Farhad Moshiri

[hibbo'sclass]

That's a good point as far as the comparison goes. Though I do feel like we could be making more money than the 3 million flat from Kitbag with retail deals despite not having the global brand awareness of the others. I honestly don't understand how Spurs became fashionable over in North America, I put it down to the timing of when they snagged their 4th-placed finish being a period of massive growth for US-TV exposure.

I may be wrong, but I thought that Kitbag is 3m flat + a royalty payment, but even assuming a 20% net profit, that would give a turnover figure of over 15mil, so an extra 12 mil.
Sodexo, from memory is 950k so how do you reverse engineer that? If you assume a not unreasonable return of 20% increases turnover by 3.8 mil.
I am not defending the club's past ineptitude, but just trying to point out that the figures aren't comparative in certain areas.
Love to see the club take it back in-house and sort things out, but let's realise how much the turnover would have to increase to make the guaranteed profits.
Just saying.

 

[blueblue]

Very good post mate, I agree entirely - every aspect of the club's revenue raising operations need wholesale review and change.

That requires change at the top.

I think that we have a chicken and egg situation here. Commercial success follows football success or football success after or with commercial success.

I think Moshiri has already decided that the club must be built on the success of the team. I think that is why the decision to let RM go was made early in his time at Everton, that is why he has gone for Mourinho and would dig deep financially to get him and that is why there will be a big transfer kitty pot.

That is also why you will not see Everton managers get as long to put a team together or get as long to get through a sticky patch as they did in the past.

 

[Efcjake]

I may be wrong, but I thought that Kitbag is 3m flat + a royalty payment, but even assuming a 20% net profit, that would give a turnover figure of over 15mil, so an extra 12 mil.
Sodexo, from memory is 950k so how do you reverse engineer that? If you assume a not unreasonable return of 20% increases turnover by 3.8 mil.
I am not defending the club's past ineptitude, but just trying to point out that the figures aren't comparative in certain areas.
Love to see the club take it back in-house and sort things out, but let's realise how much the turnover would have to increase to make the guaranteed profits.
Just saying.

I'm trying to determine how possible it would be for Everton to have a retail turnover of 15mil to produce a profit of 3 million but that Kitbag deal really muddys the waters when trying to look at the figures. Since it is pure profit and we don't actually record the turnover as anything other than the 3 million turnover/profit from the deal it is really making it hard for me to determine how feasible it is.

The last definitive figure I can find solely for retail is from 2004 and that was about 5.4 million for retail/merchandise turnover. I suspect that with 12 years of brand growth we will have surpassed that figure greatly, but I'm unsure if we have grown so much we have effectively tripled (To get to the 15 million you say is required given the assumption of 20% net profit) the revenue from retail operations as I cannot find an accurate figure solely for retail/merchandising revenue (only commercial revenue which includes other sources of revenue) any later than 2004.

I'm still looking though.


EDIT: I've found the 2007 accounts report now.

 

[Efcjake]

Ok from what I can determine in the 2007 accounts our retail/merchandising turnover was around 7 million pounds (based off of the note in the accounts regarding what the actual turnover would be if we didn't solely just account for the profit). That is an increased from the 5.4 million pound figure I found for 2004 which indicates that the retail/merchandising turnover grew by approximately 30% over those 3 years. So using that as a baseline, I'll assume the merchandising/retail turnover was growing approximately 10% each year.

If you follow with those assumptions and then extrapolate from the 2007 figure of 7 million I have suggested with the 10% growth each year that would put our turnover from merchandising and retail operations (All under Kitbag's accounts) to be approximately 16.5 million pounds. If we go ahead and apply your assumption of 20% net profit on that turnover figure we would be receiving just over 3 million pounds profit.



So I'm sure the question now is, would we make a greater profit by paying any potential penalty for ending our business relationship with Kitbag now instead of letting it run its course until 2009?


I don't know what penalties are included but the answer is probably no, we wouldn't make more money by jibbing them now and moving it in house.

If it was my choice right now I would spend the next three years making plans to return the merchandising operations back in house in an effort to mitigate the risks that will come with having to start all over from scratch when managing those operations within the club.

 

[hibbo'sclass]

Ok from what I can determine in the 2007 accounts our retail/merchandising turnover was around 7 million pounds (based off of the note in the accounts regarding what the actual turnover would be if we didn't solely just account for the profit). That is an increased from the 5.4 million pound figure I found for 2005 which indicates that the retail/merchandising turnover grew by approximately 30% over those 3 years. So using that as a baseline, I'll assume the merchandising/retail turnover was growing approximately 10% each year.

If you follow with those assumptions and then extrapolate from the 2007 figure of 7 million I have suggested with the 10% growth each year that would put our turnover from merchandising and retail operations (All under Kitbag's accounts) to be approximately 16.5 million pounds. If we go ahead and apply your assumption of 20% net profit on that turnover figure we would be receiving just over 3 million pounds profit.



So I'm sure the question now is, would we make a greater profit by paying any potential penalty for ending our business relationship with Kitbag now instead of letting it run its course until 2009?


I don't know what penalties are included but the answer is probably no, we wouldn't make more money by jibbing them now and moving it in house.

