Profitability and Sustainability Rules – Everton’s Position

EFC, within modernity, in my view, should hire you, as the BI specialist, as you have more decorum and nous than the Board of EFC, in the last 72 years.
, by light years.

Your summaries of how it is, is what the current board can’t do.

Turn the mindset and change, the culture, and drive EFC, to the modern day.

It means Everton, could, start, fresh in view of the clubs beliefs.

It seems that the quest, is still on to find a leader and board, worthy of all the
maters EFC. !

If the new manager reckons he needs 2 or 3 new players - I personally think it's at least 4 and maybe 5, then our best players DCL / Richy / Pickford or Mina will have to go for really good prices and the contracts that are ending will also contribute to the finances available, ie wages no longer being paid. Silly wages will also have to stop and a more reasonable figures paid in line with middling teams in the EPL. The model Brands was supposed to have used, will in fact now come about. Buy young, buy low, pay lowish and then sell high.

It's not good is it. Whoever the new manager is, he will have to be a magician. Potter fits the bill perfectly for the scenario we now have to follow. Young hungry players bought cheaply and coached to a very high standard. It's what he does.

How on earth, can Moshiri call himself an accountant and let this mess come about. It's unbelievable.

Based on this, do you interpret last summer as indicating we are already under budget instructions? Maybe rolled out last March around the time Carlo was mouthing off about the ESL being worse than Everton’s financials? Or is this process something that’s yet to be inflicted. In which case I’m wondering if Carlo was telling Mosh to push his luck, Mosh got cold feet, Carlo bailed. The last bit is obviously connecting the dots speculation but just to poke at Martin Mason and Darren I’ll call it FACT.

Jack#2 - if we sell Richy I will be having an Alan Ball moment.

On the spending side of things - our willingness as an organisation to squander money on such a grand scale makes me feel very uncomfortable. It is quite obscene really.

The signing of Demarai Gray for 1.7m was a breath of fresh air for me. I hope to see more signings of this calibre with whatever money we have to spend in the next two or three windows.

Anyway Benitez has gone, but the same problems are not going to go away, without real change, so unless your 27 year’s campaign becomes more savvy Paul, and gets everyone United, and with the same goal, Mr Moshiri is going to keep walking round with his head in the sand, and we all know Bill Kenwright could sell sand to the Arabs.

Probably just my view, but I do wish a few more TWers would try to understand it too before making some of the endless complaints that I read that we haven't done this or that, and have done the other.

If Moshiri's conversion of loan to shares doesn't help us (and that makes sense, I think - it's the same money in effect) then (other than sell players) is there anything that is open to us?

https://www.theguardian.com/football/ng-interactive/2022/jan/18/david-squires-rafa-benitez-sacking-everton-merseyside-blues

So the EFC statement outlining Moshie's additional £100M investment implies that significantly improves the club bottom line – does this mean the FFP issue has been solved and more players can be purchased?

I know this goes against the grain for many Evertonians, just look at the uproar when we sold Digne, Rodriguez and Lukaku – and going back as far as Rooney.

Given our precarious financial position as outlined by Paul above, I am afraid we are all going to have to suck it up for the foreseeable future. Sorry to be so pessimistic but if such a situation can trigger a change in strategy in the club maybe all is not lost.

Why don't you apply for a position on the Fans Advisory Group? You know more than all of them put together.

Thank you.

So, if I’ve read it correctly, we are already operating under the PL massively restrictive financial rules / in effect penalty. If that’s right, then how were we “allowed” to spend any amount of money on theee new players in the last few weeks ? Why haven’t the PL said “thanks for raking in £25m for that arrogant over hyped selfish gobshite Digne, all of that money will go reducing the amount you are outside the FFP / PL Sustainability Rules and no you cannot buy any new players….

I don’t get it. Pails brilliant piece makes sense until I get to the bottom line, the “reality”. Or it’s it the reality ? We’ve been allowed to sell a player and in effect, even if spread out over several contract years etc, spend the income and stay at £60m breach of the rules and budget over sight set by the PL in 2021 even if Jim White hasn’t told us about it…..

It doesn’t add up. Please help Paul as it’s a simplification I know, but either we are being managed by a three person board setting whether we can buy players, or we arnt ? Either we can in fact continue to sell players in the next few days and buy more players, or we can’t ? And either we are in the same crap shape in the summer and an incredibly poor prospect for a new “iconic” mgr or we are in rude health and able to buy who we want and make more losses…..or we can’t ?

What does it really mean ? Because my best guess is we must, as others have said, raise money…..I think around £150m in a fire sale in the summer, wipe out the predicted £105m FFP loss. Just to be able to spend £45m on incoming players which clearly, from a footballing standpoint, is not sustainable and would be an absolute disaster if we are still in the PL ?

Cheers !

