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£70M in the piggy bank

By Charlie Martin :  08/06/2010 :  Comments (27) :
If the quality of our playing staff reverses this summer, and we lose Arteta or Pienaar over contract issues, then surely Mr Kenwright will have to answer some big questions?

Firstly, the excellent commercial dealings of the Premier League has meant we’ve received a nice amount of income this season.. this estimates what we have earned:

  • £800,000 a place merit pay — having finished 8th means Everton receive: £10.4M
  • Minimum pay from equal share for participation in league £14.6M
  • TV appearance payments: minimum £5M
  • £1.2M average home gate receipts, with 19 matches that’s £22.8M
  • £5M per season from sponsorship, merchandise revenue and digital activities
  • European ventures and pre-season match fees £2M
  • £10.1M from overseas television rights
So adding that lot up, 10.4 + 14.6 + 5 + 22.8 + 5 + 2 + 10.1 = £69.9M, that’s a whopping £70M income, more than we’ve become used to, thanks mainly to our share of solid % increases in the Premier League’s central deals, and the respectable league position gained from an incredible run of form in the second half of the season.

I haven’t included receipts from shares of away games and player transfers. But let’s be kind to the Board and assume we are only up another £5M in that regard over the last couple of seasons. So shall we say £75M?

Now if we cannot bracket our two best players into unique contract deals, if not by breaking the wage structure – and I’m glad we have some sort of sanity there – then by being a bit creative with the odd million here or there, maybe as a bonus on signing, we are surely making life difficult for ourselves.

The heights and the stupidity of player values (caused only by the spending power of three or four clubs in Europe – City, Barca, Real and perhaps Inter – but which incredibly affects all European player values) has meant that the price of getting readymade replacements for Arteta and Pienaar is a good £40M, and they’re not an easy sort to find!

So let’s dig deep, be creative and offer them very lucrative personal deals because they want to stay... if we don’t, in a short career, who would blame them if they find the right deal elsewhere, if Bill doesn’t find them and their agents a few million as a signing bonus today?

I don’t know the facts but imagine if we lose them because we are squabbling over an extra £5 grand a week! Yes that sounds an irresponsible throwaway comment but when you earn £800,000 for each place you climb in the table, and we’re talking about the players that we know win you the games, it’s an absolute no-brainer – you find the money.

Rodwell will be a cracking player one day and I’m glad we’ve kept him, but surely now is the time for this Everton team. In the second half of the season, we were the form team in the whole league, so this is potentially a team capable of honours and the players who are at their peak now should be harnessed to the club come what may. (Believe me, the year that Rodwell hits his peak will be the year we see him leave, sods law as Evertonians, I’m afraid). Rodwell therefore, of the three, was the luxury signing, the necessity signings are the two we are yet to pin down.

It’s worth mentioning I’m not the agent of either player, just a fan who doesn’t want to see the Big Opportunity that is Next Season, thrown into oblivion.

This is a once-in-a-generation team... don’t break it up Mr Kenwright!

Reader Comments

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Ciarán McGlone
1   Posted 08/06/2010 at 14:19:18

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I think you're a short on domestic TV income as well... Last time I checked it was around the £30mill mark.

To be honest, we are in a financial noose... Every single penny of that money will likely go into financing the existing debt and paying players... I'd be surprised if there was anything left over to finance any new players.

We are robbing Peter to pay Paul. Unfortunately, selling a player or two would appear to be the financially progressive option... I just hope it isn't Mikel.
Kevin Gillen
2   Posted 08/06/2010 at 14:18:06

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Excellent piece, Charlie Martin. I for one do not want to see another season of 'Development' under Moyes... this year should be about 'Delivery'!!! We demonstrated in the latter half of last season and in big crucial games against United, Chelsea and Man City that we have more than enough to challenge for honours next season. Without the distraction of Europe we must surely have a go at the title good and proper.

Getiing Pienaar and Arteta to sign would be a massive boost to the fans so let's get the deals done! We've already got a more suitable second keeper and a new hungry striker who I'm sure will get goals so come on Blue Bill and Elstone — let's not have another Lescott saga to undermine our start.

Mick MacManus
3   Posted 08/06/2010 at 14:45:38

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I'm by no means an accountant, but when these figures are estimated by fans every so often, the tax to be paid on the income usually gets forgotten. This presumably can take a huge chunk out of the overall revenue i.e. the the £70 - 75 millions as you estimate. Same is true when players are sold. If one of our players is sold for £10 million, I presume there is tax is to be paid on that, leaving us with significantly less than it initially appears to reinvest in the squad.
Roberto Birquet
4   Posted 08/06/2010 at 14:55:09

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I totally disagree.

