Everton, our summer transfers and short term cost control regulations

[Pootsy]

Why don't we do a deal with Southampton.

We sell them Stones for £50m
We buy Fraser Forster for £50m

then.....and here is the cheeky part.

We sell them Fraser Forster for £50m and buy Stones for £50m. This gives us the Player Profit we need to keep stones and increase the wage bill and it offers Southampton the chance to do the same.

 

[chazzle_dazzle]

Why don't we do a deal with Southampton.

We sell them Stones for £50m
We buy Fraser Forster for £50m

then.....and here is the cheeky part.

We sell them Fraser Forster for £50m and buy Stones for £50m. This gives us the Player Profit we need to keep stones and increase the wage bill and it offers Southampton the chance to do the same.

I think... just think, that might end up being investigated that deal mate.

 

[The Esk]

@The Esk with regards to this, our first big of major transfer business isn't relying on shifting stones first is it? I'm guessing it doesn't matter which way around deals are done, as long as our summer business on a whole fits within the FFP structure you mention.

This is in no way me asking do we have to sell to buy ha i know that's not the case.

It's what we receive/spend over the whole financial year 2016/17 that's important - so as long as we generate enough non-broadcasting revenue before end of May 2017 there's no order in which it has to happen. Obviously if we are relying upon player sales rather than sponsorship to boost income then it has to be done either in this window or the Christmas window. Common sense suggests it would be this window.

@The Esk

Who does Goodison belong to? Is that under the ownership of Everton Football Club, or was it part of the deal with what Moshiri bought? Could he use Blue Heaven to purchase a revamped, and slightly more valuable, Goodison park and put that money as non broadcast income? Could that be the reason that he never bought over the 49% so that Goodison doesn't become under the ownership of Blue Heaven? Wonder what the value of Goodison would be? £0.5m - £0.75m per acre? Ground sits on circa 9 acres.... potential for £5-7m there.

Probably chatting bubbles, but I'm just trying to think outside of the box.

Ultimately Goodison Park is owned by the top company of the group, Everton Football Club Company Limited. Currently there is a charge against the ground relating to the company's debts - however I understand that's now been paid off although there's no confirmation from Companies House yet. If you start transferring assets to falsely generate profits the PL can look at the "fair value" of transactions to determine whether or not there's anything untoward.

(ps that's not the reason he only bought 49.9%)

I understand the rationale wrt player salaries and the differences in profit on player sales between, say, a Lukaku and a Stones.

However, given that we are likely to be buying high-priced high-salaried players (if the likes of Mata or Witsel are true), we are still going to be left behind comparatively when it comes to player salaries at the top of the PL (we may be matching Spurs' total last year but everyone else is also going to be increasing their budgets).

So, with an unconfirmed stadium and any kinds of naming rights shenanigans still years away, what are the options for the immediate years following which do not involve us selling any more 'home-grown' profitable treasures? (Added: given that the new purchases are unlikely to be as profitable.)

Shirt sponsorship, better commercial contracts, higher match day revenues are the only legitimate options (other than player sales).

There will be the prize money from winning the Premier League this year too...

That's the spirit - sadly included in broadcasting revenues though!

 

[Dominic]

Shirt sponsorship, better commercial contracts, higher match day revenues are the only legitimate options (other than player sales).

So a share issue wouldn't be an option either?

 

[bizzaro]

@The Esk

What will the drop of 10% in the GB£ relative to the EURO do to our plans this summer?

Will Moshiri have contingency plans in place (and foreign currency) to ensure we are not negatively impacted in the short or medium to long term.

 

[atrottel]

Shirt sponsorship, better commercial contracts, higher match day revenues are the only legitimate options (other than player sales).

So, if for the next couple of seasons after this one, we want to increase our wages bill by substantial amounts (maybe not as substantial as this year, but still in the 10s of millions to reach the level of the competition) we are going to still going to be talking about player sales profits, rather than stuff like shirt sponsorship or game day revenues (since it is unlikely that those will rise to fill that much of the gap).

(I'm not trying to be a wet blanket, just to see where we are rationally in the short and medium term before any stadium comes in. Incidentally, I now see the commercial logic behind City and Chelsea hoovering up promising youngsters, sending them on loan to lower wage costs, and then selling them after a few years.)

 

[Mogwai]

It's what we receive/spend over the whole financial year 2016/17 that's important - so as long as we generate enough non-broadcasting revenue before end of May 2017 there's no order in which it has to happen. Obviously if we are relying upon player sales rather than sponsorship to boost income then it has to be done either in this window or the Christmas window. Common sense suggests it would be this window.



