Everton accounts discussion and ownership

[Matt Damon]

I had a read of this, posted onto Moanyweb.

Its from a Bletcher Report discussion of Everton's financial situation.
http://bleacherreport.com/articles/378517-why-has-nobody-bought-everton


Now, it doesn't really tell us anything we don't already know.
My first instinct was KEIOC propaganda hence why certain groups are already all over that like a rash. First comment on there.


The guy who writes this is very very negative in his style of writing generally. I HAVE NO IDEA why he suggested the sale of Rodwell for a measly £15million in there either???? It was neither a valid valuation or appropriate given that there is no need to sell the player at 19 with 4 years left on his contract when his valuation could jump further and further.


Bit of a piss take that. And NOT truly reflective of the Everton financial situation!!!!

Equally, the whole issue of the 6.9m player amortisation loss is a contentious one. Mainly its definition. It seems to be a hang over from the signings of 2007/2008 when the club went out buying players. And that we may see similar issue next season (from the 4 signings this summer).


HOWEVER, this this is a key point. The guy is never going to be positive as THE WHOLE ENGLISH FOOTBALL FINANCIAL MODEL IS FLAWED not just Everton. But Everton's cost rise management has been excellent. £ per point and we've outperformed everyone really.


I back this point up by - and people will remember I've often claimed the comparison with RANDY LERNER'S ASTON VILLA as an important one.
http://bleacherreport.com/articles/375262-randy-lerners-money-talks-at-aston-villa

Here the guy's suggestion matches what I've said about the situation at Villa this summer.

Aston Villa's financial issues are massive:
Aston Villa’s reported net debt has increased by 18% from £72.3m to £85.2m, though this would be nearly £100m if the post balance sheet loan notes of £12.5m were included. The net debt as at 31 May 2009 comprises £84.5m loan notes and £9.2m of bank loans and overdrafts less £8.5m cash. Although the debt is getting larger, it still looks reasonable compared to Manchester United, as it’s much lower (£100m vs £716m) and, in stark contrast to the Glazers, is financed from Lerner’s own company, rather than banks. According to The Times review, only four clubs have more debt than Villa: obviously Manchester United, Liverpool and Arsenal, but also (worrying drum roll) Portsmouth



For those interested - DO NOT JUST READ THE EVERTON ARTICLE IN ISOLATION.

No analyst would ever just look at one company. They'd compare companies to their competitors and the whole market.

This guy hasn't really. Its flawed because of that and its probably music to KEIOC ears. But its not truly reflective of whats going on * see bottom

His article about Everton purely focuses on Everton; (I've never said anything was perfect @Everton its not we know this: commercial revenues should be increasing especially compared to our competitors and must improve)...

The mere fact that say compared to Villa, Everton's COST CONTROL has been tight and hasn't been allowed to spiral is a good thing.

It makes us a more viable business because when costs inflate, they are very difficult to get back under control without say: doing a fire sale, losing far more long term and therefore damaging the club. Everton grew the quality of the playing staff but did so by keeping costs minimal (at a time when ALL CLUBS costs were growing at a higher rate).

But unlike Villa they didn't do it without INFLATING THE DEBT TO £90million. They also didn't inflate Wage:Turnover to 84%!!! (Everton's 62%)
And the operating expenses jumped by nearly 50% ! and the playing/coaching staff by 50% from 86 to 134 (Evertons 80 to 86)


KEIOC need to recognise costs have not jumped like Villa. And MUST be kept controlled.


Aston Villa took a massive gamble and it looks to me like it hasn't paid off. No champions league = major cost control issue this summer (and debt repayment at Lerner's discretion)

Which is why we've seen the instability, compared to that seen at Everton. And will do so more, compared to Everton this summer.

Are Everton going into this summer with instability? No we are not. That is key and we shouldn't be allowing anyone to cause it either.


The fact is given that the stadium is yet to be resolved (increase in revenue), the debt is half the level of Villa's, and the fact that wage:turnover hasn't been allowed to balloon. Therefore Everton are out of most of our competitors a decent if not the best potential investment.

The reason why none has come: Kenwright is waiting on something (stadium? team performance? the RIGHT investor? the RIGHT price for his shares?).