In contrast, Premier League football is festooned by wealthy fly-by-night charlatans seeking to screw the max from any source whatsoever, from TV deals to hot-dog sellers, to family-wealthy mascot parents. It's brazen, and corrupt.

Manipulating rules is what created the fortunes of way too many club owners who've identified "Great" Britain way beyond mere football as the most "giving" banana republic in the world.

If you didn't know better it'd make you wonder whether or not we have a lying, conniving, self-serving shit-house in charge of our entire country, never mind our club.

The EFL rules are enforced differently. Firstly they let things go on for several years before investigating. Then when they hit you with fines and punishments you have the option of doing a QPR and just saying "get stuffed," although they also have the Russian roulette option where they will randomly pick a poorly run club whose problems have been public knowledge for years and suddenly dock points or expel them from the league while allowing others in identical situations to carry on. So if we luck out, we can do an Oldham and just carry on regardless, if we are unlucky we drew the Bury card.

Many thanks for posting your very informative, and interesting post here; though I did read it on your site first.

It is an excellent and comprehensive overview of the financial plight (peril?) Everton currently find themselves in. (I sometimes wonder if, at times like these, it is better to be an ostrich...?)

I feel obliged to say that it makes grim reading for the financial future of Everton Football Club.

Obviously, from what you are inferring about the club and the Premier League being 'open and honest' from March 2021, we don't seem to have been punished as of yet seemingly we must be following the guidance and instructions from the Premier League.

Therefore, I'm deriving from that, that we have thus far, toed the Premier League line. Then hopefully, with maybe some 'creative accountancy', and flexibility brought about by removing James's and Digne's wages, plus Digne's received transfer fee, this has allowed us to acquire Mykolenko and Patterson.

Especially if both initial transfers have been done on the 5-year payment plan that was announced for Mykolenko – but not Patterson...? As I presume, that reduces the initial loss from a £17M hit, to a staggered loss over 5 years? (But if that is the case, then why did we take El Ghazi on loan, and put another wage bill on the books? That would appear to be senseless.)

However, that still doesn't provide us with any idea when or how Everton are going to be able to finance the recruitment of new players. Personally, I don't understand how the club has allowed this situation to come about? Though, as another poster has alluded to, maybe this is why Sacha Ryazantsev got the old heave-ho?

Paul, could I also ask your opinion too, please?

The vast majority of Evertonians seem to be fixated on the stadium as a panacea for some of our financial woes, or some sign of Moshiri's 'goodwill' for the club. (Though that could be debated about whether it is part of a financial gain for himself – and his business partner.)

However, in real terms, Paul, what would the additional seating and corporate hospitality actually bring to the club in terms of additional revenue, therefore assisting us in the P&S calculations?

Could I also ask, in your opinion, Paul, wouldn't it be more financially prudent to actually consider improving the commercial aspect of the club before spending so much money on a stadium?

The club has remained, to my mind, a parochial, navel-gazing club when it comes to looking for sponsorship and new commercial deals, eg, why haven't we got a sleeve sponsor yet?

Why have we sought, and gained sponsorship from two new betting companies, one in Colombia, and a newer one in China – which is probably being used to circumnavigate the strict gambling rules in China. Which means that Everton are now seemingly 'knowingly*' aiding and abetting illegal gambling in the Asian market; after dumping SportPeso...?

*Any decent international or off-shore compliance officer would know about that potential loophole.

Also, we haven't seemingly even looked at increasing, outside of Merseyside, the availability of team shirts in any quantity, or accessibility. There has been very little attempt at expanding the domestic market and commercial potential of the club, let alone anything like attempts at expanding the existing international market. Never mind all this, there appears to have been almost zero effort at finding new international markets.

I've looked at the commercial values of the clubs, and am very surprised that Everton in net terms has risen from 12th to 10th in their commercial value in the Premier League over the last two seasons, yet I don't fully grasp, or know the actual figures for all financial revenue and expenditure for each club. I have found some very basic figures below though:

2020-21 Premier League Commercial values

2021-22 Premier League Commercial values

Looking at all this, Paul, I'd appreciate any feedback regards Everton's commercial potential, and further growth in the current market climate. Surely just building a stadium, and expecting a 33.65% capacity increase, is in the long term going to aid the club's financial situation?

Good wishes, and thanks for your time in hopefully reading this.

You wrote about our dire position in regard to profitability and sustainability well over 3 years ago. I'm amazed that it wasn't front and centre when we were interviewing Ancelotti. Maybe heads were buried in the sand?

Insofar as the club issued 100,000 new shares for Farhad to take up last year, yes, he only took up 66,667 of them by converting ~£200M in loans at that time.

The latest transaction was always part of the plan and was anticipated when the 100,000 shares were issued last year, but it hadn't been enacted. It became newsworthy when it was enacted last week.