Everton FC Annual Report and Accounts 2022-23 – Part II

I realise other options exist with a reasonable chance of happening but my money is on us going under. And I won't lose as much money betting on that than our investors have

I mean, this is simply ugly beyond explanation. We are in debt up to our eyeballs, and because of that we aren't a good investment in the least.

The smart money is waiting for us to declare bankruptcy, then swoop in and buy Everton at a ridiculously low price by Premier League standards.

We aren't a financial mess, we're a financial nightmare!

Pray to God 777 can't meet the Premier League requirements placed on them, and MSP ends up with the majority of the shares. If so, we have a chance at surviving.

Hindsight being 20-20, could we really afford BMD? Will we get any ROI from BMD? Should we have poured a few million into renovating Goodison?

Earlier last year you had projected we would make a profit for 22/23. Then in July you said you’d suggested we might break even but had sadly revised your figures — even though you had suggested we wouldn’t break even but actually make a profit.

So while I agree with the general tone of your negativity and criticism of Mosh, Kenwright etc. I’m afraid I can’t look at your numbers any more and believe you’re in the know or on the ball when your initial projection of profit turns out to be a near 100 million pound loss. That’s a pretty big discrepancy mate. Imagine how the markets would react if analysts projected a company to make a profit then it lost almost as much as its allowed to lose in a 3 year period in just one year? Sorry mate but your analysis doesn’t cut the mustard.

Not making an accusation but something has been going on for this mess to occur or is my perception suspect?

I hope DBB enjoys her multimillion golden handshake. Disgusting.

Paul the Esk is no Nostradamus and his financial projections/predictions need to be taken with a barrel of salt but at least he tries to explain the latest round in our spiral to bankruptcy with some clarity for those of us who are not versed in business accounts.

Whilst DBB was flaunting her honorary professorship and overseeing the decline of our club the RS appointed a hard nosed businessman, Peter Moore, who in the few years he was there oversaw PL a and Champions League success.

Competent financial and senior management is what we need. No more phonies and cronies.

Is Everton's Strategic Review working one year in?

Comment #5 was mine.

I'm no business guru but couldn't we all see where this was going?

Little Miss Dynamite! My arse.

The comments section were the most interesting, I wonder if any of them have changed their minds since about Mrs. Baxindale.

Everton are a private company. Getting current up-to-date information is a hugely difficult task and given the number of senior financial journalists, industry figures and investors who privately seek my opinion, they have some value to many.

In previous day jobs, I have had highly paid analysts backed by huge investment banks offer projections that are as accurate or inaccurate as mine on public companies that have to present financial data on a quarterly basis.

I do this as a hobby in my spare time (i) because (sadly) I find it interesting and (ii) there's a huge information gap that is rarely filled by professional journalists. Sports finances is still very much a niche and media companies provide minimal resources especially when, in the grand scheme of things, Everton are a bit of a side show.

So it's caveat emptor with my figures and opinions, although "buyer" is hardly appropriate given I never charge for my content.

I'm less concerned about projections - they're informed guesses, with the usual caveats, no more, no less. What I am concerned about are the possible dire consequences of the numbers we do have. Combine the current dire financial situation, which involves a worsening trend, with the prospect of further points deductions in the next few days, and the uncertainties about future (and current?) ownership - then I'm seriously concerned about our future survival.

A variety of projections / predictions, based on a variety of scenarios about finances, sanctions, future ownership, etc.

I think when official bodies such as the OBR often get their calculations wrong I think for someone to critisize your figures which you do voluntary is a bit disappointing. As you rightly point out getting financial information from a private company like Everton can be extremely difficult, and I take your figures as your best guess on limited information.

What I would like to ask is you say we had a Covid facility from Metro bank for £30m reduced to £11.25 in June 2023. Do you know who paid off the £18.75m

My other question is you say our loan from MSP of £158m is not in the accounts, but by ref to the Premier league conditions on 777 partners. I don't understand why this loan isn't in our accounts and why has the MSP loan anything to do with 777.

