The group set up by Everton Fans Network to promote City and corporate interest in Everton as an investment opportunity

 PAGE CONTENTS

 EVERTON FANS TABLE 0FFER TO PETER JOHNSON

IiE Press Release, 1 September 1999

Investors in Everton (IiE) wish to make it clear that they have put a firm proposal to Peter Johnson, Everton Football Club's majority shareholder ahead of the announced 2nd September 1999 "auction deadline".

IiE are offering Mr Johnson the opportunity to dispose of his shares via a legally binding trust fund which would sell his shares at ?850 each to supporters and other

interested parties. This deal would allow Mr Johnson to recoup the ?20million that he has invested in the club.

IiE are aware that several other parties are interested in making an offer for Mr Johnson's shares. However, IiE believe that if the September 2nd deadline prompts an auction among rival bidders, this will be to the advantage of Mr Johnson and to the detriment of the club as the winning bidder would be left with less funding to spend on restoring the fortunes of Everton Footbal Club.

If the IiE offer does turn out to be the only offer tabled, then it is clearly the only practical solution to the pressing problem of Mr Johnson's dual ownership of Everton and Tranmere Rovers.

Investors in Everton spokesman Chris Klopper said: "We look forward to hearing Mr Johnson's response. The reaction we have had to the trust idea from many existing shareholders, fan organisations and individual Evertonians from around the world has been overwhelmingly positive.

"They love this idea and are totally behind our plans for broadening share ownership, introducing a full-time professional management and commercial structure to the club and redevelopment of the ground. This would undoubtedly be a very popular solution."

 FANS INVEST FAITH IN EVERTON

By Matt Barlow (PA Sport), Waldorf Hotel, London, 23 June 1999

Everton supporters today launched an investment partnership which they hope will signal the start of a new era for the club based on fan-power. Blue-chip fans met in the City of London to officially unveil "Investors in Everton" and hear football finance experts air their opinions on the future prospects for the club.

All agreed the Toffees could enjoy a happy and prosperous 21st century despite recent crises which left Everton fighting successive relegation battles and slipping behind the Premiership's big hitters. City analysts insisted the club had all the raw materials to become a major player in the future of English football but must act quickly to get Everton onto a sound footing.

Mike Owen of "Investors in Everton" stressed this was just the part of a campaign which he hoped would increase in strength and purpose and prove the club would make a good investment. He said: "We have demonstrated the tremendous potential in Everton FC. Different people have put forward different ways in going forward to do something positive and constructive.

"We can't finish it today but we have adopted a partnership approach and we will be continuing and you will hear more of us."

After presenting the idea of "Investors in Everton" to the City and a number of blue-chip Evertonians, Owen hopes the body will grow and a groundswell of interest will enable the group to have a powerful say in the future of the club. Everton's want-away chairman Peter Johnson has been unable to find a buyer for his majority shareholding in the club. Supporters are keen to see the back of him but desperately want his departure to signal an end to the years of disappointment rather than a further step away from Everton's glorious past.

Speakers Stefan Szymanski, of the Imperial College Management School; accountant Tony Lloyd; Simon Banks, of City-based research company Soccer Investor; and finance expert Professor Tom Canon all agreed Everton had a healthy fan-base linked to an identifiable brand. Growth prospects were enormous at Everton, said Canon, because of the nature of the club's support which included thousands who go to the games and even more, spread around the globe, who rank the Toffees as their favourite club.

Research has shown Everton enjoy a large section of young support, especially among the student population, he added. Canon said: "Everton has a very powerful brand. One of the best in English soccer. It is the fifth most highly-recognised brand in English soccer. This is a massive asset." He also said Everton were not hugely disliked by other club's supporters, which was another benefit in an adversarial sport like football.

Expert speakers also recognised that Everton's commercial branch hadn't maximised its potential in recent years, either by getting the most out of Goodison Park or by selling merchandise. Chartered accountant Lloyd wanted to see the appointment of a full-time commercial director to work alongside a chief executive and a player investment director, to make the most of the investment.

Evertonians agreed the club had fallen behind the leading money-makers in football at a crucial time, as the Premiership embraced new, improved earning powers for the successful, and that something had to be done.

"Investors in Everton" now hope to channel the energies of those supporters who want to do something to change the way the club has been run. How this will be done exactly is yet to be seen, said Owen, but a start has been made and hopefully the interest in the group will prosper.

 EVERTON AN EYE-WITNESS ACCOUNT

Mike Owen opened the conference outlining what Investors in Everton is all about. The following speakers then did their bit.

Dr Stefan Szymanski, co-author of Winners & Losers, The Business Strategy of Football

Gave a simple introduction into the factors that affect footballing success. This boils down to the clubs that pay the best wages doing best in the league over time. Turnover was also closely linked to success on the pitch. Probably stuff we already knew but backed up by some graphs.

Tony Lloyd

Presented Investors in Everton’s business plan / plan for the future, entitled "Everton Football Club: A Blue Print for Change". A measured performance. This outlined a financial package to implement the takeover and detailed plans for moving the club forward post takeover. I won’t elaborate too much here as the full text will be available on the Internet very shortly. The document outlines many of the things Everton has been crying out for in the last 5 years and that seemingly everyone but the current board can see we need. The fundamental issues addressed are the lost revenue due to our outdated stadium (estimated at £25 million over 5 years), our failure to capitalise on the commercial side, and our poor transfer dealings.

