EDITOR'S VIEWPOINT

24th Richest Club

By Michael Kenrick : 10/04/2009 :

Comments (9) :

So what do you make of this latest valuation exercise by Forbes? Everton slip to 24th after holding steady at 21st ? down from those heady days when Keith Wyness could crow that Everton were in the Top Twenty, thanks to his diligent policies of outsourcing and liquifying assets.

Forbes have similar tables going back over the last five years, and I guess they reflect what we already know about the difficulty EFC has in holding its own with the current financial business model that has been in place through most of the Kenwright era. Does our recent slide down the table reflect the fact that there are no more assets left to liquify?

On the one hand, it is really quite remarkable that the club is where it is given the lack of heavy-duty investment, and so we must give credit to the Board for holding the ship steady-ish amidst the hurly-burly of life near the top. It reflects too the incredible value of the Finch Farm investment and the talent production line that is the Everton Academy.

People bemoan lack of investment by the Board of Directors but the reality is that securing an ever-increasing line of debt is what it has all been about. But you have to wonder: is this model sustainable as we go forward? What of the credit crunch, the recession, and the presumably inevitable impact on revenues and any further increases in the line of credit?

One thing I perhaps have neglected is the dramatic fall in the value of the pound against the dollar over the last year... although this should affect all (English) clubs the same, I assume. Still that should not have affected the increase in debt, from 30% to 49% in just one year. Which makes all those calculations about selling AJ and McFadden to buy the Big Fella somewhat moot ? where the hell has all that extra money gone?

Reader Comments

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Chris Jones
1 Posted 10/04/2009 at 17:43:47

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Debt precentage is worrying but only Tottenham and Villa have lower levels. It seems the higher up the league you are the bigger the percentage of debt.

Arsenal?s are in negative equity according to these figures! United, Chelsea and RS are all up to their necks in it.

Did the arabs bail out City without adding debt?

Gareth Humphreys
2 Posted 10/04/2009 at 19:14:41

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Let's be honest, the title is somewhat misleading. Manchester United are at the top despite them being £650m in debt. The richest club in the world are Man City and everyone knows it.

Dave Wilson
3 Posted 10/04/2009 at 19:19:51

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Sorry, finances have never been my strong point, but am I reading this correctly? Are Bayern Munich, Werder Bremen, Stuttgart and Hamburg really free of debt? If so, what are the Germans doing differently?

Will Leaf
4 Posted 10/04/2009 at 19:27:58

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Dave, the Germans have a much more rational wage structure. 2006-07 saw Budesliga teams with 45% of turnover going to wages; Premier League teams average 63%. This contributed to the Bundesliga showing an operating profit of £210M that season ? twice that of their Premier League cousins.

Here?s the article; it also goes into other topics like TV revenues and the issue of terraces.

http://www.telegraph.co.uk/sport/football/leagues/premierleague/3473712/Five-things-the-English-Premier-League-can-learn-from-the-German-Bundesliga-Football.html

Dave Wilson
5 Posted 10/04/2009 at 20:18:28

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Thanks Will

Interesting stuff, you led me to several other links and I came to the conclusion that we?re watching football in the wrong country. But its slightly off Michael's topic so I?ll leave it there...

Dick Fearon
6 Posted 11/04/2009 at 00:52:20

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On a personal level I would dearly love to be the worlds 24th richest man. What am I saying!?! The two millionth and 24th richest man would be nice too.

Richard Dodd
7 Posted 11/04/2009 at 09:18:00

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Where has all the money gone, you ask. Straight into the players? and manager?s pockets is the simple answer! But if it hadn?t done so, there is no way we could be stable in the top six of the Prem. BB deserves nothing but praise for what he has achieved whilst our Chairman. Long may he continue.

David Alexander
8 Posted 11/04/2009 at 18:16:53

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I?ve done back of a fag packet calculation looking at the exchange rate changes over a year and while, they do go in favour of the European clubs, that's only lifted Bremen, Stuttgart and Marseilles above us.

As to where the money goes ? Felli?s Barber....

Martin Hughes
9 Posted 13/04/2009 at 11:41:56

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I am not at all surprised that Everton are slipping down the ranks. On a recent trip to Liverpool I visited both the Everton and Liverpool megastores; I?m afraid Tom to say this but LFC?s are totally switched on, the shop is open and vibrant... when going to the Blues shop, well, it was quite embarrassing to be a Blue.

As we all know, clubs are looking for new revenues and income streams... EFC have got a long way to go ? would this be the arguing point for Kirkby? Will the income streams increase, along with costs? Would EFC be in the same boat?

It?s a shame but EFC deserves bigger and better. For fuck's sake, cant the board just sort it out?

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