New Everton Stadium

[catcherintherye]

It isn't that simple though sponsorship from associated parties has to pass the fair value test. Traditionally shirt sponsorship is worth 2 to 3 times the value of Stadium naming rights.

We currently get around £10m per season from Cazoo. So £20m per season for naming rights is going to raise eyebrows.

Even if it didn't then £20m is a drop in the ocean compared to our losses. We are losing around a £100m a year.

Well a couple of points on this (aside from how a set of bureaucrats in Switzerland or wherever think they can assign market value better than the market can).

1) Manchester City have just won a case, where they had a sponsorship that was the biggest in the country. Everton are still a miles bigger club than a City, and objectively miles bigger than what they were when the alleged offences happened. So if we matched the biggest sponsorship we would be fine, and would probably be fine doubling it (I dont know what that currently is though).

2) We have just secured a 30m payment for an option to sponsor the stadium, which has passed the market test. Generally, it would be assumed actually sponsoring a stadium will be worth a lot more than merely purchasing the rights to do so. I'd suggest by 3 or 4 magnitudes. These are philosophical numbers of course, but we can agree on the gist if not the detail of the argument.

So on the two basis above, I honestly wouldnt worry if we were at 100m per/a sponsorship. We are talking about a world class stadium, in the greatest city in the UK, on the iconic waterway that is world famous. There is no like for like comparison really, so I dont see a market test being in any way relevant on the aforementioned numbers.

I obviously dont know what someone would pay, and that will be for the market to decide (or companies within the market). I think USM will likely pay 30m a year initially, with uplift if we get into Europe. However if they sign off on a 20 year deal, and 600m comes into the club, the balance sheet essentially looks fine. Most will go on the stadium (I'd say around 300m ish) and the rest on the squad.

That's just how I see it playing out.

If we fail FFP (I'm not even sure it's a thing anymore) given it was a fine of 3m quid for trying to destroy football, any punishment would have to be more lenient than that anyway, as there can be no moral justification to punish as severely.

I dont know what will happen, but that's one scenario that can be played out. It doesnt deal with the fundamental issues if the club, but I dont think Usmanov/Moshiri are interested in doing so. They seem the sort to just throw money at it and make the issue go away. A stadium gives lots of loopholes that's for sure.

 

[catcherintherye]

Moshiri couldn't pump £200 million in transfers of his money tomorrow due to our FFP situation... however if Usmanov pumps £200 million into the club tomorrow from his money in the form of a naming rights deal towards BMD then Moshiri can then pump his own money into transfers as our FFP situation is pretty much sorted due to that naming rights still being counted as revenue into the club regardless of what Everton intend to use it towards.

Meanwhile the stadium is also paid for - two birds with one stone.

Soon as Usmanov paid the club £30 million to be front of a none existent que for naming rights you knew this was the sort of scheme they had alongside their FF naming rights deal etc.

its why Usmanov will never be officially on Evertons board.

I could see a 20 year deal, at say 30m a year so 600m. 350m ish to build the stadium, the other 250 to provide funds over the next 2-3 years. If we get Europe automatic contractual uplift.

The balance sheet would also go from a 100m loss to a 500m profit.

And yes, USM and Moshiri are no longer considered linked business as per the UEFA rules now, so it is pretty much open season on what can or cant be agreed

 

[gwladysnight]

Moshiri couldn't pump £200 million in transfers of his money tomorrow due to our FFP situation... however if Usmanov pumps £200 million into the club tomorrow from his money in the form of a naming rights deal towards BMD then Moshiri can then pump his own money into transfers as our FFP situation is pretty much sorted due to that naming rights still being counted as revenue into the club regardless of what Everton intend to use it towards.

Meanwhile the stadium is also paid for - two birds with one stone.

Soon as Usmanov paid the club £30 million to be front of a none existent que for naming rights you knew this was the sort of scheme they had alongside their FF naming rights deal etc.

its why Usmanov will never be officially on Evertons board.

In the last accounts we lost £134m. That was with the £30m USM naming rights. So without it, we would have lost £164m. The next accounts will almost certainly be worse.

So even if we got £200m upfront for a Stadium rights deal, that would only fund the losses for the next 12-18 months.

 

[gwladysnight]

Well a couple of points on this (aside from how a set of bureaucrats in Switzerland or wherever think they can assign market value better than the market can).

1) Manchester City have just won a case, where they had a sponsorship that was the biggest in the country. Everton are still a miles bigger club than a City, and objectively miles bigger than what they were when the alleged offences happened. So if we matched the biggest sponsorship we would be fine, and would probably be fine doubling it (I dont know what that currently is though).

2) We have just secured a 30m payment for an option to sponsor the stadium, which has passed the market test. Generally, it would be assumed actually sponsoring a stadium will be worth a lot more than merely purchasing the rights to do so. I'd suggest by 3 or 4 magnitudes. These are philosophical numbers of course, but we can agree on the gist if not the detail of the argument.

