£37.2m net transfer income for last 4 years

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MoutsGoat said:
Well the accounts will be out in December, I look forward to seeing at least 20m worth of debt gone.

Bet im fairly sure SunTan will say we bought some new Lawnmowers or something.
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Cost of grass went up 2 million % - Olympic demand made grass scarce this year.

Other Operating Costs 2011-12: £34M.

What a pity. The debt would have come down this time around.

*shakes fist at Sebastian Coe*
 

Neiler said:
FFS, Gibbo!

Loan fees lid, Donovan alone was allegedy 3mill - but i take your point - we are badly in debt like.

I would also say taht the good people at transfermarket.com may have Jarg figures here.
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£3m FOR A TWO MONTH LOAN. ARE YOU SERIOUSI DON'T BELIEVE IT
 
Here is just an example.

2011/12 +£17.2m (Arteta, Bily, Beckford, Vaughan, Yakubu out

Arteta £9 million (£1 million went to Sociadad)
Billy £2 million down (rest is over his contract)
Beckford £2 Million down ( rest stagerd )
Vaughan £1 Mill down ( rest stagerd)
Yak £1 million

So that £17.2 is now £15 Million. But the you have to pay these players off, especially the one's that dont ask for transfer, which im sure was all of them. Now the amount for that is very specualtive, but it certainly reduces the now £15 million figure.

Also, im quite sure Billy's original £9 Million fee needed, or a big part of that needs paying off, so that money needs to come from somewere.

All of a sudden the £17.2 million that season seems a distant memory.

So Im sure the same or similar happens in other transfer windows.

Never quite that simple.
 
ToffeeDan said:
Given that we've effectively made a contribution to the SORGL (P&L) through sales of the best part of £100M from transfer activity in the past 8 years our wage bill, debt situation & earlier transfer amortisation costs must be so high & other income (after TV income) so low as to render the club helpless - the lack of profit lays bare the obvious decline in our financial situation.

(thankfully) This £100M is the net gain represented by the dealings on sales that the club has made. Effectively all transfers in are met from the ability to fund it - both in terms of being able to pay the selling club & also the ability to meet the obligation to write off that cost over the life of the first contract - so the important factors are selling before buying & generating enough profit (elsewhere) to afford the purchases - to be financially stable enough to afford the hit over 4-5 years to the P&L.

So I'll break this down for you. Since the summer of 2004 the approximate income from sales is in the region of £135M - the most significant sales in monetary terms being Rooney (£27M), Lescott (£24M - less a 25% sell-on agreement with Wolves), Rodwell £15M, Johnson £11M, Arteta £10M. Rooney's net cost was Nil, Lescott's around £5M, Rodwell Nil, Johnson £8.5M (less £2-3M written off) & Arteta Nil (all transfer fees were written off years ago). These sales have brought in "profit" on sales and funding for transfers in (as well as obviously meeting other obligations).

Purchases amounted to £110M+ so the net inflow in cash terms (if we ignore the agent fees or loan costs which are harder to evaluate) is around the £20M mark. We surely would have met these costs for agent fees as the buyer. So we can absolutely put £20M into the bank from trading (simple maths). Furthermore we can look at the write-off on purchases - clearly a highly expensive cost to the club but the overall transfer trading position the club has managed has been very healthy indeed - which begs the obvious question that the club's day to day trading position is extremely parlous without transfer activity - namely those debt costs, wage costs, agent fees, amortisation of contracts, plus a low (non TV) income etc. All this with the sale of Bellefield thrown into the mix.

