THE 2009/2010 SEASON - A NEW BOARD concluded

6. COLCHESTERGATE

Where to start? At the end. The outcome was a £200,000 fine (£125,000 of` it suspended for two years) for breaking Rule 20 (on tapping up) and compensation to Colchester for losing its coaching trio of £425,000.

There are three problems with understanding and explaining how we got there, once Norwich sacked Gunn and then decided on Paul Lambert as the replacement. Firstly, there was a PR battle between the clubs (culminating in Colchester chairman Robbie Cowling’s idiotic slurs) that obscured the real issues, with too much attention being paid to words rather than actions. Secondly, people involved in the affair would often refer to “Lambert” in terms of compensation and legalities without it being clear whether they meant  Lambert on his own or Culverhouse and Karsa as well. And the bare bones of the tribunal’s judgment don’t help there, either with that or with what precisely was the way in which we’d broken Rule 20. The other serious problem is that what went on in the private negotiations by way of offers and counter-offers has never been confirmed by both sides.

All we have is the version supplied by Robbie Cowling, the Colchester chairman, which is as follows:

"Colchester United's position is that we are satisfied with the compensation figure as we had originally asked for £400k to release Paul Lambert from his contract. Norwich were originally prepared to pay us £160k, which they subsequently reduced to £126k before increasing it to £180k and then £213k.”

Assuming those offer figures were for Lambert alone (and they might have been for all three) they are short of the tribunal award of £425,000. Granted that was for all three, but most of that is almost certain to have been for Lambert. Say, £325,000 for him and £50,000 each for the other two. That would make the initial £160,000 half what was awarded and our final, final, final offer still more than £100,000 short of what the tribunal thought was fair.

The Cowling figures came in an official statement on the Colchester website. I was later assured by Cowling that everything he had said on the subject, and specifically these figures, was “100 per cent accurate”. Most significantly, NCFC has not denied them or publicly questioned them, despite having since commented on the affair in general.

Now it has to be said clearly that even if those Cowling figures are not right Norwich plainly made at least one serious mistake, but if those figures are right, then once the initial approach had been made, it got a great deal wrong, not least by making offers that were insultingly low. Offers that no chairman would be likely to accept.

Most of the Norwich directors, when asked about the subject, on webchats and the like, would not comment apart from to say that the matter was in the hands of the lawyers. The obvious exception was Bowkett, at the annual general meeting of Norwich City plc in February. Now agms are mainly formal affairs, with the accounts being voted on, the re-election of directors and so on. They are also an opportunity for the directors to warn shareholders of any potential pitfalls, such as legal actions that might involve serious financial consequences. The implications of Colchestergate were an obvious issue about which shareholders would want to be informed, given the possibility of a fine or a points penalty that could threaten promotion, with all the adverse financial effects that would entail.

This is what the EDP’s David Cuffley reported Bowkett as saying:

“The compensation required by Robbie Cowling bordered on the ridiculous. This club is not a pushover and never will be while I am chairman. We have had meetings to try to negotiate, we have offered mediation and, to be perfectly blunt, I think the only way to solve this is a Football League tribunal. The Football League have never had a tribunal on this and has never ever deducted points. If they had to deduct points every time two clubs fell out, nobody would have any points. My personal view is that the majority of Colchester United's directors would like to settle, all our directors would like to settle but one individual needs to come to the table to negotiate, not to browbeat and be unpleasant."

That was followed some weeks later by the tribunal’s finding of guilt against Norwich for a breach of Rule 20. That in turn prompted the following official statement from the club:

“In respect of compensation payable to Colchester United, Norwich City always maintained they were happy to pay fair and reasonable compensation. That is only right. Throughout this dispute Norwich City made numerous offers of settlement to Colchester, but all offers were rejected. We felt that Colchester failed to engage in the process of negotiation and continually 'moved the goalposts' in terms of what they were seeking and why, and the decision of the FDC has reflected that. Norwich City were in a position where they were bidding against themselves, and for that reason it was regrettable that the level of compensation had to be set by the FDC. Norwich City did admit a breach of Regulation 20. Norwich City were therefore aware that a sanction would be imposed.”

