Stadium vs Squad

by   |   03/04/2017  6 Comments  [Jump to last]

There has been a lot of talk this season about it being a period of transition, both on and off the pitch.

Off the pitch, naming rights for the training ground, the binding together of our loans into a single interest-free one by Moshiri, and the progress on the new stadium have all been positive. On the pitch, the rebuilding process has already started, with signings like Gana and Schneiderlin proving to be decent additions. A sprinkling of youth in Holgate and Davies have also given us a lift.

However, we have now come to an important stage in terms of kicking on, both on and off the pitch. Off the pitch, we need to come up with £30M to pay Peel Holdings for the site of our new stadium. We will probably need to also have a deposit in place prior to gaining any loan approval for the £300M needed to pay for the stadium. On the pitch, we need a couple of quality centre-halves, at least one creative midfielder, and at least one quality striker, maybe two, if Lukaku leaves in the summer. Easily £100M plus.

At present, even with Moshiri's money and contacts, Everton do not have the finances to adequately cover a stadium and a squad. Player sales and TV money in the summer may look easy on the eye right now. But take payments in instalments, tax, agents' fees, day-to-day running costs for the season ahead into account, and the huge sums of cash suddenly shrink.

So what should the club do? Sink the cash in hand into the stadium, guarantee its progress, and keep debt to a minimum? Doesn't give you much chance to buy top class players. Spend big in the transfer market and hope to somehow make up the cash for the stadium while waiting for planning permission? A big ask given our resources and revenue streams. Split the pot of money evenly and see what we can squeeze out of it? This could mean doing neither properly.

It's genuinely hard to say. Don't spend the money on the squad, we fall further behind the six teams above us in the table. Don't make proper progress on the stadium, it's groundhog day all over again and another golden opportunity lost.

My gut is telling me that the club will put the stadium first. I can see us pinning our hopes on Koeman staying a full three seasons and hoping that none of the teams below us overtake us for 7th place. We will probably spend big on one, maybe two players in the summer, and hope to hang on to Barkley. Cut-price deals for players like Luke Shaw, who has fallen out of favour at Man Utd according to reports today, will be the norm, and promoting youngsters, at the right pace or not, will continue.

Interesting times ahead.

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Reader Comments (6)

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Eric Myles
1 Posted 03/04/2017 at 14:36:25
"We need to come up with £30M to pay Peel Holdings for the site of our new stadium."

Don't worry, the money's ring-fenced.

99.9999% of it anyway.

Dennis Stevens
2 Posted 03/04/2017 at 15:55:32
I don't think it's all from the same pot, Kieran.
Thomas Lennon
3 Posted 04/04/2017 at 10:27:18
Different pots but can't guarantee no impact on squad – hopefully minimal. One thing is for sure, no stadium means no improvement long term which ultimately means increased risk of relegation. The stadium isn't an option we can kick around the corner any more.
John Raftery
5 Posted 04/04/2017 at 11:25:12
As the article suggests, the club faces a tricky balancing act over the next few years. It is now or never for a new stadium so that simply must happen. That does mean however we will need to perform very well in the transfer market just to stay where we are in the league.

Certainly we cannot afford to sign any expensive duds and it would be very helpful to have a few more players coming through from the Under-23s and the Academy who are top class.

Brian Williams
6 Posted 04/04/2017 at 16:43:58
With talk of Barcelona exercising their option to buy back Gerry, Watford allegedly making Cleverley's move permanent, and Niasse ripping it up at Hull, it looks like we could be in for a little windfall of £25m or so if all three "moves" go ahead.

That'd be a decent down payment on a new centre-back!

Tony Cunningham
7 Posted 06/04/2017 at 13:02:45
We may need a deposit in place in advance of getting £300 million; however, of course having the Council acting as a guarantor may reduce/ do away with the need for a deposit.

If the Council is signing up for 40 years does this mean our loan will be for 40 years? Does that mean we hope to get a low interest rate and low annual payments?

If say we got £300 million loan (investors) asking for 3% interest (I only chose that as I'm too thick to know what would be a real rate for such a deal and I'm using a mortgage site to work it out and it offered me 3% on £300,000 so I'm keeping the same 3% figure!) then over 40 years we'd have to pay back a total of £676 million which would be £17 million a year for the loan and £4 million for Council (£21 million).

Is that crazily pricey in today's football market (considering the new TV deal will boost our income by approx £40 million this year!)

Okay, all of that is highly theoretical and I ain't no mortgage advisor and I'm sure in reality 3% would be too low (ask the Glazers at Man Utd) and would also vary, so happy to hear people explain what the reality would be on loans.

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