Everton take a £14M loan

[Matt Damon]

Just be grateful we have Elstone in charge and not Damon, if his "maths" were saying coleman was gonna play yesterday then we'd probably take out a £14 million loan and end up paying back £41 million with him in charge.

Nothing wrong with what Daveks saying in this thread, he's just not sugercoating anything and making out its all sweetness and light.

Like I said. Moyes bowled a googly on Coleman and I missed it!

But the difference is my illiterate and innumerate friend when it comes to the accounts - it's all there. And the maths speak for themselves.

As my good friend Neiler just showed.

You can continue the Daveking all you want. We all know this "loan" is really just ensuring the club had access to that foreign tv money now.

This summer ... and ensuring our players were tied down to new contracts.

 

[davek]

But why was the securlisation deal taken out? to combat the inherited debt by the disgracefull Johnson regeime which left us, without which the club would have almost folded, TBH inherited a club with an over 90% wages - turnover ratio, on top of the 25 mill debt - so credit where its due they took on all the clubs debts.

The debt level was what Kenwright, Gregg, Abercromby and Woods knew it was before they bought the club through TBH. If they had zero to offer us apart from the Bear Stearns route Leeds United trod, securing a crippling loan against all future gate receipts, then perhaps they should have left the job to someone else? And someone in time would have. Them buying Everton has led to two successive regimes of zero investment as they've fannied around with one stadium project after another for the past decade.

Fast forward 8 years and the current board have adedd less debt over all then the entire Johnson regeime, have increased turnover by 200% and invested that money back into what plays in front of us each weekend - surely that is evident for all to see in comparison.

Incredible analysis. It's as though you dont allow for the massive increases in tv revenue that fell into their laps and allowed them to sit on their hands whilst revenue went up....hold on, you dont.

The securlisation deal has always been a milestone around our neck, but it was a solution for an inherted problem. In the context of how the buissness has grown - it was the right move at the time (despite my reservations) without which we prob would have folded, lets not forgot what a circus Johnson made of the club and we have and are still paying the price.

One of the main reasons Kenwright took the £30m loan was to pay for a new training ground. They did that and then sold it on, and now lease it back. Whither that money?

The club pay 4 mill a year in intrest repayments, which as many said about the projected profits at a certain other stadium - is a miniscule amount that wont make any real diffrence.

Yeah, running up a bill of £68m to creditors on a £30m deal is chicken feed. Just add that to the money and interest owned on all the club's other mortgages and forget about it. It's only the debt of a small African nation. Miniscule.

Devil's always in the detail.

 

[EFCTim Cahill]

Damn, when I read the title of this I thought we realised we had problems and took out a loan to buy Donovan

 

[BlueTak]

Damn, when I read the title of this I thought we realised we had problems and took out a loan to buy Donovan

If we took out this loan to buy Donovan, he's more overpriced than I first thought!

 

[Seamus Colemole]

Like I said. Moyes bowled a googly on Coleman and I missed it!

But the difference is my illiterate and innumerate friend when it comes to the accounts - it's all there. And the maths speak for themselves.

As my good friend Neiler just showed.

You can continue the Daveking all you want. We all know this "loan" is really just ensuring the club had access to that foreign tv money now.

This summer ... and ensuring our players were tied down to new contracts.

Googly my arse, you just refused to see the obvious and continued to ignore all previous history and stuck stubbornly to your view, making sure everyone and their cat knew how right you were. Except you weren't.

Maybe we could call that "Damoning".

In this case, that of a £14million loan now to be paid back with future TV money, no problem. Its the deeper financial issues which Davek is raising.

 

[Neiler]

The debt level was what Kenwright, Gregg, Abercromby and Woods knew it was before they bought the club through TBH. If they had zero to offer us apart from the Bear Stearns route Leeds United trod, securing a crippling loan against all future gate receipts, then perhaps they should have left the job to someone else? And someone in time would have. Them buying Everton has led to two successive regimes of zero investment as they've fannied around with one stadium project after another for the past decade.

I think youve failed the if you know your history test here mate, as i remember it (and most seem to forget) these men took on a massive risk, risked millions of their own money in buying shares on a club on the brink of extinction and turmoil. How quickly people are to forget the massive mess we were in, living from game to game never knowing wheather a player would need to be sold to pay wages and debt. You know i think if a modern day Peter Johnson turned up with all the speil he spouted back in 90's you would welcome him with open arms - lets face it thats all you have really in temrs of strategy - a billionaire - real world stuff though it aint going to happen.

Incredible analysis. It's as though you dont allow for the massive increases in tv revenue that fell into their laps and allowed them to sit on their hands whilst revenue went up....hold on, you dont.

Ah this old chestnet, your right send all the TV money back and then lets see how the club compeates against all the teams who dont receive Tv money - hang on!

One of the main reasons Kenwright took the £30m loan was to pay for a new training ground. They did that and then sold it on, and now lease it back. Whither that money?

