Everton FC - Finances

[deipnosophist]

I think key to understanding a company's performance is the ability to reconcile the P/L statement and balance sheet to the cash flow statement.
So, starting at the beginning :
1) we booked 88.46mio TV revenue in 2014. But how much of this was physically received in the May 2014 fin yr? Are TV monies received in instalments or in a bulk amount (I've heard Aug 1)

2) what comprises the 31.5mio increase in intangible fixed assets (note 10 in the accounts)? McCarthy, Kone, Robles, McGeady cost 24.5mio (which reconciles to the 24.5 mio purchase of intangible assets in the Consolidated cash Flow Statement). So what was the residual 7 mio?

3)We sold Bidwell £1m, Amichebe £6m, Fellaini £27.5m and Jelavich £6m , totalling £ 40.5 m. The Cash Flow Statement describes us receiving 19.421mio. Presumably the 21mio is owed (and balance sheet debtors increased by this amount...). So that reconciles. But surely booked TV monies (some or all) were received after 31 May...where then is this debtor item?

4)Note 21 in the accounts (cash flow ) shows an increase in debtors of only 2,129mio. Pursuant of point3) above....Why ??

5) How are we treating loan fees/wages of loanees and compensation to wigan for RM and staff...in staff costs or other operating costs (to skirt FFP?)?

...that'll do for the moment

 

[The Esk]

I think key to understanding a company's performance is the ability to reconcile the P/L statement and balance sheet to the cash flow statement.
So, starting at the beginning :
1) we booked 88.46mio TV revenue in 2014. But how much of this was physically received in the May 2014 fin yr? Are TV monies received in instalments or in a bulk amount (I've heard Aug 1)

2) what comprises the 31.5mio increase in intangible fixed assets (note 10 in the accounts)? McCarthy, Kone, Robles, McGeady cost 24.5mio (which reconciles to the 24.5 mio purchase of intangible assets in the Consolidated cash Flow Statement). So what was the residual 7 mio?

3)We sold Bidwell £1m, Amichebe £6m, Fellaini £27.5m and Jelavich £6m , totalling £ 40.5 m. The Cash Flow Statement describes us receiving 19.421mio. Presumably the 21mio is owed (and balance sheet debtors increased by this amount...). So that reconciles. But surely booked TV monies (some or all) were received after 31 May...where then is this debtor item?

4)Note 21 in the accounts (cash flow ) shows an increase in debtors of only 2,129mio. Pursuant of point3) above....Why ??

5) How are we treating loan fees/wages of loanees and compensation to wigan for RM and staff...in staff costs or other operating costs (to skirt FFP?)?

...that'll do for the moment

They're all good questions some of which have partial answers in the thread.

There's an old saying in business turnover is vanity, profit is sanity, but cash is King.

Here's a business starved of capital that has tried desperately to grow out of increasing income despite costs growing at a similar rate, at least up to last year.

The biggest problem is that competitors are increasing their income at a faster rate and have the "luxury" of a positive balance sheet when they require additional investment in players.

In summary Everton's finances are improving as a result of the massive increase in broadcasting revenues. Unfortunately our competitiors are moving ahead faster for reasons already discussed.

This situation can only be resolved by a significant injection of capital.

 

[magicjuan]

They're all good questions some of which have partial answers in the thread.

There's an old saying in business turnover is vanity, profit is sanity, but cash is King.

Here's a business starved of capital that has tried desperately to grow out of increasing income despite costs growing at a similar rate, at least up to last year.

The biggest problem is that competitors are increasing their income at a faster rate and have the "luxury" of a positive balance sheet when they require additional investment in players.

In summary Everton's finances are improving as a result of the massive increase in broadcasting revenues. Unfortunately our competitiors are moving ahead faster for reasons already discussed.

This situation can only be resolved by a significant injection of capital.

Isn't that down to collective bargaining as opposed to any busineess initiative or decision making by the club themselves? Effectively we are riding the coat tails of others, due to inability/unwillingness of the board to inject that capital and create a greater rate of growth?

 

[Foot Long Hot Dog]

Isn't that down to collective bargaining as opposed to any busineess initiative or decision making by the club themselves? Effectively we are riding the coat tails of others, due to inability/unwillingness of the board to inject that capital and create a greater rate of growth?

Riding the coat tails of others would be wrong, as we've been an integral part of the PL since it's inception, but your point is right, it's due to the power of the overall PL product as opposed to anything we've done independently.

Everton needs investment both in its infrastructure and it's football team, and the inability of the current owners to provide it (even on a short term basis, e.g. Providing funds for player purchases before the TV cash is banked) has been causing the business problems for years.