If the MSP loan is not repaid by 777 (or someone else) by mid April MSP can take control of Everton Football Club through acquiring 67501 shares from Moshiri (part of the security arrangements MSP have in place). The 777 bid then fails (i) because MSP have control (ii) they failed to meet the PL conditions

I cover much of it here:

https://theesk.org/2024/03/30/moshiri-is-about-to-lose-control-of-everton-the-question-is-to-whom/

Neville Southall
https://x.com/NevilleSouthall/status/1775268208918065316?s=20

Nev was out by 20 years or so but every single person who supported Kenwright either in or out the club should be absolutely and utterly ashamed of what they’ve enabled to happen to this football club. Shame on them all.

I too appreciate the digging and the diligence you show with the numbers. For people who want to find a little more context, I suggest listening to your podcast where your two contributors ask all the sorts of questions a less number smart person might.

Given the fact that we now have 3 three creditors with upwards of £150m staked in EFC, that none of them will want administration (including MSP, notwithstanding their money being against the stadium, who will not want the vagaries of someone pulling us back out of administration), isn't it reasonable to assume that if 777 fail there will be some kind of compromise arrangement, led by MSP, to secure each creditors position. Maybe including equity for debt?

Do you think we could get some time off after we tell them we have got rid of the worse offenders?

What was your opinion of the late Chairman? If you don't wish to talk about the dead, I will understand.

Ideally a compromise position should be sought but there are real issues in reaching this, including do MSP want to commit longer term to the Everton "project"? Who funds the short term cash requirements & who funds the remaining stadium expenditure?

Whilst it's not impossible that suitable answers be found to each of these questions, it's not a given neither by any means.

In summary, if MSP don't get their loans back by the middle of this month, then by default do they take ownership of Everton, and therefore become the new owners of Everton FC and all the current debts for the opex and capex for the day to day running of Everton FC and the new stadium?

Thank you.

I think initially his intent was well meant, but he gradually became out of his depth.

He should have gone at the very latest when he backed the wrong horse and hung on to the very end.

I'm not speaking ill of the man as I never knew him, but his stewardship of Everton has put us in the position we currently find ourselves in.

And I simply will never forgive the headlockgate situation when the few privileged turned on the people that keep this club going with their false accusations.

There you go, Dave!

Like you, over the years, I have worked in large companies where it is extremely difficult – even as an employee with access to partial information – to accurately project how a year will work out. The running joke at one was that we relied on The Evening Standard's financial section to find out how we were doing!

Working as an outsider, I think the general perspective you manage to deliver is remarkable – and far more instructive than the (lack of) information the club provides. On behalf of those of us who value your output – please keep going.

Apparently our club has a Communications Officer! Any idea what they do all day?

Are you doing an article on yesterday's trip?

The going to and the coming from are often the most entertaining and interesting parts of your articles given the joyless stuff that you have to view.

My questions are:

1) Are Everton the only club in this position?
2) How abnormal is this for a large football club like Everton outside of the “big six”?
3) Will the new stadium at Bramley-Moore Dock fix all this in the long term?
4) How many Premier League clubs are operating without debts?

Sadly, I agree with you that trend is likely to be seen as an aggravating factor. However, I'm clinging to the hope that if we have breached the £105M, it is by a minor amount...

The 2018-19 adjusted loss of £59M drops out of the equation, so by my reckoning, an adjusted loss for last year of £40M or under would put us in the clear. However, that's assuming that T-2 is based on the mean of the two covid years. Do you know whether that's the case?

Dave @33,

Dave, I understand that some people are reluctant to “speak ill of the dead” but I fail to see why. I mean, no bugger's got a good word for Hitler.

Ray (41) Yes I understand that point of view and I'd be an hypocrite if I said otherwise because I have no trouble slagging a self-serving narcissist who looked after himself more than he did Everton FC but Paul (The Esk) might have a different way of seeing things.

As for Adolph, he wasn't all bad and he was a Catholic altar boy when he was young! And to think my church turned me down when I asked to join the altar servers, their loss!

I only got home early this morning.

Next time we meet Dave, we can talk all day about history. Big passion of mine and I don't just mean Everton.

I hope you are well, Dave. I am tired!!

The relative lack of transfer action during the last window tells me that there are clubs close to the PSR limit.

But those great things come at a cost – the success was unsustainable without huge investment and any investment they did make will now be punished by the Premier League.

Probably an even better example of the rigged nature of football these days. It's impossible to break into the entrenched elite group of footballing brands for any length of time, the rules won't allow it.

The PSR pitfalls that come from ambition and the closed-shop elite Premier League will get full airtime, something we failed to achieve.