Not as i remember it, Finch Farm wasnt even planned untill after Moyes became manager - i think you have your dates all wrong here, as i remember it we need equity to play the clubs most immediate creditors and provide essential cashflow and buy some fixed assets that we're in Johnsons name personally that werent part of the share deal, it also enabled us to negotiate an overdraft facility with Barclays which i beleive was close to 5mill pounds.


Yeah, running up a bill of £68m to creditors on a £30m deal is chicken feed. Just add that to the money and interest owned on all the club's other mortgages and forget about it. It's only the debt of a small African nation. Miniscule.

Devil's always in the detail.

Your wrong on this as well mate, there are differing loans, dont apply the intrest payments i gave to term of the securlisation deal, in fact this loan now with investec is nothing new, we have done something similar prob every season since TV became relevent, in fact you will be surprised to know that almost all Prem League clubs do something different as part of the prize and TV revenue is staggered throughout the year. I think Matt made the pint earliar. We also have another loan with Barclays im sure as well, all on different terms so your 68 mill figure is - i dont know - wrong!

 

[Bruce Wayne]

These deeper financial issues. What exactly can be done about that? I see a few options.

1) We improve our commercial operations, and slowly build up our revenue in various areas. We're building the new thing but there are lots of other areas we can improve on. Alas this will take time and won't bring in vast sums.

2) Get a new ground. Been round that road a few times. Could bring in larger sums but not in the short-term whilst its built, and as Arsenal show, the build has to be paid for.

3) Some kind of rights issue. Not entirely sure why this hasn't happened. Might raise a few tens of millions.

4) Mr Sugar Daddy buys us and throws petrodollars at Carlos Loadsamoney type players.

I suspect they're similar options being explored by practically every PL club.

 

[Neiler]

These deeper financial issues. What exactly can be done about that? I see a few options.

1) We improve our commercial operations, and slowly build up our revenue in various areas. We're building the new thing but there are lots of other areas we can improve on. Alas this will take time and won't bring in vast sums.

2) Get a new ground. Been round that road a few times. Could bring in larger sums but not in the short-term whilst its built, and as Arsenal show, the build has to be paid for.

3) Some kind of rights issue. Not entirely sure why this hasn't happened. Might raise a few tens of millions.

4) Mr Sugar Daddy buys us and throws petrodollars at Carlos Loadsamoney type players.

I suspect they're similar options being explored by practically every PL club.

As always the voice reason, indeed Bruce we're in a much different market place now then if we had addressed these issues 10/15 years ago.

A new ground is vital really its the one factor that will dictate the future success of the club and gaurentee our future, the clubs merchandiseing/marketing etc seems to be creeping up - but has a huge way to go - vitaly i think this year we are negotiating a new deal for sponsorship Chang??? We should be looking for amuch bigger deal here, i was massively unhappy with the last two in comparrison with other clubs. It will be intresting to see the books this year to see what impact the kitbag deal has had, or at least the detail of the deal. Similarly the jury is still out on the new new centre at Goodison - hopefully it will effect the bottom line positively.

Persoanly i think there hasnt been a rights issue, beecause the current board are willing to sell presently and are looking for the best return on their investment.

 

[HirsuteBlue]

These deeper financial issues. What exactly can be done about that? I see a few options.

1) We improve our commercial operations, and slowly build up our revenue in various areas. We're building the new thing but there are lots of other areas we can improve on. Alas this will take time and won't bring in vast sums.

2) Get a new ground. Been round that road a few times. Could bring in larger sums but not in the short-term whilst its built, and as Arsenal show, the build has to be paid for.

3) Some kind of rights issue. Not entirely sure why this hasn't happened. Might raise a few tens of millions.

4) Mr Sugar Daddy buys us and throws petrodollars at Carlos Loadsamoney type players.

I suspect they're similar options being explored by practically every PL club.

1. Corporate is the biggest and quickest step forward that can be taken, but it has to be the right kind of corporate offer, not just a block of seats and a tent.
2. Redevelopment appears to be the logical step, but the foundations needed to go in years ago, both in terms of the concrete but also agreements with the council over the school, picking up houses when marketted behind the Bullens, and getting plans and permissions sorted so an incrimental year on year stadium advancement policy was managable and deliverable.
3. More people with rights means more votes, more discontent and more p!ss taking with the rules like what happened with the emergency AGM coo plots.
4. Unless someone is so fabulously wealthy so as to be able to write millions off for fun, there is no point competing against some of the most wealthy people in the world, because if you cannot compete financially eventually that is the method by which your opposition will wear you down and exhaust you.

The position Everton are in is a bad one, it is not something that happened overnight, nor at the dawn of the Kenwright era. Mistakes, bad luck and gross mismanagement over 20 years or so is what has built with interest into a behemoth that cripples us.

 

[Bruce Wayne]

I'm just saying that with a few exceptions nearly every team is in a similar financial position to ourselves. Man Utd make a lot of money, but have the Glazers debt to deal with. Arsenal likewise but have the mortgage on the stadium. Spurs do well financially.