So on the two basis above, I honestly wouldnt worry if we were at 100m per/a sponsorship. We are talking about a world class stadium, in the greatest city in the UK, on the iconic waterway that is world famous. There is no like for like comparison really, so I dont see a market test being in any way relevant on the aforementioned numbers.

I obviously dont know what someone would pay, and that will be for the market to decide (or companies within the market). I think USM will likely pay 30m a year initially, with uplift if we get into Europe. However if they sign off on a 20 year deal, and 600m comes into the club, the balance sheet essentially looks fine. Most will go on the stadium (I'd say around 300m ish) and the rest on the squad.

That's just how I see it playing out.

If we fail FFP (I'm not even sure it's a thing anymore) given it was a fine of 3m quid for trying to destroy football, any punishment would have to be more lenient than that anyway, as there can be no moral justification to punish as severely.

I dont know what will happen, but that's one scenario that can be played out. It doesnt deal with the fundamental issues if the club, but I dont think Usmanov/Moshiri are interested in doing so. They seem the sort to just throw money at it and make the issue go away. A stadium gives lots of loopholes that's for sure.

Unfortunately, that isn't true Catcher. City's FFP sanctions had nothing to do with the Etihad deal. The original sanctions were because City had losses of over £150m for the 11-12 and 12-13 seasons. The later sanctions were due to the Das Spiegel leaks.

Secondly, the £30m payment for the right to acquire the Stadium naming rights hasn't passed the market test. FFP only applies to teams that qualify for Europe. We will only know if it has passed the market test if we qualify for Europe in the next two seasons.

 

[blueblue]

In the last accounts we lost £134m. That was with the £30m USM naming rights. So without it, we would have lost £164m. The next accounts will almost certainly be worse.

So even if we got £200m upfront for a Stadium rights deal, that would only fund the losses for the next 12-18 months.

Dig deeper into that loss and you will see that losses of that size are unlikely to be repeated , they are exceptional items rather than losses on pure trading.
However, all clubs even the richest and most successful have posted huge losses. We are no different in that respect. Football is on it's knees , FFP is arguably dead as it was intended or at least weakened. Anything that brings additional money into the game should/will be welcome.

 

[magicjuan]

Unfortunately, that isn't true Catcher. City's FFP sanctions had nothing to do with the Etihad deal. The original sanctions were because City had losses of over £150m for the 11-12 and 12-13 seasons. The later sanctions were due to the Das Spiegel leaks.

Secondly, the £30m payment for the right to acquire the Stadium naming rights hasn't passed the market test. FFP only applies to teams that qualify for Europe. We will only know if it has passed the market test if we qualify for Europe in the next two seasons.

So we hire a crap manager with no chance of getting into europe and we save ourselves a fortune ! Genius

 

[gwladysnight]

Dig deeper into that loss and you will see that losses of that size are unlikely to be repeated , they are exceptional items rather than losses on pure trading.
However, all clubs even the richest and most successful have posted huge losses. We are no different in that respect. Football is on it's knees , FFP is arguably dead as it was intended or at least weakened. Anything that brings additional money into the game should/will be welcome.

Pre COVID in the previous accounting period we lost £111m.

As for FFP being dead, surely it is the opposite. Lack of fair play rules massively inflates transfer fees and wages. It doesn't bring money into the game it takes money out of the game in the form of players wages and transfer fees.

Virtually our entire income from all revenue streams goes on player wages.

 

[gwladysnight]

So we hire a crap manager with no chance of getting into europe and we save ourselves a fortune ! Genius

Personally, I think Benitez is another Allardyce someone who won't get us in to Europe but also guarantees us staying up.

 

[MickA]

This fish licence thing must surely hold everything else up?

I doubt we can finalise a deal with Peel until the green light is given. Taking their sweet time.

Surely you'd need to isolate the dock before moving fish? It's still part of the connected northern dock system.

 

[ForeverBlue92]

In the last accounts we lost £134m. That was with the £30m USM naming rights. So without it, we would have lost £164m. The next accounts will almost certainly be worse.

So even if we got £200m upfront for a Stadium rights deal, that would only fund the losses for the next 12-18 months.

We are fine believe me.

Dunfries and Nunes deals in progress

wE aRe SkInT dOh

I'll leave that to Usmanov & Moshiri to worry about think they know more than cough Everton fan on the internet...

 

[ForeverBlue92]

Dig deeper into that loss and you will see that losses of that size are unlikely to be repeated , they are exceptional items rather than losses on pure trading.
However, all clubs even the richest and most successful have posted huge losses. We are no different in that respect. Football is on it's knees , FFP is arguably dead as it was intended or at least weakened. Anything that brings additional money into the game should/will be welcome.