** Everton are a decent position out of any club because they didn't balloon the debt like others and costs haven't ballooned either
** the next revenue generator (stadium isn't yet in place).
** that the likes of commercial revenues have got room for growth (and have underperformed but could do better).


Felt the need to write this after seeing a blatant attempt to make Everton appear in a worse position than they are... especially given the state of our competitors. Made more illustratively by the misinformed claim that we should sell Rodwell, then seeing KEIOC comments on there.

 

[Matt Damon]

I'd argue that given the fact that unlike other clubs Everton haven't ballooned their wage:turnover or debt level then YES WE CAN continue as suggested. We do not need to sell or cut costs (or at least for two seasons should we so choose).

We don't need savage cost cutting this summer (unlike Villa who's debt went up 20% and wage turnover up to 84% and expenditure ballooned by 50% with no net increase in revenue this season!!!!)

we - Everton - can sustain our playing squad if not add to it (in bits and pieces) because we didn't do this.

- Mucha
- J. Silva
- J. Beckford

No instability at Everton. Certainly not this summer.


Villa will have to sell players this summer. Just watch some clubs - the [Poor language removed] is going to hit the fan!

EXAMPLE 2: BIRMINGHAM CITY - Seymour-Piece is threatening to take into recievership the club if fees aren't paid to them by May 27th
http://www.bcfc.com/page/News/NewsDetail/0,,10412~2025651,00.html?
Following today's media coverage regarding Birmingham International Holdings Limited, the company that owns Birmingham City Football Club, the following statement has been released to update supporters...

Birmingham International Holdings Limited acknowledges that it has been in litigation with Seymour Pierce disputing the payment of fees and that summary judgment had been obtained by Seymour Pierce in relation thereto.

Birmingham International Holdings Limited is currently seeking leave to appeal the decision.

Birmingham International Holdings Limited stresses that the amount in dispute is immaterial to it and if payment is required to be made, will not have any material adverse effect on its financial condition or business.

It is stressed that Birmingham International Holdings Limited has not and will not lose control of Birmingham City Football Club as a result of this litigation.

http://news.bbc.co.uk/sport1/hi/football/teams/b/birmingham_city/8622657.stm?
Birmingham play down row with bank Seymour Pierce
Birmingham City's parent company insists it has not lost control of the club, despite an escalating row with investment bank Seymour Pierce.
The bank won a court order for club owner Carson Yeung to pay £2.2m by Monday, but the money did not arrive.
Seymour Pierce has now warned it could sell the club to recover the fee.
But Birmingham International Holdings (BIH) said: "BIH has not and will not lose control of Birmingham City FC as a result of this litigation."
Seymour Pierce successfully sued Birmingham in March to recover the fee it claimed to be owed for its role in Yeung's takeover.
Yeung's company, BIH, is currently seeking leave to appeal that decision but played down the significance of the disagreement.

This one isn't over. Its known that Birmingham City's debt has DOUBLED in the past 12 months and their wage:turnover is near 98%!!!!!!




Keith Harris, making a fortune out of flogging football clubs........... needs to be watched closely. He's benefiting hugely out of selling "companies" with huge debts and ongoing losses.

This man should be considered suspect.

 

[dixie1928]

So to sum up: some clubs spend more than Everton. A number have clubs have greater, unsustainable debt than Everton. True.

But then you go and spoil it all by saying something stupid like IT'S ALL A KEIOC PLOT. (shrieks, moans and curses off stage).

Fitzpatrick was simply responding to a comment about KEIOC that the author made.

Frankly, scraping the business terminology and analysis from the post leaves an opinon which may or may not be valid. Time will tell. I happen to think that you are being wildly over optimistic. As a potential trophy winning club, we're shafted till Kenwright finds the right man / group to take on the Club.

 

[davek]

"The losses over the years would have been even higher if the club had not been selling players. Over the last five years. £40m has been contributed by what accountants call “profit on disposal of players’ registrations”.

Surely not. All clubs are selling clubs...blah, blah, blah....

 

[Matt Damon]

So to sum up: some clubs spend more than Everton. A number have clubs have greater, unsustainable debt than Everton. True.