Simon Banks, of Soccer Investor, the City of London research house and bulletin

Very interesting presentation outlining the current football investment climate. The city has cooled a great deal on football recently. This seems to rule out a float of the club, and Everton is not currently in any state to be floated (generally float on the crest of a wave). He talked about the difficulty of valuing clubs using standard business techniques. Various methods based on turnover and profitability could value the club at between £27.9M and £46.46M on a debt-free basis.

Generally very positive about the upside for investment in Everton. His general approach was that Everton’s commercial performance is currently so poor (pretty much the worst in the Premiership) that the only way is up, giving excellent potential for growth for a hopefully relatively small investment (contrast NTL’s £100M + bid for Newcastle who are faced with spending £45M to install 15,000 new seats at St James).

Simon didn’t see the Sky / Man Utd ruling precluding the purchase of clubs by media companies in the future (he said NTL may have been better going for Everton!). The current OFT versus Premiership court case could have a big impact on the game if the deal is ruled out by the court. This will affect valuations of clubs very seriously, although he did say that this might not be a bad thing for Everton with our large fanbase. The downside was the amount of debt the club currently has.

Prof Tom Cannon

A lightning quick presentation from Tom Cannon detailing some very interesting facts about the Everton fanbase (I believe his figures are partly from FourFourTwo magazine).

Everton are estimated to have 500,000 supporters in the UK and 250,000 worldwide. Regular match goers (3 games or more a season I think) number between 75,000 and 100,000.

Of all plc’s in the country, Everton are the best represented club at board level. We have one of the youngest fanbases in the country and a large percentage of graduates. He also said that our fanbase was one of the most geographically diverse in the UK. All this set the scene for what massive potential Everton has.

At this point Prof Cannon outlined another possible method to takeover the club. He favours a Venture Capital backed approach, effectively a management buyout. This was over my head I’m afraid. He said that there was the potential for an investor to double their money within 3 years, but warned against people trying to carpetbag the club. A question later from a City person said that the Venture Capital route would not be very likely due to the current debt at the club.

The key to success for the club is in forging very close links with our immediate and 2nd tier of supporters.

Q & A Session

One shareholder asked if any attempt had been made to approach Peter Johnson about some sort of agreement by which P would remain as a shareholder but relinquish the running of the club to others. Prof Cannon said, "No, not at the moment."

Ian Nolan of the shareholder’s Association made an impromptu speech about how the Association had forced EGM’s etc. Think he wanted his moment of glory to honest!

Someone from the city stressed that e.commerce is an excellent way for the club to tap into its fanbase. He’d seen the official website and liked it!

Someone from the Merseyside press then asked: What next? Mike Owen replied with a ready prepared answer. I can’t remember the wording but it mentioned a partnership approach.

Overall, the conference increased my faith in the future of Everton FC. There really are too many good people out there who are Evertonians for things to stay as they are. That’s just my view but I think something good can grow form Investors in Everton.

 INTERESTING FACTS FROM TOM CANNON

Paul Tollet

1. Everton's core support (ie attended 3 games in the last season) was about between 80 and 100k
2. Everton's wider support (ie claimed Everton were their team of preference) about 1 Million in UK and 250k overseas (Man U were unsurprising leaders at 2.5M in UK and 3M overseas)
3. Everton were the 5th most named team when the public were asked to name top English teams (after Man U., Liverpool, Arse and Villa)
4. Everton had the youngest support, and the most educated.
5. Everton was 3rd when it came to teams supported by Directors of UK PLCs.
6. Of the top 10 teams Everton was the least disliked, whereas Man U were the most
7. Everton's revenue was 48% of the average of the 'big 6 clubs' and has been declining since 1970.
8. If our ticket revenues were the average of the big 6 clubs, then the total gate income for the last season would have been £32.4M, instead of the £18M it was. Even if you take Man Utd out of the equation, it still goes to £29.8M. This would have paid off most of the overdraft.
9. This leads to the fact that Everton get the lowest Revenue per attendee/supporter than ANY OTHER TEAM in the Premiership.

My take from the meeting was that the club has been going backwards for 20 years, but the business potential was huge. Everyone has an 'Everton story' when it comes to gross commercial incompetence – this year's season ticket cock up for starters. There is a mass of people out there who will pay more, will buy more merchandise, will attend more games – home and away – will invest in the club, IF they had faith in the management, and perhaps even if the process of supporting the club was easier.

We had another poor season, and yet we had 10 full houses (discounting obstructed views) and getting a ticket for an away game is nearly impossible.

Tom Cannon didn't see a 'Jack Walker' appearing, and didn't think Kenwright would succeed. He went on to suggest a way of moving forward involving a Management Buy-In, the process being that a team of professional managers buy into the business with a view to running it for a period of time. He reckoned that the club could double its revenues in the next 3 years just by getting its commercial operations in order. This management buy-in could possibly be done in cooperation Johnson, but there needs to be an catalyst to make it happen.

There was also a man from the Everton Independent Supporters Association. I think his name was Ian MacIntosh, and he had come down from Merseyside for the meeting. He gave an short, but heart felt speech about the club, its supporters, the history etc etc.