He's just on the wind up / wishful thinking.

Any real blue knows our FFP issues have been down to us spunking huge fees in recent years and paying large wages to a large squad of dross.
Without European football.

All shifted off the books:

Bolasie £80k a week
Schneiderlin: £100k a week
Besic: 40k a week
Walcott: 100k
Klaassan: £70k a week

All out of contract and off the books next season or sold in Kean/Benards case potentially:

Benard: 100k+ a week
Kean: £60k+ a week
Delph: 60k a week
Tosun: £80k a week
Siggurdsson: 90k a week
James: £100k a week


Now we aint chucking money around but have increased sponsers / the upcoming Naming Rights Deal on the ground in addition to trimming the wage bill/squad size we'll be unlikely to make losses of that nature in the future.

 

[ForeverBlue92]

I could see a 20 year deal, at say 30m a year so 600m. 350m ish to build the stadium, the other 250 to provide funds over the next 2-3 years. If we get Europe automatic contractual uplift.

The balance sheet would also go from a 100m loss to a 500m profit.

And yes, USM and Moshiri are no longer considered linked business as per the UEFA rules now, so it is pretty much open season on what can or cant be agreed

The Reds dont like to admit it due to having tight owners and relying on the ladder being pulled up on those below but the FFP changes came into effect for two reasons:

1. Man City beating them in court
2. The top clubs like Barca/Real being skint due to paying obscene wages.

The new FFP rules next year may not even bother with the whole 3 year loss period - from whats been mooted at this stage it seems to be:

1. More wages based (which thankfully once next June comes most of our garbage on big wages are out of contract).

2. Interestingly enough its muted that any punishments in future will be economic sanctions and not sporting.

If I was a cynic I would imagine 2. Is in place as they know clubs with wealthy backers who break the rules wont bother taking them to court like City over a few million fine etc. Compared to a European ban...

 

[catcherintherye]

Unfortunately, that isn't true Catcher. City's FFP sanctions had nothing to do with the Etihad deal. The original sanctions were because City had losses of over £150m for the 11-12 and 12-13 seasons. The later sanctions were due to the Das Spiegel leaks.

Secondly, the £30m payment for the right to acquire the Stadium naming rights hasn't passed the market test. FFP only applies to teams that qualify for Europe. We will only know if it has passed the market test if we qualify for Europe in the next two seasons.

Fair enough mate. I think we have to agree to disagree a bit on the significance of UEFA's FFP stuff. Where we do have some agreement by the way, was on a post I saw you put earlier which is- if FFP have effectively gone why are teams not breaking it? And until a team does and challenge UEFA's resolve we sort of remain in this situation of limbo. From an Everton perspective, until we make clear we reject it's premise, it is a bit of a red herring. We are 5 years in, and to my knowledge I'm not really sure of any statement I've seen from the club that has said they are not looking to comply with FFP.

In terms of the latter point, it must have passed PL rules, which in many ways are more stringent than UEFA's and haven't actually been tested and failed in a court (and I appreciate there is nuance to that, but again I'm sure we can accept that not taking anyone to court and being unsuccessful is a positive for STCC over FFP). I would be surprised if having passed STCC rules, it would then fail FFP. There's an option it gets time barred out anyway (I believe it is 5/6 years) so there is every chance they can just delay until that becomes irrelevant. Crucially though, as far as I am aware, there is no real "market" for paying for an option on a stadium (never mind an iconic stadium, in the greatest City in the UK on a world famous waterway) so I'm not sure how anyone could credibly make a case it failed a "market test" where no such market has ever really existed.

At the risk of getting too bogged down (as I want to tackle the core point you are making) on FFP I think it's a bit of a bogeyman. I don't think it's enforceable and to date hasn't been enforceable in an impartial court, but crucially I think it detracts from the wider problems. If the owners wanted to break FFP they could, as City have, and lots of others did (including Liverpool). In a time of deflationary crisis there is probably no better time to break anti-inflation rules. However to date they haven't wanted too and really that's a criticism for the owners now, not UEFA.

As for the core point, we are in agreement. The business is ran at a loss and not ran effectively. I think to get overly focused on FFP regulations, which are fraught with danger is perhaps to lose sight of the point- we should not want the club to be losing money.

Our issue is a structural one really. We have a wage bill that is around 50% of the "big 2" spenders in the league (Liverpool and City) but that is unsustainable to turnover. There are 2 options to get around this, you either cut costs or raise revenues.

To raise revenues you need to start qualifying for the European places regularly and ideally start winning trophies. To do this you need to spend more on wages. But by spending more on wages, you then run at a deficit. It's a bad catch 22 all round.

To me there are probably a couple of ways around this. This goes beyond just cutting costs or growing revenues (neither of which are easy in football, as unlike in businesses it's very hard to just lay people off, you need to get a willing buyer).

