Changing Perceptions

[The Esk]

So if RK/FM talk with and convince the likes of Rom and Stones that the future is rosy and staying is in everyone's collective interests, then the commercial/sponsorship/marketing departments had better get their act in gear and quickly, and match day revenue streams need to increase too somehow ?

Correct, plus reduce the amount of deadwood which we appear to have started to do.

 

[The Esk]

Arent wages classex separately to transfers so if we sold lukaku we would just add his annual wage to the £7mil?

no - profits from player sales are included in the increase in revenues.

 

[Axlswhk]

For the next three years, clubs cannot increase their player wage bills by more than £7m compared to the previous year unless they can demonstrate that any excess is due to individual club revenue sources (Short term cost control rules).

So for Everton any excess in player wages above £7 million will have to come out of an increase in commercial revenues, sponsorship, matchday revenues or profits from player sales.

I mentioned a while ago that this means we will likely sell at least one player at a significant profit this summer to fund increase in wages.

So for example if we sell Lukaku for £60 million (for arguments sake) that would produce a profit of £44m (£60m - {£26.52 m (cost)- £10.6 m (depreciation)})

If we sold Stones for £50 million that would produce a profit of £48.4 m (£50m - {£2.63m - £1 m approx depreciation)

We could continue this process but the hopes would be that other revenues continue to increase, however player trading profits are the enabler for massive increases in wages.

Therefore this summer assuming we sell either Lukaku or Stones we can increase our wage bill this season by £50 - 55 million based on achieving the above player sale profit.

In addition to the above the current Premier League Profit and Sustainability rules are still in place - these rules sit alongside the Short Term Cost Control rules and ensure clubs don't lose more than £105m over three rolling seasons.

However this is not going to be an issue because of the way player transfer costs are spread over the term of their contracts. The only real limit is our ability to fund, and that really is not going to be a problem going forward.

It's not that gloomy mate. Pienaar Osman hibbert Howard combine wages of 150 pr week will free up our restriction some what.

 

[The Esk]

Thanks. Very interesting. But for clarification, do you agree that the FFP rules do place limitations on spending, and that we cannot go out and buy anyone we want even if Moshiri had the capacity to so, which he doesn't?

It's a fairly meaningless limitation if you can generate player trading profits to be honest, and as I say we will not have a problem funding player transfers in the future.

It is the ability of BHH to raise funds rather than Moshiri that will allow this.

 

[Zatara]

no - profits from player sales are included in the increase in revenues.

I thought revenues and the wage bill increase allowance were separate ? So we get £7mil wage increase ability same as everyone else?

 

[The Esk]

It's not that gloomy mate. Pienaar Osman hibbert Howard combine wages of 150 pr week will free up our restriction some what.

yes, that should reduce our wage bill by say £7.5 million next season, plus there will be others leaving including Kone and Niasse I'd imagine.

 

[The Esk]

I thought revenues and the wage bill increase allowance were separate ? So we get £7mil wage increase ability same as everyone else?

over and above any increase in income. Income includes profit from player sales.

 

[roydo]

over and above any increase in income. Income includes profit from player sales.

Would be amazeballs if we make a profit on Kone or Niasse!

 

[evertonfootballclub]

yes, that should reduce our wage bill by say £7.5 million next season, plus there will be others leaving including Kone and Niasse I'd imagine.

 

[Dymak]

It's a fairly meaningless limitation if you can generate player trading profits to be honest, and as I say we will not have a problem funding player transfers in the future.

It is the ability of BHH to raise funds rather than Moshiri that will allow this.

This is good news, but even what you are saying is dependent on us selling our best players. We are in a strong position financially, but to say we can buy anyone we want is totally inaccurate.

 

[The Esk]

This is good news, but even what you are saying is dependent on us selling our best players. We are in a strong position financially, but to say we can buy anyone we want is totally inaccurate.

We probably need to sell one this summer principally for accounting purposes rather than funding purposes. I've never said we can buy anyone we want, but if there is someone we want funding will not be an issue.

 

[Dymak]

We probably need to sell one this summer principally for accounting purposes rather than funding purposes. I've never said we can buy anyone we want, but if there is someone we want funding will not be an issue.

Other people are saying it though. And come on, there is a bracket of player we can target and we may now stand a chance of attracting a player in that bracket, but this is not the bracket of Messi, Bale and Pogba, we could not buy these type of players.

In fact, I can't see us spending even 40 million on a player, which gets you less than half of some of these players.

 

[al23883]

We probably need to sell one this summer principally for accounting purposes rather than funding purposes. I've never said we can buy anyone we want, but if there is someone we want funding will not be an issue.

When do you expect us to start buying mate?

 

[Axlswhk]

We probably need to sell one this summer principally for accounting purposes rather than funding purposes. I've never said we can buy anyone we want, but if there is someone we want funding will not be an issue.

i doubt we need to sell for accounting purposes. There are many ways to sidestep financial FairPlay and selling your star player for that is in incredible amateur for someone you've said is aiming to bring us glory

 

[The Esk]

i doubt we need to sell for accounting purposes. There are many ways to sidestep financial FairPlay and selling your star player for that is in incredible amateur for someone you've said is aiming to bring us glory

I'm pretty sure we will keep Barkley, and one of Stones or Lukaku (most likely Stones).

I agree we have other options but if we retained all three we would be restrained in our ability to acquire new players unless we significantly increase our commercial or sponsorship revenues this year.

I am not sure whether we will see big increases in those revenue sources until financial year 2017/18 with Chang finishing their contract and the possibility of the old Kitbag deal being unwound.

The point is though we have a lot of headroom to acquire new players should Stones or Lukaku be sold this summer. I don't believe that is an amateurish approach given both have apparently expressed a desire to leave.

We have been in discussions with Lukaku's agent and I don't believe we will allow Stones to leave.