Norwich smash bond target a day before launch
Written by Simon Austin — March 27, 2018
NORWICH CITY have smashed the £3.5 million target for their Canaries Bond - a day before it was even due to go on public sale.
The £5m maximum threshold for the bond - which has been launched to enable Norwich to build a permanent base for their Academy at Colney - has been reached after 735 investors signed up for the scheme.
Chief executive Steve Stone said: “When we were initially looking at the concept of a Canaries Bond I was confident we would achieve our target of £3.5m, but I did not anticipate the level of demand we have experienced to reach our maximum investment.
“This fantastic level of additional support will allow us to further enhance the fitness, educational and analytical facilities in the Academy itself, as well as significantly improving facilities for visitors to Colney, whether that be Academy players’ families or spectators watching matches.
“This is a vital part of our wider strategy for the club in the seasons ahead. We’ve capped the bond at £5m in order to sensibly manage our repayment commitments to investors.”
The five-year bond will pay 5% gross annually, with an additional 3% gross in ‘club credit’, which can be spent on things such as Norwich match tickets, food and merchandise. A one-off bonus of 25% will be accrued if the club reach the promised land of the Premier League within the term of the bond.
The bond is being issued by Tifosy, an “equity crowd-funding platform” co-founded by former Chelsea star Gianluca Vialli and his investment banker friend Fausto Zanetton. Tifosy has already helped Portsmouth raise £270k to give its Academy a permanent base and £600k for Stevenage to build a new North Stand.
Vialli has previously said: “It is about helping football clubs raise money to become a bit more sustainable and financially sound.”
The money will be spent on building a permanent base for the Academy at Colney (the current one is only temporary), as well as a new gym and pitch and dressing room improvements (which are already underway). After hitting £5m, the club has also suggested it could install floodlights and a stand on the main Academy training pitch.
However, the bond is not covered by the Financial Services Compensation Scheme, meaning investors could potentially lose their money.
Sporting Director Stuart Webber said the bond was the only way in which the club could ringfence funds for a new Academy following the end of parachute payments from the Premier League.
Webber said the bond was preferable to “begging for money or just sitting here waiting and saying ‘if we get to the Premier League we’ll do it,'" or, if they did reach the top flight, "spending money on a striker, getting relegated and saying, ‘oh, next time’ and then 10 years down the line Colney is still no better.”
He added: “What it will ultimately deliver is a unique environment for our players. The knock-on effect it will have is it makes more [facilities] available for the first-team players because less of the academy players will use the facilities and pitches and things like that.
“It means we can play Under-23 games on the pitch at Colney more than we do now, to save the pitch at Carrow Road. And it creates a proper elite working environment. For a player or staff member that has to drive in and work in a temporary building or use a gym in a conservatory, that’s not professional, that’s not elite.
"You can talk about elite environments, but a gym which is a fifth of the size it needs to be in a conservatory with a mucky roof sort of contradicts that.
“The one thing we have got within our academy, certainly in our 14s, 15s, 16s, 18s players, is some really talented players. This is making sure we keep them because they believe in what we’re doing.”
Webber revealed that director Tom Smith, the nephew of owners Delia Smith and husband Michael Wynn Jones, had come up with the idea for the bond.
“It was actually Tom Smith who had the idea of Tifosy as he’d seen that in action with the Stevenage stand project. Then it really built as a group and grew really quickly.
“We appreciate we haven’t got the money from the Premier League any more but we want to get away from that excuse. Let’s try and do something rather than sitting around moaning.”
GIVING YOUTH A CHANCE
Webber said Norwich would not have embarked on the project were it not for the fact that their head coach, Daniel Farke, is willing to give youth a chance.
“Daniel is a key component to this and when we sat down to talk about ideas for asking for this money, we knew we could have a high level of confidence because the guy at the top also believes in it and will back it,” Webber said.
“If there’s a young player who’s good enough, he’ll play him. Because, if not, we may as well not have the facilities.”
A Norwich Academy player has featured in their first team for 95 games in a row.