Colm's Corner
Columnist: Colm Kavanagh

The Spinners!
5 April 2005

I didn’t know whether to laugh or cry after feasting my eyes upon David Prentice’s examination of Everton Football Club’s financial prosperity (or lack of) in the Liverpool Echo (here).  Has he replaced Ian Ross as Everton's Head of Public Communications?  Kenny Fogarty has already written a fine piece on this matter elsewhere but, like a moth drawn closer to the light, I too felt that Mr Prentice’s article was worthy of some closer examination, viewed as it was via my own perceived curmudgeonly eyes!

WHETHER Champions League qualification is assured or not, the 2004-05 season has already proved a success story for Everton Football Club.

Can anyone truly disagree with this?  Hand on heart, the answer must be no.  Most of us all feared the worst this season, after the summer we had last year.  It might well rankle with those who refuse to accept we’ve still got major problems at Everton that it is actually possible to enjoy what’s happened on the pitch this season and separate that from the off-field activities and not actually be a “Red in disguise” or a “disgrace to the name Evertonian”. 

I’ve enjoyed some wonderful moments this season – be it last-minute goals, derby-day winners, the team finding themselves confounding everyone and sitting second in the League.  We’ve punched above our weight.  And know what?  It’s been bloody wonderful!  It’s been great to see a smile returning to Evertonian faces.  However, scratch beneath the surface and see if you can honestly see a Club reborn and back where we believe it belongs, “success” built on the strength of a plan to regenerate the Club, on and off the field.

Yet it was built on the shakiest, most unlikely foundations imaginable.  The Blues ended last season with the lowest effective points total in the club's history, trooping into the close season shell-shocked on the back of a 5-1 thumping at Manchester City.  But, if Blues fans believed a three-month break from football would offer them respite, they were proved spectacularly wrong.  Bill Kenwright attempted to streamline and modernise the club at boardroom level, moving long-serving chairman Sir Philip Carter and director Keith Tamlin into non-executive positions and replacing chief executive Michael Dunford with renowned football firefighter Trevor Birch.

Streamline and modernise the Club at boardroom level?  Oh the pen is mightier than the sword and history rewritten!  Last summer we witnessed Paul Gregg finally end his silence to publicly air his frustrations with his fellow True Blue Holdings directors and comment on the unfolding mess at Goodison Park – our debt continuing to spiral leaving the Club haemorrhaging finances at an alarming rate, with the necessary sale of a certain Wayne Rooney a last throw of the dice. 

Paul Gregg remains equally as culpable as those directors (Bill Kenwright and Jon Woods) he now appears to oppose for the mess we’ve found ourselves in over recent years.  Voting patterns within the make-up of TBH left Gregg increasingly frustrated with his inability to improve matters at the Club as he saw fit.  The Gang of One outnumbered by the Gang of Two!  Thems the vagaries of a three-man democracy…

Philip Carter finally removed his head from the sand knowing his time was up and readily accepted the token gesture that is his current position as a Life President of the Club.  I still chuckle at Mr Carter’s cursory dismissal twelve months ago of a proposal to initiate investment from the wider Everton fanbase – “it is best that the matter be put on the back burner.”  Like most things over recent seasons – stick them on the back burner and pray things improve on the pitch to detract from the shortcomings off it? 

Youth Academy?  Bellefield?  Ground redevelopment?  How many more years must we wait before something/anything is done to improve matters in these areas?  These issues were concerning Evertonians back in the days of one Peter Johnson.  What improvements have been made since Johnson’s exit?  A cynic might offer that the only growth over recent seasons has been the Club’s debt.

Despite having conducted life-saving surgery on Chelsea and Leeds United, Birch lasted little more than six weeks at Goodison before resigning. It was the start of a spectacular summer of discontent.  Director Paul Gregg, previously a sleeping partner in the boardroom, decided to adopt a more vigorous role.  Frustrated by a lack of progress in solving the growing financial crisis at Goodison, he announced plans of his own to invest £15m into the club, but on the condition Kenwright stepped aside.  Kenwright refused until he had seen evidence of Gregg's funding - and the identity of his backers. Then a crisis descended into a farce.  Gregg revealed former Blues director Lord Grantchester as his backer. The Lord released a statement claiming he hadn't even seen Gregg's proposals, then changed his mind just hours later, saying he still wanted to see True Blue Holdings dissolved.  That dissolution duly took place, but only after an airclearing EGM had been called by concerned shareholders.

