What the 2016 accounts tell us about Everton’s future (and our past)
Timing is everything.
If proof was ever needed that Everton of the timing and relevance of the arrival of our new investor, then the latest accounts demonstrate that ably.
What we might have looked like today without Moshiri is very different from our future ahead of us. Looking at the accounts, without him we’d have probably not only sold Stones but had to have sold Lukaku last summer – the balance sheet was in such a mess. There would be no dockland stadium on the horizon, and in all probability we’d still have Martinez as manager and certainly not have Walsh and the team he’s building behind the scenes at Finch Farm and elsewhere.
Thus already we have much to be thankful for, yet the scale of the challenges ahead should not be easily dismissed.
Let’s start with the main news item of the accounts – the interest-free, security-free, repayment schedule-free loan of £80 million by Moshiri.
It’s unusual to say the least that a 49.9% shareholder would give the other shareholders who own half the company a free ride, nevertheless that’s what Moshiri has done.
Why has he done it? – out of necessity
Simply put he had to to enable the club to progress. Without the removal of the secured Prudential/AIB loan no ground move, land purchase, or option to buy would be possible. It was critical the loan was removed – it gives us freedom to do what we want, and freedom for Moshiri to acquire more shares in the future.
The short term debt through Rights & Media Funding would clearly affect our ability to borrow when required for the new stadium. It was also expensive, although not as expensive in the past. There’s a new facility with R&MF which might be used in the short term depending upon the level of net spending in the January window, but would not present the problems of previous years given the enormous increase in broadcasting revenues this year.
Looking at the rest of the accounts briefly, it’s a continued tale of under-performance on the commercial front. We must address this as soon as possible to fund future increases in player wages if we are to compete on the pitch.
The argument will be made that we’re held up by being at Goodison Park, we sell out our hospitality etc etc. Whilst that is true, it is the lack of commercial revenues and the gap between our current earnings and those of our competitors that should cause the greatest concern, and be addressed immediately.
It’s clear the Chang relationship will finish at the end of this season, probably to the relief of both parties, I think Chang have not fully benefited from our relationship in recent years and they’ll be happy to move on. What is most important though is that we get full value for the real estate that is our shirt front, we’re currently way below market rates based on the value of other shirt sponsorship deals – it will be interesting to see how much of an up-lift we will achieve. Equally the Kitbag (now owned by Fanatics) and the Umbro deal I hope is being re-examined, I can’t believe we will wait until 2019 to change suppliers.
Those that support Everton will be only too familiar with the expression “That’s Everton that” – loosely meaning two steps forward, one back, or there’s a positive but there’s also a big “but” somewhere in the sentence.
The accounts represent “that’s Everton that”. There’s the huge progress and potential enabled by Moshiri’s capital injection – the enabler for our new stadium and our more immediate progress on the pitch, but there’s also the legacy issues in terms of the current stadium, management, other major shareholders, commercial relationships and un-ambitious thinking.
The positive is that Moshiri has demonstrated his commitment and desire to move the club forward, not only with words but also hard cash. We’ve seen changes to the footballing management team, recruiting and coaching teams, but we’re yet to see the full scale of changes in the boardroom and upper management levels of the club off the pitch.
I’ve no doubt we will, and in the very near future the announcement over Bramley Moore and our new stadium, but let’s be quite clear, none of this would have and will have been possible without Moshiri – the progression has started, and I believe the pace of change will increase also in the coming months.
I started by saying timing is everything, the opening lines to the song with the same title are
“When the stars line up
And you catch a good break
People think you’re lucky
But you know it’s grace”
That’s Everton that.
The accounts show the legacy of the past, but they show the potential of the future under Moshiri, and that future is bright – very good times ahead.