Sympathy for Everton is I'm afraid significantly weakened by the complete financial mismanagement of our club by a few people, but principally Farhad Moshiri.

Many thanks for your articles but I don't think I've seen anything from the club as to how they might trade out of this position. Indeed, from yours above, they seem to be stating the opposite.

I don't see another 15,000 on the new stadium gate 20 times a season as being enough unless all players take a 50% wage cut and all play until Ashley Young's age.

If all it takes is the owners, whoever that turns out to be, to pour money in for additional shares, then why do Man City have a problem other than not being straight-forward and above board.

Everton did not sack them, so no wrongful dismissal case. Everton did not suspend them whist they investigated their dereliction of duty. They chose to leave. So the only conclusion was that they knew what chicanery had gone on behind the scenes and have been paid to keep quiet via NDC agreements.

They probably know full well that Moshiri was only washing Russian monies for his mate. On the financing of the stadium, didn't Moshiri state right at the start of construction that he would be both willing and able to fund the whole build if he could not secure alternative funding from elsewhere? Not sure if any of you on TW remember this or am I imagining it?

Frankly, given her lack of additional experience and lack of qualifications for the job, her payoff was a disgrace. She may well have been under a fixed-term contract and was being paid to the end of the contract. However, we are not privvy to her employment contract and its early termination.

As far as I can see, she is not currently engaged but I doubt she will get anything like her last job.

The cost of early termination for managers and their entourage must be staggering and a major contribution to our current crisis.

I found your piece about MSP acquiring Moshiri's shares if a new owner isn't in place by mid-April, really fascinating.

Now I know you went on to qualify although this is the case in all likelihood they wouldn't necessarily go ahead with this proposal and may just extend the loan facility.

What I find interesting is firstly why none of our local journalists or even any of the journalists on the nationals have mentioned this scenario?

By the way, I am not doubting you in the slightest over this.

Also I wonder why Rights & Media Funding would have allowed MSP to have such an agreement, as Rights & Media Funding allegedly blocked any takeover by MSP. So if they are aware of this agreement, wouldn't it give MSP ownership, which they were against when first mooted.

At the time of the MSP loan (end of May 2023) Everton were in desperate circumstances financially, the MSP loan was an absolute necessity. I suspect R&MF agreed to the security arrangements demanded by MSP. The conversion of the loan to equity was not part of the security arrangements and therefore MSP through their change of control clauses (i) had the right to object to the conversion and (ii) felt they could do so without impacting the club's finances. The charge on BHH is of course, entirely different and a backstop for MSP to protect the interests of their limited partners

Just the facts that the owning family business (Duty-Free Shops) took a huge hit during the pandemic and that they overspent on players in the last 2 years and got relegated.

Just a pity none of the journalists who have contacted you have bothered to even publish these accounts even though they are in the public domain as you say.

Obviously Michael Tabor, who owns R&MF, is a resident of Monaco, like Moshiri, so not hard to see how their involvement came about.

I think what this highlights is how far Everton have fallen down the pecking order as far as sports broadcasters or journalists are concerned. I would imagine if this was happening to our neighbours or the clubs along the East Lancs Road, this would be receiving a lot more attention.

When the news broke of Jim Ratcliffe entering the race to buy 25% of Man Utd, the BBC thought that was so newsworthy, they sent a journalist over to America to doorstep one of the Glazers as he was entering a restaurant.

So I thank you for keeping us Evertonians informed as nobody else seems to be bothered.

Philip Green has been and still could be advisor to Moshiri and Usmanov. He was also advisor to Kenwright and the accounts are of the nature of accounts he would have overseen.

The MSP situation is very interesting. Moshiri may be able to source the money required via 777 Partners and take the opportunity and fade into the background. Does gaining control by this method, either by MSP or 777 Partners, require Premier League approval, leaving Moshiri as a holder of shares and owed secured and unsecured debt?

Interesting that there is a Monaco connection with R&MF to a Monaco-based Financier.

As Somerset Maugham said “A sunny place for shady people”.

Premier League clubs' £1B of losses in 11 charts

Not least because on squad value and wages we're a mid-table side under-performing – the opposite of what seems to be stated as fact on here.

If this is what it takes for us to be crap, imagine what it would cost to be good!