Ultimately Goodison Park is owned by the top company of the group, Everton Football Club Company Limited. Currently there is a charge against the ground relating to the company's debts - however I understand that's now been paid off although there's no confirmation from Companies House yet. If you start transferring assets to falsely generate profits the PL can look at the "fair value" of transactions to determine whether or not there's anything untoward.

(ps that's not the reason he only bought 49.9%)



Shirt sponsorship, better commercial contracts, higher match day revenues are the only legitimate options (other than player sales).



That's the spirit - sadly included in broadcasting revenues though!

What is the reason he only bought 49.9%?

 

[The Esk]

So a share issue wouldn't be an option either?

No mate, it has to be non broadcasting income.

 

[roydo]

No mate, it has to be non broadcasting income.

I bought a T Shirt and a bobble hat yesterday from Everton Direct.

Pass it on.

 

[The Esk]

@The Esk

What will the drop of 10% in the GB£ relative to the EURO do to our plans this summer?

Will Moshiri have contingency plans in place (and foreign currency) to ensure we are not negatively impacted in the short or medium to long term.

Think it will just make transfers and salaries more expensive like for many other businesses. It may mean we can ask more for a player in Sterling (£) if selling overseas as the Euro amount wouldn't change.

I doubt Everton have hedged any Euro exposure mate.

 

[bizzaro]

Think it will just make transfers and salaries more expensive like for many other businesses. It may mean we can ask more for a player in Sterling (£) if selling overseas as the Euro amount wouldn't change.

I doubt Everton have hedged any Euro exposure mate.

I think the transfers and salaries impact (-10% presently) is NOT a good thing for Everton. It means in salaries we have to pay another 10% potentially versus European clubs to get the players we want. Its a cost.

An unwanted cost.

However, since we have genuine businessmen now on the board it is something I have confidence will be managed appropriately.

Unlike historically.

 

[The Esk]

So, if for the next couple of seasons after this one, we want to increase our wages bill by substantial amounts (maybe not as substantial as this year, but still in the 10s of millions to reach the level of the competition) we are going to still going to be talking about player sales profits, rather than stuff like shirt sponsorship or game day revenues (since it is unlikely that those will rise to fill that much of the gap).

(I'm not trying to be a wet blanket, just to see where we are rationally in the short and medium term before any stadium comes in. Incidentally, I now see the commercial logic behind City and Chelsea hoovering up promising youngsters, sending them on loan to lower wage costs, and then selling them after a few years.)

The Chang deal concludes at the end of season 2016/17 and assuming a successful season I can see a significant uplift from the paltry levels achieved with Chang. We may be able to extract ourselves from the Kitbag and other outsourcing deals (Sodexo is up in the summer of 2017 as well) plus other commercial revenues from better marketing and our own merchandising. So there is significant scope for lifting non-broadcasting revenues after this next season.

You are correct re the City/Chelsea model

 

[JimEFC]

One question I have is about Leicester City.
Their wage budget has to be in the bottom half of the PL...so they can only increase that by £7m + other income.
What is therefore funding their big splash out on new players?
Arguably we are hit harder by this than them, since they have a lower starting point for total wages paid and its not a percentage it's just a figure, £7m.
But even so, howcome they are so cash-happy? Is this winners' money for the league title, or the new tv contract, or are they relying on selling someone for an enormous profit (N'golo Kante being the obvious choice)?

 

[Nymzee]

One question I have is about Leicester City.
Their wage budget has to be in the bottom half of the PL...so they can only increase that by £7m + other income.
What is therefore funding their big splash out on new players?
Arguably we are hit harder by this than them, since they have a lower starting point for total wages paid and its not a percentage it's just a figure, £7m.
Is this winners money for the league title, or the new tv contract, or are they relying on selling someone for an enormous profit (N'golo Kante being the obvious choice)?

I'd suspect it has something to do with their shirt sponsor and the naming rights to their stadium (King Power is the travel retail company owned by the Leicester owners).

 

[The Esk]

One question I have is about Leicester City.
Their wage budget has to be in the bottom half of the PL...so they can only increase that by £7m + other income.
What is therefore funding their big splash out on new players?
Arguably we are hit harder by this than them, since they have a lower starting point for total wages paid and its not a percentage it's just a figure, £7m.
Is this winners money for the league title, or the new tv contract, or are they relying on selling someone for an enormous profit (N'golo Kante being the obvious choice)?

Good question mate, The short term cost controls only apply if your wage bill in 2016/17 is higher than £67 million. Last year was £48.2 million so they have a lot of slack to use before restrictions apply.