A crass error of judgment. The sensible and classy thing would have been to take the punishment with dignity and move on. Instead the statement mirrored Bowkett’s reported remarks to the agm by suggesting we had bent over backwards to be reasonable and it was all Cowling’s fault. And it gave Cowling the opportunity to publish his figures for what we had offered.

To sum up, if former NCFC boards of directors in the past broke the tapping-up rule (and it’s possible they weren’t always squeaky clean) they either did it so cleverly they didn’t get found out, or they were smart (generous?) enough to make certain the injured club didn’t care. The new board got caught straight away. Now that very newness may have been a factor as far as Bowkett was concerned. As I have already said, he is a semi-executive chairman – way more hands on than Munby. Someone who made great play of how he (with David McNally) was now very much in charge. Yet his role in getting Lambert on board was made on the back of a mere six weeks in charge of a football club. Compare that to Cowling’s three years in charge at Colchester. But along with inexperience there is the factor of Bowkett’s avowedly more macho style, about which he positively boasted last October in answering the question “What difference do you think YOU [my emphasis] can make to our club?:

“I think we may have been viewed as a soft touch by other clubs and agents. While remaining fair and balanced we will be quite ruthless in our pursuit for success for Norwich. We have made and will continue to make the tough decisions that need to be made in the best interests of the football club.” And McNally was quoted as saying pretty much the same:

"We all promise while we are here...that we won't be soft. We will not be soft and there is a really important difference for me between being nice and being soft. We won't be pushovers, that's for sure."

Whether it was ruthlessness or not in this case, Bowkett certainly got Lambert in quickly. In isolation A GOOD THING. The alternative was not, of course, NOT getting Lambert at all. The alternative was getting him, but possibly a bit more slowly. That he would join us was a certainty once he decided he wanted to. And if we had made Cowling a sensible offer straight away the move might have happened just as swiftly.

But there was a twofold cost. Firstly, to our bank balance. How much is unknowable. We were always going to have a pay some compensation, but it is impossible to be sure what Cowling might have accepted. However it is simply not credible that such an acceptable figure would have been as much as £425,000 plus £75,000 (plus the threat of another £125,000) plus the considerable legal fees. This cost us.

Secondly, to our future actions. We now have to be extremely circumspect. If we break the rule again we will be tried as repeat offenders. The punishment is bound to be more severe, so either more than £200,000 or a points penalty (it’s going to happen one day) or a fine and a points penalty. And if we offend within two years we’ll get hit with the suspended £125,000 fine as well.

In short, this was not well handled. Not just my judgment. After the immediate post-tribunal decision whinge someone at the club had belated second thoughts, and McNally tried to draw a line under the affair by saying what should have been said in the first place:

"Maybe some lessons have been learned and we will attempt to ensure that they are noted for the future.”

Managementspeak for “We screwed up.”

 

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Moving on to strategic decisions, where formal boardroom votes come more into play, and although it is one person one vote there is the background factor of a 61.2 per cent majority holding as a potential influence. Now the Smith/Jones/Munby/Doncaster era was characterised by the following:

1. A move away from the short-term debt of the Chase era to long-term debt (plus contributions from directors).

2. A switch to an affordable, family-friendly ticketing policy to increase attendances and so income.

3. A gradual increase in the capacity of Carrow Road to cope with the resultant bigger crowds. So an 8,000-seat Jarrold Stand rather than the other mooted options of staying at 4,000 or going to 12,000.

4. No significant increase beyond the current 26,000 until Premier League status was cemented.

5. A willingness to sell the club, but only to a potential buyer with a soundly-based long-term business plan.

It is early days (only a year on) and we wait for the financial review, but so far:


1. Ticketing prices for the 2010/11 season may have changed but not the general policy. However in a recent webchat Bowkett touched on that question, musing about cutting back on concessions. Now IF that ever turned into action then that might be a serious policy change, but we are nowhere near that yet. But there are now signs of a slightly more aggressive policy on particular prices, with the odd rumbling from fans (as mentioned in SCGGATE above) about the cost of the home pre-season matches, and about the increase from £20 to £50 for reprinting lost season tickets. Something to keep an eye on.