In answer to your last question, maybe not that much, with the qualifier that good in my book would be what Phil Walling used to call “seventhish”.

No one outside Moshiri's circle knows the full story regarding the Club finances.Moshiri whole finance setup and source is only partly known.So every connection is up for grabs as far as analysis of the situation is concerned. I agree with Somerset Maughan quote, but Monaco is very much a case of connection amongst it's small population of citizens.It will all come out in the wash anyway.

AI

Could explain R&MF objections.Moshiri has less worries regarding the MSP loan than expected. The loan could be a dig out.

AI

Could explain R&MF objections.Moshiri has less worries regarding the MSP loan than expected. The loan could be a dig out.

Manchester United £1,196.6m total cost!

*Maguire is using the CIES Football Observatory report for the information, and it's included in his section on Total Squad Cost, so I assume it's a comparable measure.

Thanks Laurie, for the link.

BBC Sport Mar2023.

There may be more to this than meets the eye.

Liverpool had invested in players prior to that period and therefore were able to sell. Suarez to Barcelona in 14/15 for example.

But generally, yes they've invested much more wisely. It's very expensive buying crap players.

When did you ask the question?

Liverpool sold Coutinho for a staggering amount plus the likes of Ibe, Solanke and Brewster for more than a decent amount.

Mind you, we got good money for Stones and Lukaku which wasn't sensibly reinvested.

A question for Paul: What impact did our auditors refusing to sign off the accounts have on our plight?

Yes, had we capitalised interest costs as per the restated 2021-22 accounts, our excess over the PSR would have been £13.5 million.

Jerome #64,

Alisher Usmanov is not connected with MSP in any sense.

People tend to forget the amount of investigation by various countries that these Russian Oligarchs are under, and the punishments that can be applied.

I put in an initial loss-phased question and did not believe the Usmanova - MSP connection that was brought up.

I then put in a more direct question, but by mistake spelt Usmanov's first name wrong. AI not only confirmed the connection, but told me that they had corrected my wrong spelling of his first name.

I then put in the direct question with the correct spelling and got the above. Somewhere in the world there is a direct reference to Alisher Usmanov's connection to MSP Sports Capital.

Let's be honest, without Usmanov's companies sponsoring us, we had no unrelated football income. It's the perfect storm.

Sorry to beat my exhausted drum but, for a club of our size, our marketing has been sub-standard. Our match-day revenue is way behind. We spend £55 on a ticket maybe buy a pie and pint, but otherwise we frequent the pubs around County Road.

I hope the club is going to grasp the opportunity with the Everton Stadium.

Ian @75. The Everton Heritage Society and Everton in the Community do great work, but I wish we would drop the "People's Club" label. It comes from an era where we evolved into plucky Everton.

No, we are Everton.

Apologies, no offence meant to anyone. I just don't like that tag. Never have.

"The People's Club" is an EitC hook line in my opinion. Leave the EitC back at Goodison.

BMD needs to focused on football and NISI

I am only posting what I have come across. But did Alisher Usmanov sell his 30% holding in Arsenal FC to MSP Sports Capital? That was what was reported at the time and would suggest a connection.

'Yes, Alisher Usmanov is an investor in MSP Sports Capital. His involvement and investment in the company have been reported by various reputable sources within the business and sports industries.'

AI

Sorry Paul the Esk, no matter how many times I put in the question into AI the above or similar comes up every time. But it gets worse:

'Yes, Russian billionaire Alisher Usmanov is indeed an investor in 777 Partners, a private investment firm based in Miami, Florida. Usmanov is known for his various investments in technology, mining, telecommunications, and other industries. His involvement with 777 Partners showcases his diverse investment portfolio. If you have any more questions or need further information about Alisher Usmanov or 777 Partners, feel free to ask!'

Any matchday revenue increase comes primarily from hospitality packages and not from pie and pint prices. It's why the BMD pricing upto now includes these meal packages.

Any idea that we're massively behind basic season ticket pricing is mistaken. As it is it's a good job it's not priced on performance and, God forbid, entertainment.

We are 5th from bottom of the list. Way behind the rest of the league.

Roughly mid-table in cheapest.

The only meaningful published number is matchday revenue and this will only increase significantly with spending inside the ground, particularly with hospitality packages.

Go to Man Utd, Liverpool, Chelsea and Man City nowadays and I see it's a day out with people happily spending £150 plus a head and a visit to the club shop, that's where the money is.

