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Now this won't hurt a bit...

By Christine Foster :  03/04/2009 :  Comments (0) :
After watching the leaders of the western world attempting to bring some form of meaning to the banking chaos of the last 6 months, it became apparent that this is not going to be fixed in the next 12 months and its effect is likely to be ongoing for a few years yet. Looking at the forecasts for unemployment, for recession etc, it's pretty uninspiring. One has to ask how this is going to affect a number of things... football in general and Everton in particular. So will it be all doom and gloom or is there a silver lining in all of this?

Football in general will suffer from reduced revenue due to the stark fact that many will not be able to afford the cost of a game, the cost of a season ticket. This may have a knock-on effect to Sky too with people letting the pay-per-view lapse. Result? Less revenue in the game in general.

It makes sense then that less revenue means tighter budgets and the possibility of clubs going to the wall as credit gets harder to obtain and debt servicing becomes impossible on reduced revenues. The days of ridiculous transfer fees may also have been seen to have had their day as have high wages as clubs tighten their belts.

So is this a good thing or a bad thing for the EPL? I suspect even the Sky 4 will suffer like the rest of us as attendances drop, as income from Sky is cut, and as players sit out their contracts because frankly not many stars are going to move for a pay cut!! So, the net effect will likely be the abandonment of expansion plans, the tightening of belts and smaller squads.

Does all this mean the EPL is more likely to get closer to a leveller playing field? Possibly, but initially not until next season when it is more likely that the clubs with more youth coming through are likely to be financially much better off than those who will have to buy and sell to get out of the woods. I think we will see far fewer transfers in the coming years but more emphasis on lower (cheaper) players from lower ranks.

With interest rates so low, there will be a school of thought that money is cheap, so transfers are still likely to be high or expansion will be cheaper to finance but the problem is it may be cheaper but you can’t get the credit unless you don’t really need it and let's face it Premier League clubs are not the safest bets for any financial institution!

What does all this mean for Everton FC? Well in truth I doubt very much it will have much affect on the playing staff we currently have available except to say that we are likely to get less for any player we sell and conversely any new player is likely to cost us less if they decide to move in the first place.

Financially, the news that Southampton could be facing administration puts into perspective the very sharp realities of life for any new investment or expansion plan. Six months ago, BK could have probably sold his shares on the basis of the probability that Kirkby was a done deal and it was really a question of finding someone who would pay what he wanted. But 6 months is a long time in life. He has missed his opportunity to make his money and go, there is no one in the wings waiting for Kirkby to get the go ahead.

No more angels with pots of gold with BK's name on them. At this point in time, Neil Pearse may well be right, no one has the money anymore to invest the amounts required to appease BK and restore Everton to wealth. That’s the difference 6 months has made. The financial game has moved on and what was an opportunity and feasible then is no longer realistic or feasible now nor is it likely to be so in the foreseeable future.

The same must apply to any new stadium or significant investment in improvements to existing stadiums. If we are to be honest and realistic with ourselves then the argument against Kirkby and any new stadium is no longer about cost or location, it's now about how we can justify any move or investment when revenue is falling, credit is difficult, repayments even harder and an economic outlook for the next few years is pretty dire.

Given that it's likely to get worse before it gets better and that by some flash of inspiration the government grant DK the ok, financially we will be hamstrung in poor economic times with low gates and low income, high prices etc... Do I need to go on? So some may get employment for 6 months whilst it's built, but the likelihood of filling it is now beyond hope. By any measure, it no longer makes sense to move to ANY stadium with a huge investment tag at the present time. Believe me too, the stated £80m price tag will be far more difficult to service on lower gates because of bad economic times.

The recession therefore should spell the doom of DK. That is of course how any sensible perspective would see it. We don’t have a pot of gold to fund it, we would abandon our home to seek the deal of the century. It never was and never will be and has even less chance now.

I say 'should' spell the doom of DK, but I wish I could feel that it will. Given the appalling record of mismanagement of investment by the club, this is one mistake that surely cannot be made — surely not? Don’t bank on it. The recession is a wake-up call to the world that you can’t live beyond your means. Not any more. I only hope the board is listening and hears the wake-up call and doesn’t sleep through it because an error of judgement made now could be fatal to the club.

The risk is higher than it's ever been. The rewards are lower than they have ever been. Common sense is needed because the game has changed for all of us. It's time to walk away.

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