But then you go and spoil it all by saying something stupid like IT'S ALL A KEIOC PLOT. (shrieks, moans and curses off stage).

Fitzpatrick was simply responding to a comment about KEIOC that the author made.

Frankly, scraping the business terminology and analysis from the post leaves an opinon which may or may not be valid. Time will tell. I happen to think that you are being wildly over optimistic. As a potential trophy winning club, we're shafted till Kenwright finds the right man / group to take on the Club.

I didn't comment about what Fitpatrick wrote, I was commenting at the nature of the article, and the fact first comment on there - yes you guessed it KEIOC.

Its not widely over optimistic. My view is there will be a contraction in player sales and wages in the league. But being as Everton have already controlled costs to the extent they have our club is used to operating within guess what - A BUDGET.

I've not scraped the barrel. Its not a market report, its my opinion in the 30 minutes I had for lunch.

And there we have it: "As a potential trophy winning club, we're shafted till Kenwright finds the right man / group to take on the Club."

That's just your and I believe KEIOC's view. When they should be supporting the club, ESPECIALLY GOING INTO THIS SUMMER and next season, its about point scoring.

KEIOC want to be taken seriously on the football quarter? Stop the underhanded digs at the club, or people that disagree with you or going along with some accountant in Switzerland... who claims Rodwell's value is only £15 million and might be sold this summer.


You're not the only people with a brain you know.

 

[Matt Damon]

"The losses over the years would have been even higher if the club had not been selling players. Over the last five years. £40m has been contributed by what accountants call “profit on disposal of players’ registrations”.

Surely not. All clubs are selling clubs...blah, blah, blah....

Wait till the summer. Aston Villa will be selling... (they have to for the points indicated above)

 

[Neiler]

Have to say i agree with Matthew on almost all of his points above, i can see the summer being a difficult one for almost all PL clubs, with fees and wages contracting everywhere bar the very top. In fact their wont be much movement at all and the bargain basement is likely to be overcrowded with shoppers this year. The burden of debt isnt sustainable for almost all PL clubs -Credit isnt readily accessable even if you can come acorss it your paying a mega rate of intrest. Yet we are nicely poised to sustain the impending storm with our cost vs turnover ratio, if we continue to manage the club as we have.

To be honest now is the time not to spend as was last summer, i was pleased we didnt spend a lot, as much as we all like new players, keeping your cost base down is a must now and in the next 3-4 years. In actual fact it is better for the club not to invest to be honest.

In footballing terms we have a good young squad sprinkled with wiley old heads - we can be more then competitive with what we have and an astute small purchase or a loan.

Speaking frankly Everton are in one of the best positions in the league to weather the impending storm.

 

[Matt Damon]

Have to say i agree with Matthew on almost all of his points above, i can see the summer being a difficult one for almost all PL clubs, with fees and wages contracting everywhere bar the very top. In fact their wont be much movement at all and the bargain basement is likely to be overcrowded with shoppers this year. The burden of debt isnt sustainable for almost all PL clubs -Credit isnt readily accessable even if you can come acorss it your paying a mega rate of intrest. Yet we are nicely poised to sustain the impending storm with our cost vs turnover ratio, if we continue to manage the club as we have.

To be honest now is the time not to spend as was last summer, i was pleased we didnt spend a lot, as much as we all like new players, keeping your cost base down is a must now and in the next 3-4 years. In actual fact it is better for the club not to invest to be honest.

In footballing terms we have a good young squad sprinkled with wiley old heads - we can be more then competitive with what we have and an astute small purchase or a loan.

Speaking frankly Everton are in one of the best positions in the league to weather the impending storm.

YOU GET IT!

The only bit I don't agree with is the emboldened bit and that is just the last sentence.

Is not getting Mucha, J Silva and Beckford investment?

I don't believe in this whole "galactico" thing. You create players. If you have money to spare you might invest some of it in a player you cannot create. But for a GOOD MANAGER that should be an exception not a rule.


The whole media machine's been setup for that. Sky Sports News complaining about lack of activity last January.... thats how ridiculous its all become.


Managing cost is crucial for any business success. bang per buck as the yanks say.

