Everton FC - Finances

Toffeelover · September 3, 2015

I can summarise all those figures very simply. WE HAVE NO MONEY.

deipnosophist · September 3, 2015

the esk said:
Interesting figures @deipnosophist . I haven't had a huge amount of time but the figures and any revisions demonstrate how vulnerable the balance sheet is to higher than expected expenditure or lower revenues (nothing we didn't know before).

For example an annual increase of 10% in costs, and 10% in transfer budgets takes the club from being +£41 million in May 2019 to -£43 million (would actually be higher as I have not factored in borrowing costs)

What assumptions did you make about revenues?

Absolutely right, Everton's financial situation is very sensitive to variances in input assumptions/variables. I can understand Bill's fiscal conservatism having seen how the model depicts changing financial fortunes with changes to 'environment'.

Revenue assumptions?. Well obviously the TV money income is well prescribed (I assumed Everton getting between 7-11th for merit payment purposes).
2013/14 show other operating income as 32 mio.
I used :
2015 40 mio (extra gates via Europa and the prize money...but still possibly a little high by 3 mio or so...I will change that input)
2016 35mio
2017 35mio
2018 37mio
2019 38mio
If a conservative 33-35 mio is used the final cash position is

If I assume static/nil growth in revenue (outside Europe play), the cash position at End of May 2019 drops to around 25mio.
Bottom line :regardless of all the TV money hype, Everton needs to maintain fiscal prudence

The Esk · September 3, 2015

deipnosophist said:
Bottom line :regardless of all the TV money hype, Everton needs to maintain fiscal prudence

Or seek significant capital injection. Without additional capital our future is less certain under the new deal than it is currently.

4737carlin · September 4, 2015

the esk said:
Or seek significant capital injection. Without additional capital our future is less certain under the new deal than it is currently.

What worries me about that new money is all the clubs who we think are behind us, smaller than us, are going to be getting it, and if they are run well it will be a financial platform from which they can leave us behind. One thing being behind the "big 4" ( +Liverpool ), West Ham look to be spending and with the new ground...etc can maybe push on, the likes of Stoke, Southampton, Spurs, even Palace could push on and leave us behind.

The Esk · September 4, 2015

4737carlin said:
What worries me about that new money is all the clubs who we think are behind us, smaller than us, are going to be getting it, and if they are run well it will be a financial platform from which they can leave us behind. One thing being behind the "big 4" ( +Liverpool ), West Ham look to be spending and with the new ground...etc can maybe push on, the likes of Stoke, Southampton, Spurs, even Palace could push on and leave us behind.

Completely true and I am not trying to be alarmist in saying without investment it is a real possibility, not only because our competitors have capital to invest but also the broadcasting revenue distribution will favour even more the successful teams versus the not so successful.

Congen · September 4, 2015

the esk said:
Completely true and I am not trying to be alarmist in saying without investment it is a real possibility, not only because our competitors have capital to invest but also the broadcasting revenue distribution will favour even more the successful teams versus the not so successful.

Well it's helped us to tell Chelsea where to go when they wanted stones and will also help us in the future that we don't need to sell our big players

toffeejack · September 4, 2015

4737carlin said:
What worries me about that new money is all the clubs who we think are behind us, smaller than us, are going to be getting it, and if they are run well it will be a financial platform from which they can leave us behind. One thing being behind the "big 4" ( +Liverpool ), West Ham look to be spending and with the new ground...etc can maybe push on, the likes of Stoke, Southampton, Spurs, even Palace could push on and leave us behind.

definite possibility - but it could also be the thing which helps us finally break the top 4 barrier. we've been competing just below that line now for a good few years on pretty much a negative spend. a couple of shrewd signings to go with the crop of youngsters we seemingly have coming through and i just view it as an opportunity to make the next step. we were never going to do that plodding along with £5m being spent here and there, whilst all the other top 7 clubs were spending £50m+ a summer. us being able to spend £35m and them spending £80m works more in our favour i believe.

anyway, time will tell, i'd prefer to look on the possible positive side of things rather than possible negatives.

we look at our squad now and we have three sellable assets in stones, barkley and lukaku who could all be worth north of £50m. although those teams you mentioned could bridge the gap - they don't have nor can they yet attract players of that quality. Their improvement will also hopefully make the league even more competitive than it is, bridging the current gap between the top 7 and the rest.

cduff · September 4, 2015

Interesting article on Soccernet about the relative worth of EPL teams shirt and sponsorship rankings.
We rank 7th behind the "top 4" RS and Spurts. So, it would seem that our shirt & sponsorship deals (relative to the rest of the teams) is not as bad as many people make out. Having said that there is still a big gap between us and the top teams :-
http://espn.go.com/espn/feature/sto...ish-premier-league-most-valuable-kits-2015-16

bizzaro · September 4, 2015

Love this thread.