2. As to the stadium, recent comments by Bowkett and McNally about the need for Premiership stability before any major capacity increase are almost word for word what the old board was saying. However McNally did raise the possibility of a 35,000 to 40,000-seat stadium, as opposed to the figure of between 30,000 and 35,000 that has generally been regarded as appropriate. McNally may have been indulging in a bit of hyperbole. Indeed, since then, Bowkett again used the figure of 35,000 as the high point rather than McNally's 40,000, so the idea that McNally had been indulging in a bit of wishful thinking looks correct.

3. As far as ownership is concerned it is hard to find a cigarette paper’s width of difference (apart from a  downer on dubious impresarios) between what the old board was saying:

“The directors would be delighted to talk to anyone who is prepared to commit to making a substantial investment into the football budget on an on-going basis.”

...and the new, from Bowkett:

“I am willing to take phone calls from any bona-fide new investor or potential new owner, and, apart from excluding the innumerable lap-dancing club owners that would like to own a bauble of a football club this week, I am willing to arrange meetings as well.”

In summary, there have yet to be any obvious changes of policy from the new board.

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A YEAR ON - THE NEW BOARD

It is now just over a year since The Great Boardroom Change. One that needed to be made. Not, funnily enough, because the old guard, which had grown tired in the job, had made mistakes. All boards do that. But it had made bad decisions for bad reasons. More strictly, one bad reason – an excess of sentimentality

So Worthington was kept on into the 2006/2007 season when it was plain he had shot his bolt as a Norwich City manager. Creating, with his sacking that October, the vicious circle of short-termism from which we are only now – apparently – emerging. Gunn was appointed despite (and this is not hindsight) having no serious credentials for the job, or any management job in football, come to that. And was kept on after he’d amply demonstrated that. All decisions shot through with sentimentality.

Enter Bowkett and McNally. And Phillips.

And Bowkett, in particular, makes it very plain that he has identified sentimentality as something to eradicate. I make no apologies for repeating this quote:

“I think we may have been viewed as a soft touch by other clubs and agents. While remaining fair and balanced we will be quite ruthless in our pursuit for success for Norwich. We have made and will continue to make the tough decisions that need to be made in the best interests of the football club.”

Ruthlessness is pretty much the polar opposite of sentimentality. As Gunn found out in very short order. And the choice of a replacement was equally prompt and praiseworthy. Lambert might not have been a success (these things are NOT a science) but if it had all gone pear-shaped it would at least have been a bad decision based on good reasons. Equally, going for the News of the World’s jugular was enjoyably ruthless.

There is a “but” coming. Not everything (see above) has been well-handled. The Tom Jones concert. A triviality, but it still cost money. And Colchestergate. A very long way from a triviality, and it cost more than just money. There has also been a more aggressive PR stance, as if we have been trying to show just how damned hard we now are. Which might be fine if everything was being well-handled. But when not it looks plain embarrassing. There is much to be said at all times for Teddy Roosevelt’s policy of “Speak softly and carry a big stick”.

But all these issues pale in comparison to the paramount question that confronts Norwich, as it confronts virtually every club in England. As indicated earlier, the old board, although guilty of some dire footballing decisions, got the big picture stuff generally right, in terms of stabilising the club in the post-Chase era and coping with an economic climate that made it increasingly difficult for medium-sized clubs with not very rich owners. £23m debt? Yes. But still standing. A bit wobbly. But still standing. Not to be sniffed at.

In terms of financial expertise and City of London contacts the new board looks significantly more high-powered than its predecessor, but my list of clubs still on the market for as long or longer than NCFC demonstrates how difficult it is to attract the right sort of investment. Football finance used to be simple, and familiar territory. The economics of the corner shop writ large. Now directors are faced with the equivalent of one of those fanciful medieval mariners’ maps of the supposed sea route to some imagined new world of fabulous wealth. With a few bits close to home reasonably accurately charted but with the rest of the cartography either dangerous guesswork or just plain wrong or left blank, with legends such as “Here be monsters”. And with an edge off which to fall.

The real test for Bowkett and the rest is to be expert navigators.