1) A short sharp shock in increasing of spending to push ourselves into the European places.
2) A longer term re-appraisal of how we spend money. Being very disciplined in only spending on assets that will grow in value.

Both have difficulties. You may fall foul of regulations in law in option 1, and option 2 there will be some variance.

The reality is we are caught doing neither. We haven't spent either enough money, nor have we spent smartly enough. I'd say the board have to make their mind up which way they are going.

 

[catcherintherye]

The Reds dont like to admit it due to having tight owners and relying on the ladder being pulled up on those below but the FFP changes came into effect for two reasons:

1. Man City beating them in court
2. The top clubs like Barca/Real being skint due to paying obscene wages.

The new FFP rules next year may not even bother with the whole 3 year loss period - from whats been mooted at this stage it seems to be:

1. More wages based (which thankfully once next June comes most of our garbage on big wages are out of contract).

2. Interestingly enough its muted that any punishments in future will be economic sanctions and not sporting.

If I was a cynic I would imagine 2. Is in place as they know clubs with wealthy backers who break the rules wont bother taking them to court like City over a few million fine etc. Compared to a European ban...

I'd say we are basically at a point where the teacher has lost control of the classroom. As long as people don't break the rules to much, the current impasse stands.

 

[Hello there 1983]

Fair enough mate. I think we have to agree to disagree a bit on the significance of UEFA's FFP stuff. Where we do have some agreement by the way, was on a post I saw you put earlier which is- if FFP have effectively gone why are teams not breaking it? And until a team does and challenge UEFA's resolve we sort of remain in this situation of limbo. From an Everton perspective, until we make clear we reject it's premise, it is a bit of a red herring. We are 5 years in, and to my knowledge I'm not really sure of any statement I've seen from the club that has said they are not looking to comply with FFP.

In terms of the latter point, it must have passed PL rules, which in many ways are more stringent than UEFA's and haven't actually been tested and failed in a court (and I appreciate there is nuance to that, but again I'm sure we can accept that not taking anyone to court and being unsuccessful is a positive for STCC over FFP). I would be surprised if having passed STCC rules, it would then fail FFP. There's an option it gets time barred out anyway (I believe it is 5/6 years) so there is every chance they can just delay until that becomes irrelevant. Crucially though, as far as I am aware, there is no real "market" for paying for an option on a stadium (never mind an iconic stadium, in the greatest City in the UK on a world famous waterway) so I'm not sure how anyone could credibly make a case it failed a "market test" where no such market has ever really existed.

At the risk of getting too bogged down (as I want to tackle the core point you are making) on FFP I think it's a bit of a bogeyman. I don't think it's enforceable and to date hasn't been enforceable in an impartial court, but crucially I think it detracts from the wider problems. If the owners wanted to break FFP they could, as City have, and lots of others did (including Liverpool). In a time of deflationary crisis there is probably no better time to break anti-inflation rules. However to date they haven't wanted too and really that's a criticism for the owners now, not UEFA.

As for the core point, we are in agreement. The business is ran at a loss and not ran effectively. I think to get overly focused on FFP regulations, which are fraught with danger is perhaps to lose sight of the point- we should not want the club to be losing money.

Our issue is a structural one really. We have a wage bill that is around 50% of the "big 2" spenders in the league (Liverpool and City) but that is unsustainable to turnover. There are 2 options to get around this, you either cut costs or raise revenues.

To raise revenues you need to start qualifying for the European places regularly and ideally start winning trophies. To do this you need to spend more on wages. But by spending more on wages, you then run at a deficit. It's a bad catch 22 all round.

To me there are probably a couple of ways around this. This goes beyond just cutting costs or growing revenues (neither of which are easy in football, as unlike in businesses it's very hard to just lay people off, you need to get a willing buyer).

1) A short sharp shock in increasing of spending to push ourselves into the European places.
2) A longer term re-appraisal of how we spend money. Being very disciplined in only spending on assets that will grow in value.

Both have difficulties. You may fall foul of regulations in law in option 1, and option 2 there will be some variance.

The reality is we are caught doing neither. We haven't spent either enough money, nor have we spent smartly enough. I'd say the board have to make their mind up which way they are going.

Evertons wage bill is £88 million.

Man City: £116 million

Liverpools: £125 million

Manchester United: £154 million

Chelsea: £161 million.

We are only 30ish million behind both City and Liverpool in the wage bill.

Link: https://www.spotrac.com/epl/payroll/


We have spent £536 million over the last 5 years. That's more than Spurs, Liverpool, Leicester and Arsenal.

Link: https://www.transferleague.co.uk/pr...tables/premier-league-table-last-five-seasons

When do we get to the point that maybe it's not FFP that has been holding us back these years but instead it is our inept owners?