FAN ARTICLES

Let's Be Realistic

By Matthew Lovekin :  22/07/2010 :  Comments (48) :

This has once again been an eventful summer for Evertonians, and we have not even reached the business end yet. It all started so well with four quick signings, an experienced, quality back-up keeper, two promising young strikers and a proven lower league goalscorer. However, we have now lost a very promising young goalscoring England U21 midfielder in a complete debacle situation, for nothing, and potentially losing one of our best players this summer, or definitely next summer, again for nothing. There are still doubts about our most creative player as well.

On the plus side on lack of activity, Cahill, Rodwell and Baines have all committed for the immediate future at least, and it looks like Jagielka will be staying as well as World Cup finalist Heitinga despite several tabloid rumours.

I for one would be happy if the transfer window slammed shut right this minute. Gosling and Ruddy are two disappointing losses, but Pienaar would be a big miss. However, with the sight of negativity on the horizon, the usual critical and negative supporters are coming out of the shadows to voice their opinions, but let?s look at the facts:

We have no money for transfers. Moyes has stated as such this summer and we knew it last summer. Everton could only afford to buy players last year when the protracted Lescott saga had finally reached its conclusion and we basically spent the lot straight away. Admittedly, it was well spent and Everton came off with the better deal with three good players by selling one good player. The only downside to the whole Lescott debacle is that we are now paying a lot more on wages. Heitinga earns more than Lescott did, let alone Bily?s and Distin?s wages as well. This brings me to the main point of the article: wages.

I?m not sure of the exact figure, but I?d approximate around 70% of our current income is spent on player wages alone. Now this in Premier League terms is not that bad, especially when you consider the likes of Man City, but compared to a normal business, this is a horrific amount to spend on staff wages. The remaining 30% of our income is probably spent on non-playing staff wages, utilities, general running of buildings such as Goodison Park and Finch Farm, and debts. In accountancy terms, we are struggling to break even. For the year 2008, Everton posted a profit of £26k, which in Premier League football terms is next to nothing. You might say, a profit is profit and better than a loss. True, but for the year 2007, Everton lost £9.4M and for the year 2009, lost £6.9M.

Everton have arguably a correct recent policy of finding good young players, getting the best out of them, and hoping they stay at the club. This is the best and probably the only policy that we can afford to do. In fairness, under Moyes this has generally worked. There have been one or two that have escaped (Rooney, Lescott, and Gosling) but generally Moyes? philosophy has worked wonders. Now with market demand of players continuing to ask for more wages and other clubs tapping them up by offering more wages, Everton seemed to have reached breaking point in financial terms. We are still offering players new, improved contracts, but at what cost? The wages are taking up all the money, there is no money to re-invest in the playing staff, there is no money for a new stadium, there is no money, full stop.

We can all moan at Bill Kenwright for failing to find the investment this club needs, but we need to be realistic. Do we want a sugar daddy like Man City that could walk away at any point and leave the club with an unsustainable wage bill that could in effect bankrupt the club? Personally, I would rather know that the club is run properly like a company should be.

Another option is to do the opposite. Reduce the wage bill and have a set limit for the total wage budget. If a player wants wages that will send us over the budget, they simply get an ultimatum, accept what we can afford or find another club. This will allow us to have a regular transfer budget but less of a wages budget and probably a lot less quality of players that we currently have. The final option is what the club are doing now, effectively spending the whole budget on wages, which leaves nothing at all for transfer fees. This is not a bad option, but fans have to understand that there is nothing in the pot for that marquee signing that we all crave. Eventually, we will also pass that break even point and start losing money, simply by continually increasing the wage bill, without any transfer fees. That moment looks to be on the horizon. We don?t know how much money Pienaar is asking for, but if it breaks the current wage structure, then it is only going to hasten the snowball effect. I would love to see Pienaar stay at Goodison for more than just next season, but something clearly needs to give on the financial statements.

The answer is probably having a more proportionate balance sheet. Rather than 70% spent on player wages, set a budget of 50%. This will allow 20% to be spent on transfer fees (£14M per annum at current figures?). This will generate a transfer budget but will mean a smaller squad and possibly less quality with the likes of Pienaar and Arteta almost leaving instantly. Could us fans be happy with gaining one big name player a year but losing two? Otherwise, stick to the status quo and accept no transfer fees will be spent, not just this summer but for the foreseeable future.

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