Even though this is my first post.

Like a proud father I am @the esk @davek

*wipes away tear*

bizzaro · September 4, 2015

4737carlin said:
What worries me about that new money is all the clubs who we think are behind us, smaller than us, are going to be getting it, and if they are run well it will be a financial platform from which they can leave us behind. One thing being behind the "big 4" ( +Liverpool ), West Ham look to be spending and with the new ground...etc can maybe push on, the likes of Stoke, Southampton, Spurs, even Palace could push on and leave us behind.

People waking up.

Me and @the esk differ on the stadium issue. Mainly revenue and capitalisation.

But we in general agree.

I see what Spurs (63k) and City (61k) and West Ham (55k) are doing and I am highly alarmed.

In the meantime Goodison's capacity is declining (39.5k)

deipnosophist · September 4, 2015

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deipnosophist · September 4, 2015

deipnosophist · September 4, 2015

degsy · September 4, 2015

deipnosophist said:
Absolutely right, Everton's financial situation is very sensitive to variances in input assumptions/variables. I can understand Bill's fiscal conservatism having seen how the model depicts changing financial fortunes with changes to 'environment'.

Revenue assumptions?. Well obviously the TV money income is well prescribed (I assumed Everton getting between 7-11th for merit payment purposes).
2013/14 show other operating income as 32 mio.
I used :
2015 40 mio (extra gates via Europa and the prize money...but still possibly a little high by 3 mio or so...I will change that input)
2016 35mio
2017 35mio
2018 37mio
2019 38mio
If a conservative 33-35 mio is used the final cash position is

If I assume static/nil growth in revenue (outside Europe play), the cash position at End of May 2019 drops to around 25mio.
Bottom line :regardless of all the TV money hype, Everton needs to maintain fiscal prudence

No worries there, those vibrac loans have it all covered.

yeah those ones

The ones that roll over each year, have horrendous early payback penalties, by present day standards massive Interest rates, that go to a company in the name of Earls kids.

V Virgin
I Isles
B Beth
R Robert
A and
C Cara

*throws in a few allegeds to cover backside

Which is all OK so long as we are in the Prem and they keep throwing money into the revolving door that is other operating expenses.

Thus it might be further inferred that we are one poor Manager, one Mike Walker if you will, or heaven forfend one Roberto Martinez according to some, away from disaster.

But, again with the 'A' word well to the fore, the Parachute payments will cover the those loans, so vibrac is on a win-win. ( see Reading )

deipnosophist · September 4, 2015

degsy said:
No worries there, those vibrac loans have it all covered.

yeah those ones

The ones that roll over each year, have horrendous early payback penalties, by present day standards massive Interest rates, that go to a company in the name of Earls kids.

V Virgin
I Isles
B Beth
R Robert
A and
C Cara

*throws in a few allegeds to cover backside

Which is all OK so long as we are in the Prem and they keep throwing money into the revolving door that is other operating expenses.

Thus it might be further inferred that we are one poor Manager, one Mike Walker if you will, or heaven forfend one Roberto Martinez according to some, away from disaster.

But, again with the 'A' word well to the fore, the Parachute payments will cover the those loans, so vibrac is on a win-win. ( see Reading )

The thing with the Vibrac loans is they provide for off-season liquidity. Everton receives a tranche of TV monies (from the previous financial years allotment) in the off-season but that does not cover operating expenses in that quarter plus transfer monies. The cash balances generated through the mega TV deal starting next season should see the requirement for bridging finance disappear after May 2018 (assuming op ex, and player transfer costs are kept to certain amounts).
But Everton remains very vulnerable to any reduction in TV monies after 2019