But Neiler gets it. To be honest - I think when Moyes says "Everton are not the Everton of 2004" is so right.

If we can get players of the calibre of Johnny Heitinga that shows you he speaks the truth. Johnny Heitinga. Not exactly lighting Spain alight.

Everton pay £6million and get a £15million player*. Thats the point.

*I'd say he's priceless really

 

[Goat]

Moyes lies.

 

[Matt Damon]

Moyes lies.

Already got an infraction. So will not comment lest the holy wrath of Danny descend on me like like a pack of Wools (like Goat).

 

[chicoazul]

I'm not even sure who's side I'm on anymore, I used enjoy baiting the angry, paranoid KenWRONG types then decided that they're alright so now show some sympathy.

LIENESS.

 

[Neiler]

YOU GET IT!

The only bit I don't agree with is the emboldened bit and that is just the last sentence.

Is not getting Mucha, J Silva and Beckford investment?

I don't believe in this whole "galactico" thing. You create players. If you have money to spare you might invest some of it in a player you cannot create. But for a GOOD MANAGER that should be an exception not a rule.


The whole media machine's been setup for that. Sky Sports News complaining about lack of activity last January.... thats how ridiculous its all become.


Managing cost is crucial for any business success. bang per buck as the yanks say.

But Neiler gets it. To be honest - I think when Moyes says "Everton are not the Everton of 2004" is so right.

If we can get players of the calibre of Johnny Heitinga that shows you he speaks the truth. Johnny Heitinga. Not exactly lighting Spain alight.

Everton pay £6million and get a £15million player*. Thats the point.

*I'd say he's priceless really

Well i was speaking in relative terms to be honest mate, if you turn a profit, by all means spend, but we dont turnover the margin of profit to make any significant signing.

Im thinking our turnover will be down and tighter this year in comparisson to others years given no cup final, lower league placeing, not on Tv as often as other years - we will also miss Europa League revenue next year as well. Even with the increase in overseas rights i dont expect things to balance out and our turnover will be down which will mean we wont turn a profit.

Yet i understand your point, if we borrow say 5 mill for a player and the player turns out to be eventually worth 20 mill then its worth while, the risk associated is massive though and marked with ifs and buts. Probably that scenario is more likely to happen at Everton, with Bill and Moyes then anywhere else.

Personaly i would sit on what we have and wait on the implosion to pass, or at least signs of recovery in the inevitable down turn i think we will see this summer.

 

[billycopper]

Well said. Ok, so we haven't got the fanbase of United, Liverpool or even Spurs, so we're not going to be as commercially attractive to investors and we're not going to generate as much income from tickets and merchandising, but we have managed our finances sensibly and looked to expand wherever possible, such as into the Thai market.

I've said before that our solid foundations and shrewd management will see us continue to progress on an upwards curve, whilst clubs like United and Liverpool are not as strong as they were a couple of years ago. There's no reason why we can't seriously compete for a Champion's League place on a regular basis. If a run in that tournament is worth £25m and we're £36m in debt....you do the maths.

Until we can resolve the ground issue we will be treading water to a degree. By responsibly managing debts, achieving results on the pitch and nurturing the youth system we're accomplishing far more than could be expected of a club of our current stature.

 

[KelseyGrammer-Beast-SuitsBlue]

Hang on hang on hang on, screamed the Hartlepool people.
Anyway, havn't overseas rights just gone up substantially? Villa - them with no shirt sponsor? Brum with all those players demanding contracts?

Everton were run badly for a long time, under Peter Johnson. It is miracle of miracles we didn't fall. Risdale showed him how it was done by sending Leeds down faster than Northern Rock shares. They havn't recovered. But they lived the dream. We were made to suffer the nightmare of Nyarko, Bakayoko, Bilic, and a host of other category 'D' players never heard of at the time and not heard of since.
The situation we find ourselves in at the moment is of playing catch-up because of all the lost ground we suffered back in the 90's. Harsh but true.

 

[chicoazul]

Hang on hang on hang on, screamed the Hartlepool people.

Loving the obscure reference.

I used to go with a girl from there, you know that their mascot is called 'Angus the monkey at FC Hartlepool?