After that it's a pretty dire situation for the Premier League. This is my point. Liverpool for instance have a pretty high turnover, but such is football these days that the vast bulk of that goes straight to the players. If we earn more as a club, the players earn more.

People say that BK hasn't backed Moyes because we haven't signed a lot of players, but most of the first team squad will be on a few million a year in wages. It isn't as obvious as transfer fees but wages remain the single biggest cost of any football club.

Think about it for a second. Lets say we sign some superstar for £15million. He becomes our top earner on 80k a week, so roughly 4million a year. So that's nearly 20million we'd need right away just for one player. Then you have the other stars. Did you know that in a study of Harvard students it was found that they would rather be poor, if they were richer than the others, than rich if they were the poorest of the group? So Billy Big Balls comes in on 80k and the other stars will want a hike as well. Half a dozen stars on new deals could add 100k a week to our wages, or 5m to the wage bill. So now we're looking at more like 25million, just through signing one star who might get homesick and feck off after a few months, or have some big Geordie lump stamp on his leg and put him in the treatment room for a year. When you have no money, that's a big old gamble to take.

 

[HirsuteBlue]

Agreed, then you get the types who hit the bar morning noon and night. VDM.
The types that use agents to engineer them out, for more. Gosling.
The types that take the p!ss. Radzinski.
The types not up to snuff. S.Davies.
Bad discipline. Ferguson and Materazzi.
players messed around by the management. M.Ball.

If fifa or the FA were to announce that players could not be transferred before they were 23 that might put pressure on clubs to properly develop youth sides and find the best players out there. Instead of the buy 'any youth prospect' free for all so long as you have billions that is the current situation.

 

[davek]

Your wrong on this as well mate, there are differing loans, dont apply the intrest payments i gave to term of the securlisation deal, in fact this loan now with investec is nothing new, we have done something similar prob every season since TV became relevent, in fact you will be surprised to know that almost all Prem League clubs do something different as part of the prize and TV revenue is staggered throughout the year. I think Matt made the pint earliar. We also have another loan with Barclays im sure as well, all on different terms so your 68 mill figure is - i dont know - wrong!

• The heroes who took over from Johnson: how much money did they a) invest?; b ) how much have they lost? Answers: a) **** all; b ) their share value - bought at what? £850 per share when the club was valued at £30M - will have rocketted. The big thing that Kenwright was able to achieve over Johnson was to manage expectations much better. That's been his achievement: selling the dumbing down.
• You have no answer to the 'revenue' issue so I'll leave it there. Suffice to say you're pissing into a gale force wind trying to portray it's increase under Kenwright's tiime 'in charge' as the workings of the boards entrepreneurial endeavour.
• Finch Farm: I'm not sure what point you're trying to make here re Moyes becoming manager?! Regardless of that, it was a key selling point of the securitization deal to shareholders that this new facility be built with the cash...and it was...and then sold. Again, you have no answer, so I'll leave it there.
• The £68M figure is 'wrong'? How so? I think you'll find the debt is ongoing and we do have to pay back the £30m loan and we do have to pay the £38m interest on it until 2027.

Apart from that we're in agreement.

 

[TX Bill]

The banks know that they have first dibs on the tv monies that are guaranteed to roll in. Not really a favourable commentary on the particular relationship they have with EFC as a business really is it?

As for your previous point about this being a 'non-story': that's a remarkable conclusion to reach. I'd have thought at the very least it underline how fragile a financial house of cards Everton FC continues to be. We're running to stand still when the club takes on more debt to keep, essentially, the same group of players.

Spin it all you want, them's the fachts - as you like to say.

Banks use all sorts of collateral on a regular basis. It's how much of the banking system works. Future TV revenues are one such source of collateral. It isn't some sort of nefarious set up.

Are you going to say then by that logic that all banks who use collateral to back loans have a poor relationship with the borrower?

 

[njligernj]

We always tend to talk about a new owner who would build a new stadium and pump tens (if not hundreds) of millions into new players/contracts.

It seems to me if we had an owner who had enough money that he could give the club a 14 million pound interest-free loan for a year we'd be quite a bit better off. It all adds up; didn't we want to sign a player (for about a million) but couldn't because we didn't have the cash? Saving the interest on loans like this adds up pretty quickly. We wouldn't be Man City but it'd be a little less desperate. Is that kind of owner too much to ask? *


* (Yes ... the answer is yes).

 

[davek]

Banks use all sorts of collateral on a regular basis. It's how much of the banking system works. Future TV revenues are one such source of collateral. It isn't some sort of nefarious set up.

Are you going to say then by that logic that all banks who use collateral to back loans have a poor relationship with the borrower?

No. I was making the particular point - contra the view of Mr Matt Damon - that the banks Everton are dealing with see only that the main stream of revenue is secure (we're unlikely to take the drop into the Championship) and are happy to lend on that basis...that it's not the banks endorsement of the business per se.