I think it's also worth noting that, with the possible exception of Yakubu (and that was only a £1M+ loss on NBV) Everton have not recorded a major loss on sale of a player (compared to the NBV) in all of Moyes years. Where the figure received was nil (at the end of a contract say) or less than the figure paid it has still been within acceptable boundaries for the purpose of increasing the net value of the business - for example Billy was purchased for £9M & sold 3 years later for £6M - this actually represents a gain of £2.4M on the books (given that 3/5 of his transfer fee was written off). Furthermore with only about £30M's worth of transfer fees paid on the current squad (of those purchased in the past 5 years who would still be on their first contract at Everton - namely Fellaini, Heitinga, Gibson, Jelavic & the re-signed Pienaar) the present Amortisation costs must be in the region of only £6-7M (although again I cannot estimate with any accuracy the true cost of a transfer when the agent fees etc. are included so it might be a couple of million more).

So that's all food for thought when you consider our position &, without regard for the state of the playing squad, at least we can be grateful that we trade well in the transfer market to keep the club afloat. The secondary factor I would mention is that our policy of buying young(ish) players (Sylvain & Pienaar (this summer) are major exceptions to that rule) & developing youth has been key to our progress in the past decade.
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= boardoom failure.
 
Zatara said:
How can you say that because we have paid 3/5ths of a contract this is written off when selling a player ?

It does not represent a gain due to the fact that when we sell we are also receiving funds over the length of the players contract.
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Because that's how it works. We pay £9M for Billy & regardless of how we make the payments (either upfront or over a period of a few years) the cost of purchasing his contract is an asset on the books. If we were able to pay outright this would be represented by an increase of £9M in value & a decrease in bank for the cheques written out to pay for (something).

The asset will then depreciate (or amortise) over the life of use - like a 28 year-old footballer won't have (much) value at 33 (after a 5 year contract). Consequently the standard accounting treatment is to assume this. So, when you sell (the asset) after 3 years you are anticipating it is only worth 40% of what you paid for it - think of it like a car you run into the ground - fairly worthless after 5 years. So the GAAP (Generally Accepted Accounting Practice) says Billy was "worth" £3.6M after 3 years on our books. Therefore to receive £6M (whether immediately or over time) adds £6M to the value of the business. So, for the purposes of estimating the financial well being of Everton our transfer dealings have kept us afloat.
 

Bruce Wayne said:
I suspect that those headline figures are misleading. I mean many clubs stagger payments across a period of time, or pay chunks once certain criteria have been met. Agents also take a hefty chunk of any deals.

To get a true picture though we need to put up in parallel how the wage bill has changed in the same time. The annual reports are online so I'm sure someone with more inclination than I could do that?
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Wage bill

2005: 30.8m
2006: 37m
2007: 38.4m
2008: 44.5m
2009: 49.1m
2010: 54.3m
 

Walter Ego said:
@toffee dan

But is it a fact in accounting terms that footballers only depreciate in value?
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In accounting terms yes. Normal accounting principles accept that an asset won't increase in value. Young players (up to 25-27 years old) may well be the exception as they often are transferred for more than older ones. Naturally any youth team product will be seen as a profitable prospect (not just to Everton but to all the lower league sides who cash in on the up-and-coming players).

It's worth bearing that in mind when you "estimate" the value of our squad. Some might reason it to be around the £100M mark for the purpose of realising the assets worth on the transfer market (Fellaini, Baines, Jelavic, Jags, Heitinga worth around £60M for example) whereas, for the purposes of the business the Net Book Value of the squad at present is much nearer to £15-20M (Fellaini £5M, Heitinga £1-2M, Jelavic £4-5M, Pienaar £4.5M, Gibson £1M) with a bit more added to these numbers to account for the total cost of the transfer (agent fees etc.)

If we were to tabulate the cost of all the transfers in & out over a reasonable period we would see the £110M paid out since 2004 has been written down to this £15M - so a cost of around £95M - on the positive side we've realised £134M - so, right now, trading on players' contracts in the past 8 years has realised a net gain IRO £25M (it's £40M but remember we must anticipate the other £15M to be written off in the next few years)

Obviously I'm not in possession of other key data such as agent fees, PFA levies etc. but it's safe to say that we are at least trading well, which, as I said before, is just as well given the high cost of debt, high wage bill & (relatively) low non-Sky income the club generates.
 
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