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Norwich City 'staring into financial abyss'

PUBLISHED: 08:33 07 January 2010 | UPDATED: 07:16 02 July 2010

Norwich City's debt have reached £23m

Norwich City's debt have reached £23m

Sarah Brealey

Fears were today expressed that Norwich City were "staring into the abyss" as the club prepared to reveal record debts of £23m this afternoon.

The staggering figure, which will be announced at a Carrow Road press conference, comes after the Canaries racked up a £5m loss in the 2008/9 relegation season - another unwanted record.

Fears were today expressed that Norwich City were “staring into the abyss” as the club prepared to reveal record debts of £23m this afternoon.

The staggering figure, which will be announced at a Carrow Road press conference, comes after the Canaries racked up a £5m loss in the 2008/9 relegation season - another unwanted record.

In just one season the overall debt has risen by 22pc, with losses almost doubling from the previous year's £2.77m. Turnover has slipped back £1m to £18m, leaving it lower than the debt level for the first time in many years.

Long-serving City fan Roy Blower warned that promotion from League One this season was “absolutely essential”.

“If we don't go up we are staring into the abyss. It is not surprising to hear these figures after paying off so many managers and players but it's a difficult pill for the fans to swallow.

“It's so sad that the wheels are nearly coming off at a time when we have a brilliant manager and the belief among the fans is at the highest level since Archie Macaulay turned the club around in 1957/8.”

One of the main reasons behind last season's heavy loss is understood to be the club's loan player policy, primarily adopted by former City boss Glenn Roeder.

The figures, which run from June 1, 2008 to May 31 last year, cover a torrid time in the Canaries' history, with its Championship campaign ending in relegation, while chief executive Neil Doncaster and chairman Roger Munby resigned before the summer.

Against that background, the club's debt has increased from the 2007/8 figure of £18.8m.

Full details are expected to be released by the club at a press conference scheduled for this afternoon with new chief executive and chairman, David McNally and Alan Bowkett respectively, set to reveal their plans to tackle the increased debt burden and prevent further losses in future.

The published accounts will hit shareholders' letterboxes from Saturday.

The Canaries loaned 16 players last season, with the club paying six-figure signing-on fees and wages without purchasing any players that the club could consider a saleable asset.

A season of struggles on the pitch - leading to relegation - also hit the club's balance sheet, including falls in ticket sales and lower demand for merchandise.

Last season's wage bill is believed to be similar to the £8.5m figure for 2007/8, while the cost of sacking manager Roeder and his first team coach, Paul Stephenson, at the start of the year also contributed to the Canaries' heavy loss - although the exact figure will not be revealed in the official accounts.

The club's board is believed to be keen to rectify the problem of turnover slipping below the debt figure.

But despite the club's latest financial hit, it is understood that those in Carrow Road's corridors of power are “more comfortable with things now than at the start of the season”.

Ian Fitch, partner at Norwich chartered accountants firm Larking Gowen, said: “On the numbers reported, the loss of around £5m has been financed by increasing debt and long term, like any business and a football club should be no different, this is not healthy.

“I am sure there are plans in place and steps have already been taken to improve matters, as you must remember these figures are a snap shot of the club at May 31, 2009. We are now in 2010 and the football club is in League One.”

The Canaries slipped into the third tier of English football for the first time in nearly 50 years after relegation in May under the Roeder's replacement Bryan Gunn, who was recruited alongside his assistant, Ian Butterworth, and first team coach Ian Crook at the start of 2009.

Norwich have been on the lookout for investment into the club in recent seasons, but have little to show from their search to help ease the debt burden.

t City supporters, have your say by emailing steve.downes@archant.co.uk and joining the debate on the Pink Un message boards at www.pinkun.com.

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