As for: adding that lot up, 10.4 + 14.6 + 5 + 22.8 + 5 + 2 + 10.1 = £69.9M, that’s a whopping £70M income, more than we’ve become used to, thanks mainly to our share of solid % increases in the Premier League’s central deals, and the respectable league position gained from an incredible run of form in the second half of the season."

Actually, we grossed over £80 million last year; the club post their results. You need only look at that.

We have been upping our wage bill, which already exceeds 60% of revenues. That is enough. Until we make more money whether through a better ground or whatever else, we should not live beyond our means.

If Pienaar wants off, let him go. We must then trust in Moyes to get a replacement with the money. Replacing Pienaar or Arteta (combined transfer of £4.5 million) would not cost £40 m. I realise it is highly unlikely we'd get as good for £4-5 million, but we should not panic either.

Only players that City, Madrid et al want would command such a fee, and wages of up to £100k a week. We can't compete with that — end of! We go for players that terams below those freaks go for; and that is how it should be.
Kevin Tully
5   Posted 08/06/2010 at 15:10:25

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@ Mick. (3)

The club won't pay any tax as they show a loss on their accounts.
Alasdair Mackay
6   Posted 08/06/2010 at 15:43:15

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This is just an estimate of our income?

What about our outgoings?

Our wage bill is probably over £45m including back room staff. Then there is tax, interest on loan repayments and upkeep of stadium and training facilities (including the annual lease on Finch Farm).

I would imagine that the club is being run pretty close to the wire and the difference between finishing 8th and 5th will make a difference in terms of what we can afford to pay in total wage bills. We have just offered big pay rises to Arteta, Cahill, Rodwell and Pienaar.

Pienaar is asking for £60k a week or more, which will probably trigger clauses in Cahill's, Arteta's and maybe Heitinga's contracts giving them parity with the top earners at the club. He is asking for £40k more a week (as opposed to £25k more a week). He should accept that we are not going to up our offer and either sign or fuck off.
Alasdair Mackay
7   Posted 08/06/2010 at 15:53:24

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Sorry Kevin - just seen your post.

The club will still have to pay some tax!? Employer's tax? Council tax? They may not have to pay tax on any profits, because they have none, but there is still tax to pay!??

I could be wrong. It has been known before!
Kevin Tully
8   Posted 08/06/2010 at 16:05:12

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Yes Alasdair,

They will pay employers NI and local taxes, but no Corporation Tax on company profits.
Terence Meehan
9   Posted 08/06/2010 at 14:45:11

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I completely agree with previous comment. We need to hit the ground running with fully signed up & fit squad for a change. Forget Top4 the League is possible with this squad. It must be frustrating for Moyesy having to deal with the likes of Peanuts agent but I`d have no qualms about giving him the same as Mikel.
Peanuts partnership with Baines is outstanding but if his demands are exhorbitant let him go but it looks like another saga similar to Lescott is brewing.
Richard Parker
10   Posted 08/06/2010 at 16:23:26

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I think you just need to have a look around to see that clubs bring in a fair bit of cash, but there's rarely a great deal left when everyone has had their share.

Mainly the 'everyone' is the players (average Prem wage to turnover is just short of the 70% mark), the banks (not sure how much, but interest on 40 or 50M soon adds up) and that leaves just about enough to run the infrastructure of the club, so we make a slight loss.

The only revenue stream that we can instantly ramp up, is that of players sold. Hence, the sell-to-buy situation we find ourselves in.
Matthew Mackey
11   Posted 08/06/2010 at 16:38:49

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Very good piece and very interesting to see just how much money flows thro the club on an annual basis.

I'm sure i'm not in the minority of Evertonians when I say that I would prefer to keep the services of both Pienaar and Mikel for next season rather than lose them and get new faces in. A case of "better the devil you know than the devil you don't" Both these guys, when firing on all four, make Everton a very respectable team.

So starting next season with the same squad, all contractually tied down nicely, and with no new faces would not be such a bad thing IMO.

Mind you, if Moyes added just one signing to the squad, Ohuna from Man City, then I think we could do some serious damage next season. I think he's a very good player.
Eric Myles
12   Posted 08/06/2010 at 16:50:16

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You'd never make it as an accountant or cost engineer. Where's your expenses column? Or do all those stewards and staff and police at the matches turn up for free? Not to mention the players.
Brendan O'Doherty
13   Posted 08/06/2010 at 18:59:01

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'£70m in the piggy bank' makes it sound like money saved up for a rainy day, when in fact it's money already spent.
Phil Martin
14   Posted 08/06/2010 at 20:45:38

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The club is asset-less and penniless. We are treading water, only the legs are beginning to tire now. There's only so long for you to keep going without some form of investment. Kenwright has failed to deliver this. He has failed to address our stadium situation.