'Airclearing' is not a word I would ever associate with that EGM, Mr. Prentice.  “Concerned shareholders” were informed on that night – by the new Chairman – that investment was incoming via our new friend, Mr Samuelson and his Fortress Sports Fund:  “The reported deal, the Fortress Sports Fund, is an absolute possibility and hopefully will be sewn up in the next few weeks.”  We still await further development on that front.  He also spoke that night about the Youth Academy – “The plan is, in fact, to have two academies now, as Manchester United do, as Arsenal do.  Maybe have an academy for 6 to 12 year olds and maybe another academy for teenagers.”  We still await development on that front.  He stated that the Board endorsed greater communications with the shareholders – “The Board welcomes the initiative of the Shareholders.”  We still await development on that front too.

While flak was flying in the boardroom, on the pitch Wayne Rooney was proving his status as a world class striker at the European Championships in Portugal.  But Evertonians looked on more in apprehension than admiration.  Newcastle United and then Manchester United lodged formal bids for England's star of Euro 2004, and the player himself made it clear he wanted to abandon what he perceived to be a sinking ship.

Indeed.  True, it did end up that way, the kid who became The Boy wanted out.  That was also the advice he was receiving at the time – from his agent, from his teammates and from many pundits who all reckoned his career was best served elsewhere.  Of course, Everton Football Club never wanted to sell the lad.  Nor were we in a position whereby his sale was a necessary evil!  That’s the way it was spun at the time. 

Ignore the rumours indicating that Manchester United had already won the day to sign the lad – Newcastle’s name thrown into the equation simply to add some dressing to a farce of a transfer.  Ignore the fact that Tim Howard, on a pre-season tour of the United States with Manchester United, in the first week of July, had already spoken of United’s attack for this season (2004/05) including Rooney alongside Van Nistelrooij, Saha and Smith!  Ignore the fact that Everton’s merchandise catalogue included next to nothing by way of Rooney merchandise. 

Ignore the fact that Everton had received an “increase in borrowings” from Singer and Friedlander back in February and paid it back a mere fourteen days after Rooney became that horrible little Judas.  The one fact you’ll rarely see aired is that Rooney’s necessary sale bailed Everton out of the shit and saved the “sinking ship” from crashing upon a rock marked Administration.

He wasn't alone.  Tomasz Radzinski followed, and with the paltry additions of striking journeyman Marcus Bent, for £450,000, and unproven midfielder Tim Cahill, for £1.7m, Everton were widely tipped to go down.  Instead, they flourished.  Kenwright announced the Fortress Sports Fund rescue package on the eve of the new season. It couldn't help Everton in their opening day clash with champions Arsenal, but salvation wasn't far away.  The same players who had struggled to just above the drop zone the previous season, showed a steely siege mentality, found a formation which ideally suited the personnel at hand - and upset the accepted order of the Premiership by lodging themselves in the top four.  It was a renaissance which was reflected off the field, too, in the hands of an ambitious and progressive new chief executive, Keith Wyness.  He arrived from Aberdeen, was introduced to supporters at the EGM, then just three months later, at the AGM, drew widespread praise for his financial presentation on how he intended to improve the club's financial performance.  He appears to have been as good as his words.  "This time last year the tag would have been 'cash-strapped Everton', now it would be 'resurgent Everton'," he declared proudly this week.  "In terms of financial off-field performance that is definitely the case.  We have started to put in place some initiatives which, in a commercial sense, will be leaders in their own right.  We are planning some projects internationally that will be the first of their kind. And that is all going to help us move things forward."

It’s amusing to see the words Fortress Sports Fund sitting prettily near the word flourished!  A review of Everton’s financial standing by the local newspaper and only one reference throughout to the never-ending saga that Fortress Sports Fund has become.  Priceless.  Why so?  Straight from the back pages of the Liverpool Echo (5 Feb 2005) – “FSF had promised the Blues money before Christmas.  There have been a long list of complex excuses and delays from Samuelson for its non-arrival - leaving many Blues fans cynical it will ever now materialise.” 

Is the Fortress Sports Fund investment central to this off field “renaissance” or has this rebirth of the Blues uncovered funds from beneath different rocks?  This ‘cynical’ Evertonian would like to hit the refresh button and remind a few people of the words Chris Samuelson had to offer last January, when interviewed by the Daily Post’s Andy Kelly:

Q. When will the proposed deal by Fortress to buy into Everton FC finally materialise?

Chris Samuelson: “I have been in Brunei this week and around 95% of the deal is now done. I will be in Brunei today meeting the regulator when the remaining 5% should be sorted out. It relates to the wording governing the management company of the fund.  Once that is done, the money will go into the fund within a few days and certainly by the end of the week. Everton will then need to call an Emergency General Meeting (EGM) for shareholders to agree the deal. That takes a month so we are probably looking at the third week of February before the money actually reaches the club.  But if (club banker) Barclays are assured the deal is going through then I am sure they will make the money available earlier.”

Q. How certain are you that the Everton board will approve the Fortress deal?

CS:  “Well I am sure Bill Kenwright and John Woods will support it, which is around 40% of the shareholders.  I have seen various rumours on websites about what Mr Gregg is likely to do but he is only a minority shareholder.  We need 50% of support from those who actually vote and, if we get it, that takes care of that.”