 

[Eggs]

......I did Economics at A Level but I do get lost when you business folk get into the detail. I was thinking a glossary of terms would be useful but I suppose I can always Google.

 

[ijjysmith]

I'm not even going to pretend I understand where our money goes.

Really not bothered about WHO other teams have bough (Except one that I really wanted!) but every other team, and some Championship teams have spent more money than us.

This wouldn't irk me so much if we had a strong squad with no areas needed to be filled. But we clearly have. And the manager knows it.

It makes no sense to me in this time where we should have more money than ever that we are so far off the pace here.

 

[The Esk]

I'd agree. But staff costs increased 6 mio yr on yr. If the compensation to Wigan (4 mio according to @Dithering Dougie ) and loan fees (3-4 mio?) went into staff costs, then recurring wages went down...unlikely.

Had a further thought on compensation costs. It could be argued that they are booked under other operating costs as "staff acquisition costs" in order to keep the direct employment costs as low as they can.

 

[MrGrumpy]

Looking at our account and the main thing that jumps out from 13 to 14 was the lack ofSponsorship, 8mil is pathetic when the likes of the top 4 is probably around 100-200 mil, alright it's a bit dodgy on their side but still. Should be easily over 20 mil

 

[TheAlmightyFloater]

How much longer are we locked into the Chang and Kitbag deals?

 

[MrGrumpy]

How much longer are we locked into the Chang and Kitbag deals?

Was the Chang deal like a 6 years deal that goes up a touch each season. That Sponsorship is just criminal, yet Elstone said it was a good deal for Everton

 

[Joey66]

My older brother went on Sat he stated it was £2.85 for a pie, and £4 for a pint of Chang - where's the food money going Bill?

Joking apart does the Sky money come in tomorrow on the 15th, the biggest cah payment ever in its history so how much do we owe on the Vibrec loan?

 

[Heathcliff]

They're all good questions some of which have partial answers in the thread.

There's an old saying in business turnover is vanity, profit is sanity, but cash is King.

Here's a business starved of capital that has tried desperately to grow out of increasing income despite costs growing at a similar rate, at least up to last year.

The biggest problem is that competitors are increasing their income at a faster rate and have the "luxury" of a positive balance sheet when they require additional investment in players.

In summary Everton's finances are improving as a result of the massive increase in broadcasting revenues. Unfortunately our competitiors are moving ahead faster for reasons already discussed.

This situation can only be resolved by a significant injection of capital.

Would you consider selling a couple of the exagerated british premium players in the squad to arrest the slide into debt with the banks and so have Everton FC operating in the black? Might some short term pain equate to long term gain?
With a bumper tv revenues windfall on the near horizon should the club cut its costs and look to maintain premiership survival (and completely sack off cup interest) operate with a small squad and tread water for a couple of seasons and use the bumper financial surplus to pull the club out of the monetary crapper?

Are such financial gymnastics the last lingering thread of hope to turn the club as a going concern around. Pulling itself up by its bootstraps so to speak? (Not that I think theres a chance in hell the current ownership would dare try such a move)

 

[Hogwild]

Was the Chang deal like a 6 years deal that goes up a touch each season. That Sponsorship is just criminal, yet Elstone said it was a good deal for Everton

It's a lazy deal..... Our Marketing/Sponsorship department is crap. This is an area that with proper management could lead directly to increased revenue to fund the end product on the pitch.

 

[chazzle_dazzle]

Not sure if this is the place for this, or how accurate it is (seems thorough enough).

http://www.nakedcapitalism.com/2015...nd-rcd-espanyol-is-a-250mn-pyramid-fraud.html

 

[the_tourist]

this post was interesting giving a detailed breakdown thats easy enough to read.
http://swissramble.blogspot.co.uk/2014/12/everton-blue-sky-mining.html

the problem we have is cashflow. As you see in the post above we had 18.2(cash) in the bank before deals for lukaku barry etc. You can guarantee chelski would have demanded a fair whack upfront plus our normal add ons.
Our shirt sponsorship is 7th in the league, 5.3 mil compared to (fifth in the shirt league) spurs who get more than triple. Weve outsourced catering/merchandising, leading to futher imbalancing books. (those deals likely have merits i dont know)
Our credit rating 12/100 in feb 2011. Would likely stop us getting any decent loans of companies that do that sort of thing.
http://toffeeweb.com/season/10-11/comment/fan/CreditSafeReport.pdf (would be interesting if someone paid for a recent one of these )

its not hard to see why we cant spend heavily on players.