners. It's about building trust, being completely transparent and honest. Everyone treats each other like adults.
We've done that with our players so they're fully aware of the economic impact that this may cause. It's very difficult at this point to say 'we are definitely going to lose X which means we need to reclaim Y'. Until that time comes and we get more clarity, we won't be talking to any of our players or staff about deferrals. However, once the picture becomes clear there is going to be an amount of money which we've lost, and of course we're going to have to talk to players and staff about what we can collectively do to try to fix this.
The players and staff have been a credit to the club. The COVID-19 Community Project fund was an immediate reaction of seeing people on our own doorsteps struggling. The players came together with the figure of £200k and there has been some amazing work done out in our community through our staff volunteer programme.
Q: As for contracts, what kind of a position are we in as a club? Will we have any issues with players and which clubs they are playing for during a potential period after June 30th?
SW: Again, it’s a very difficult situation. Say the Bundesliga is ahead of us and finishes by June 30th, Hertha Berlin may turn around and request their player, Ondrej Duda, goes back. They have a different coach there and may want to protect their player ahead of the 2020-21 season.
It’s a really difficult situation to which there is no real answer. People and clubs will ultimately be looking after their own interests. We signed a player in Danel Sinani, who would have joined us on July 1st. Can he now join us on that date? Or will he have to play the remainder of the season out with his current club? There are a lot of tough calls to make, but we’re ultimately waiting on some further guidance.
Q: Surely there are some difficult discussion to be made when it comes to returning to training and matches? Surely the health aspect for the players can’t be forgotten when we’re talking about how we can start playing again?
SW: Of course, and in some of the early discussions that have been happening that has been one of the main talking points. No player or staff member should be asked to return until the environment in which they’re being asked to work in is safe. There are bigger issues than the financial challenges that we’re currently faced with. People’s lives are at risk here and we can’t ignore that issue. It has to be safe and the players have to feel comfortable with what they’re being asked to do.
Q: Is it particularly frustrating given the current situation, that other clubs can be bailed out given their financial positions?
SW: No, not at all. We haven’t given thought to how any others are working through this period. We need to protect the wider game of football and our club and community. It’s about making sure we come out of the other end of this period with a healthy club. That’s what’s most important for us right now. If certain clubs use other methods to get through this period, then so be it. But at the moment we’re only concerned about what is best for Norwich City.
BK: We’re also really proud of our model and the way we go about things here at the football club. We can also only control certain things throughout this period. Ultimately, there are certain things that are outside of our control - be that a potential broadcast rebate, whether we’re going to play games again, how long the situation will last. Those topics, that are still a bit of a unknown, are ones that we’re going to have to work around as and when decisions are made. As a club, we've managed what we can control in a positive and constructive way.