If Pienaar goes this summer, who will it be next year? Let's not pretend Moyes will be able to uncover bargain basement diamonds every year.

Thanks for nothing Bill (and messers Green and Earl).

Chris Butler
15   Posted 08/06/2010 at 22:05:59

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Load of rubbish; it will all go on wages, meaning no profits.
James McGrady
16   Posted 08/06/2010 at 22:52:58

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We will also receive income for players at the World Cup. Something to do with an injury to a player on international duty that was negotiated.
James Stewart
17   Posted 09/06/2010 at 00:35:55

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Not much more to add really. Ciaran rightly pointed out the noose of debt and interest that will swallow most of it up. Then there are wages.... Ours being fairly low for a top 10 side but still will total most of that. Then there is the nitty gritty like police stewards staff facilities etc.

Basically, we have £0 transfer funds without taking on more loans. But c'mon — we all knew that already!

Andy Crooks
18   Posted 09/06/2010 at 00:43:15

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Charlie, I've often thought along the same lines as you but watching Panorama tonight was very illuminating. Apparently the Premier League have more debt than the rest of Europe put together.

Something is about to go very badly wrong. What is Everton's debt and how much is spent servicing it? If Fulham's debt is, as was alleged, £200 million, then where do we stand?

Charlie Percival
19   Posted 09/06/2010 at 08:40:26

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Andy (18), I think we're actually near Champions in terms of debt. I think we are one of the lowest debts in the prem. I assume about £50 million.

Watch Kenwright be knighted by Everton fans when these other clubs go down and Everton are standing strong because he sensed this would happen to football....

Just a thought!
Mark Stone
20   Posted 09/06/2010 at 09:20:06

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£75m is fuck all. Man Utd double that in the season's prawn sandwhich sales.
Richard Dodd
21   Posted 09/06/2010 at 09:51:10

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A very typical supporters' "Spend, spend, spend" philosophy! So many think that managing the affairs of a football club is about blowing every penny on transfer fees — how many ever mention wages, agents fees, VAT etc — or the necessary running down of debt?

I have no doubt that a portion of this `windfall` will go into the market but word is that ALL players are looking for fat increases to reflect it! One thing is for certain, it wont end up in Blue Bill`s pocket — so don`t start on the "Where's it all gone?" mantra, will you?

Matthew Lovekin
22   Posted 09/06/2010 at 11:59:41

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The yearly income may be £70-£80m, but the yearly expenses are £70-£80m. Wasn't it just the last published accounts that state our yearly net total was £26k? In other words, we are basically breaking even, there is nothing in the piggy bank, nothing for transfer fees.

I agree with getting our best players onto improved contracts, but we can't even afford that. If our total income minus expenditure is only £26k per year, we can only afford to give one player a £500 per week pay increase! I think Stevie P wants a bit more than that.
Jay Harris
23   Posted 09/06/2010 at 13:17:40

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Just a couple of points.

1. DK cost about £5 million in "experts" fees etc.

2. Robert Elstone commented over 12 months ago that the debt was over £75 million.

Having said that, players values are not counted as assets, so the only relevance of that amount of debt is if your players are worthless and the amount of interest you are paying on it.

Even though I would love to keep Peanuts, I think it's about time all players got more sensible about wage demands — or do they just want to become rich benchwarmers at the "crazy" clubs?

James Flynn
24   Posted 10/06/2010 at 02:51:12

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All well and good, this discussion. As long as we always keep in mind, winning is what generates interest and income. I still think DM is keeping everyone for the big push next season. And ownership is accepting of that.

Got to spend it to make it. And EFC has the group worth spending it on. Regarding all the rumors about our guys leaving? When they're gone, I'll believe it. Not a second before.
Roberto Birquet
25   Posted 10/06/2010 at 13:42:41

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Jay Harris:
"Robert Elstone commented over 12 months ago that the debt was over £75 million."
---------
What's your source? My understanding is that we have £40 million approx of debt.
Jay Harris
26   Posted 10/06/2010 at 16:12:25

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Roberto
I think he was quoted in the Echo but it was around the time of the last AGM when he stated that EFC's true debt was probably over £75 million.

Now that may include money owing Green in a side letter or something or outstanding payments for players but I do remember being surprised at the time because the accounts didn't show anything like that.
Andy Fletcher
27   Posted 17/06/2010 at 12:23:10

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Nice try, Charlie, but that's the gross figure, do you get to spend all your gross pay or do you have to pay tax, then pay the rent, then pay for everything else... and what you have left is what you can spend?

In Everton's case, that's a minus figure I'm afraid.

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