I've been to United many times and was at Newcastle this week.

We don't spend as much at Goodison as other clubs.

Our most expensive season ticket is just shy of £700.

Fulham's is going to be £3000. Tottenham and Arsenal's are close to £2000.

I appreciate we have to accommodate for our fanbase, but we need to figure out how to generate more revenue. It won't happen at Goodison, so it has to be a strategy for the Everton Stadium.

A balance to be struck in making sure the club stays close to the traditional support, but capitalises on the opportunity the new stadium will offer.

Pricing is complicated and can't just be a comparison against highest London pricing (although for example West Ham also undercut some of our season tickets). Anyway maybe the RS get Allardyce out of retirement then we'll be pretty even.

I guess you can average out.

My point is the higher prices other clubs charge.

I don't want to see supporters charged out of the game.

My sister works for Anfield. Their highest cost is around £900. But they generate a lot of revenue around match day tourists.

Is there a connection between Alisher Usmanov and MSP Capital?

Is Alisher Usmanov a investor in MSP Capital?

What is the connection between Alisher Usmanov and MSP Capital?

Has Alisher Usmanov any involvement in MSP Capital?

Is Alisher Usmanov an investor in 777 Partners?

Anytime I have used Al, I either get specific answers or general answers. In all these questions, I am getting specific answers. So the AI is picking up on information that is available from all available sources with no barriers of language or access. I don't know the time frame it is working in. Searching the internet language is a barrier.

Usmanov would have people who could counter information searches on the internet, but Al is a different kettle of fish according to my son who studied AI programing at Masters level. Setting up a website which as part of it's security counters AI is difficult and takes an up-to-date and very proficient software engineering professional.

It's accumulated data related to your questions and placed Usmanov with two completely different companies as a partner. Really poor generator.

We're all friends here. I have to say, as an observation, not criticism, regarding these years of ToffeeWeb discussion about the Everton ownership and board.

More than any other poster you seem to view it all thru a kind of "Twilight Zone" prism. Nothing is too fantastical that you don't think it might be true. Even to writing paragraphs and more as if said fantasy is true.

Entertaining. To me anyway.

But this AI one? C'mon now. Even you can't really get on-board with it. The fact is no normal, in-depth search for information connects Usmanov to either MSP or 777. Which is correct.

I remember the days when a few raised concerns about Kenwright and got dog's abuse for it. Anyone that persisted with their concerns was continually asked to provide evidence. It turns out that the evidence unfolded over years.

Moshiri and Usmanov are very much part of the same continuing story which has unravelled and will continue to unravel in the years ahead. You will see it. Your hope of a parcel solution will be a long wait. Hopefully Everton FC comes out the other side standing. By the way, those that do unravel the truth and act are rarely acknowledged and never given credit, such is life and groupthink.

By the way , on checking, it was not MSP who bought Usmanov's or USM Holdings Shares in Arsenal. I should have checked on AI. As for AI, you will not hear the last of it, you can be sure. AI is developing at a technological innovation pace, faster than anything ever before. I have no opinion on it, because yesterday's opinion would be out of date.

Made us look small time and seemed like we were appealing to a “People's Princess” audience.

It may have gone down well in the Luvvie Domain of Theatre Land but on football terraces?

What I find interesting, Jerome, is that whilst Bill Kenwright was alive, both MSP and this unnamed American consortium, were both turned down by Moshiri, and I've got no doubts that one of the first things both of these groups would have done once they had purchased Everton, would have been to get rid of Bill Kenwright.

It's a watch this space, and obviously depending on how much people want to speak “ill of the dead” but Kenwright has left a terrible legacy (whatever his sycophantic friends in the media portray) and I think we will be hearing a lot more about his ill-fated reign in the near future.

You are right regarding Arsenal and my recollection was wrong.

I always thought that Bill Kenwright harboured the notion that he would continue to control Everton, even when Moshiri hit the buffers, by being on the inside track of a takeover, whether Everton survived or not in the Premier League.

The wrong things got the better. It would be only natural that he would not want parties involved that did not need him and his associates. All who were doing well and some managing a golden handshake.

I know this may appear to labour things a bit, but I feel that what we got was a kick in the arse.

Hopefully we will receive the answer in the next couple of weeks.