Q: Who are the investors involved in Fortress?

CS:  “They are a collection of individuals - not many, less than 10 - who are keen on football and follow Everton. I am legally not allowed to reveal their identities and they prefer to keep a low profile but I am sure a few of them will make themselves known of their own accord in time. They are very supportive and of course there is the option for more money to arrive later.”

Q: Why is the deal being done through Brunei?

CS:  “I have just set up an office in Brunei and we elected to do it here because they have very good laws in relation to cell funds which is the method we are using. Basically the vehicle is a fund of funds and one of those funds is doing the Everton transaction.”

Q: Why have there been so many delays with Fortress?

CS:  “I understand the fans' frustration and I am just as frustrated.  This is the first fund of this type which has been done in Brunei under new legislation so it takes time.  Also the official who was handling our application went back to New Zealand for family reasons but he is now back in his office.  I have made it very clear to the Brunei authorities that it is very urgent and we need their full co-operation and they have been very co-operative.”

There is no doubt that Chris Samuelson talks a good game but Everton fans will want to see the colour of his money before making a final judgment.

The financier, though, believes the signs are good. He said: "As I was changing flights at Singapore Airport this week, I went into a bar for a drink. It had footballs as seats and on the TV they were showing a replay of the Everton v Plymouth game. I thought that was a very good omen."

A very good omen?  Sorry Mr Samuelson but the last good omen I saw involved the shooting dead of Gregory Peck as he was about to slay the anti-christ!

Wyness also revealed that David Moyes would have a significant transfer fund at his disposal this summer . . . NOT purely as a result of the £27m sale of Wayne Rooney.  "Yes, David will have a significant transfer fund," he explained "probably something close to £30m to spend during the summer.  "But supporters must understand the split. Say £12m of that is transfer money, the rest would be needed for wages - and there are about a dozen players who have still not signed new deals.  "It is a good picture, but it is also prudent and within what is sensible.  This is not money we are going to be borrowing, which is very important. This is money in front of us.  The only debt the club is committed to now is the long term securitisation loan - £2.5m a year - which is manageable.  The overdraft is very manageable and we only use it when we need to for cash flow purposes.  Anything we are spending now is controlled. We are not borrowing to spend."

Why has a definite figure of £27m been mentioned in reference to our annual “significant” transfer fund?  The first tranche of Rooney transfer money went straight back to Singer and Friedlander and there are grounds for argument that the Beattie money was a loan advanced on the strength of the second instalment of Rooney money due.  Furthermore, it will take a series of astounding results for us to secure this touted figure of £27m.  The small print in the transfer indicated the following:

…..

Contingent payments of up to £7.0m payable on the occurrence of the following events during the next 5 years -

• Manchester United, European Champions League Winners - £1.0m

• Manchester United, European Champions League Runners Up - £0.5m

• FA Premiership Winners - £0.5m

• FA Premiership Runners Up - £0.25m

• FA Cup Winners - £0.15m

• Rooney signs an extension to his contract at Manchester United - £1.5m

• Rooney earns 20 England caps in competitive games whilst at United - £0.5m

• Rooney plays a further 20 England caps in competitive games whilst at United - £0.5m

Even if these events do not occur, Everton will receive £3.0m provided Rooney remains registered to Manchester United until 30th June 2007.  This sum will be payable in equal instalments of £1.0m on 1st August 2006, 2007 and 2008 if not already paid via the above incentives.

If the player is transferred from Manchester United then Everton will receive 25% of any excess sum over all amounts paid under this agreement.

…..

So, with a little “luck” we might see United finishing second this season and also lifting the FA Cup, thereby “earning” Everton FC a further £0.4m!  I’m certain Arséne Wenger might be an interested spectator when United come to Goodison on April 20!

Is this figure of £30m that is being mentioned (plucked from the ether?) courtesy of our friends in Geneva or is it from an alternative source?  Is it dependant on Everton securing safe passage to the group stages of next season’s Champions League?  I presume it’s not normal practise for a Club to publicly declare what lies in their “significant” transfer fund for the summer ahead. 

With news of further massive price hikes in season tickets around the corner it does no harm whatsoever to indicate “significant” amounts of money being made available for the manager this summer.  It remains to be seen, of course, whether or not David Moyes does indeed get his hands on this significant amount of cash already mentioned by the CEO.  It is the least he deserves.  He has done a superb job this past year and I’ll be gutted for him if we run out of steam (and points!) with the finish line in sight.  It can be a cruel frustrating game at times and Evertonians are hurting right now, fearful of a repeat of 2003.  If it happens then so be it.

In the meantime, as fans we shit bricks!  Wonder could those shit bricks build a new stadium?   

Colm Kavanagh

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