If it was my choice right now I would spend the next three years making plans to return the merchandising operations back in house in an effort to mitigate the risks that will come with having to start all over from scratch when managing those operations within the club.

To be honest, posted about the Kitbag coming back in-house and the likelihood of not covering the penalty clauses a while back and reached the same conclusion as yourself - all very well saying we can do this and make more money, but you have to make not only the guaranteed profit but the potential penalties on top.

 

[Jamiednm]

Maybe we should stop thinking of Everton in terms of our recent, trophy-less history and even our glorious long-term history. Moshiri certainly won't be thinking like that. He has invested in to a project, not a personally-motivated desire to return 'his beloved' Everton to the glory days. Think more like a company with 100s of millions of liquid capital and a medium to long term business plan - that's what we have, not this limiting 'big club, small club' nonsense. If Moshiri wants the best to achieve his business goals, he'll go after Mourinho and pay accordingly. If his team are up to it, they'll be able to sell it to José.

Top, world-proven execs turn up at well-funded minnow (but aggressive) start ups all the time, why should we view this any differently?

We just don't know the extent of Moshiris ambition. For all we know, he could be a right shark who doesn't want to piss about with unproven managers, but wants to get right in there.

 

[brieverton]

Maybe we should stop thinking of Everton in terms of our recent, trophy-less history and even our glorious long-term history. Moshiri certainly won't be thinking like that. He has invested in to a project, not a personally-motivated desire to return 'his beloved' Everton to the glory days. Think more like a company with 100s of millions of liquid capital and a medium to long term business plan - that's what we have, not this limiting 'big club, small club' nonsense. If Moshiri wants the best to achieve his business goals, he'll go after Mourinho and pay accordingly. If his team are up to it, they'll be able to sell it to José.

Top, world-proven execs turn up at well-funded minnow (but aggressive) start ups all the time, why should we view this any differently?

We just don't know the extent of Moshiris ambition. For all we know, he could be a right shark who doesn't want to piss about with unproven managers, but wants to get right in there.

Fair point that. He has not had to endure a generation of mediocrity which has blinded many thousands, hundreds of thousands of Evertonians from expecting the best.

 

[Efcjake]

To be honest, posted about the Kitbag coming back in-house and the likelihood of not covering the penalty clauses a while back and reached the same conclusion as yourself - all very well saying we can do this and make more money, but you have to make not only the guaranteed profit but the potential penalties on top.

This is all based upon a lot of assumptions though. Given the growth of the broadcasting revenue and the foreign market penetration it grows it might very well be likely that merchandising operations have grown quicker than the 10% annual growth figure I was able to assume based off of the pre-JJB and Kitbag outsourcing deals.

Looking at the pre-2009 figures does make me scratch my head a bit when thinking about how Kitbag managed to make a profit on top of the annual 3 million they've paid us each year since then.


Further, when I look at the 2010 accounts reflecting the first year of the Kitbag deal I notice a couple of things. Firstly, the note that appears to explain the reduction in turnover to reflect the profit income from the outsourcing deal with JJB in 2007 does not appear in the 2010 accounts which makes comparison very hard and secondly it appears they moved the merchandising turnover amounts into the sponsorship, advertising, and merchandising account when it was previously recorded with catering in a separate account. Another thing is that, from what I can guess right now, the outsourcing deal we had previous to kitbag with JJB was only bringing between 500,000-750,000 pounds a year (hard to know for sure since it is coupled with the catering in the 2007 accounts, but in the 2010 accounts catering is separate as was given as 900,000 pounds approximately and that had grown by 100,000 the year before so I'm assuming that in 2007 it was around 5-600,000 pounds of revenue and the merchandising outsourcing deal made up the rest) and then Kitbag blew it out of the water with 3 million pounds a year.

 

[hibbo'sclass]

This is all based upon a lot of assumptions though. Given the growth of the broadcasting revenue and the foreign market penetration it grows it might very well be likely that merchandising operations have grown quicker than the 10% annual growth figure I was able to assume based off of the pre-JJB and Kitbag outsourcing deals.

Looking at the pre-2009 figures does make me scratch my head a bit when thinking about how Kitbag managed to make a profit on top of the annual 3 million they've paid us each year since then.


Further, when I look at the 2010 accounts reflecting the first year of the Kitbag deal I notice a couple of things. Firstly, the note that appears to explain the reduction in turnover to reflect the profit income from the outsourcing deal with JJB in 2007 does not appear in the 2010 accounts which makes comparison very hard and secondly it appears they moved the merchandising turnover amounts into the sponsorship, advertising, and merchandising account when it was previously recorded with catering in a separate account. Another thing is that, from what I can guess right now, the outsourcing deal we had previous to kitbag with JJB was only bringing between 500,000-750,000 pounds a year (hard to know for sure since it is coupled with the catering in the 2007 accounts, but in the 2010 accounts catering is separate as was given as 900,000 pounds approximately and that had grown by 100,000 the year before so I'm assuming that in 2007 it was around 5-600,000 pounds of revenue and the merchandising outsourcing deal made up the rest) and then Kitbag blew it out of the water with 3 million pounds a year.

I'll hold my hands up - my figures are wrong and I should know better.
Look at 2015 accounts and the additional turnover from outsourced operations would have been 8.2mil (note 2).
Interestingly the figures posted by esk don't agree to the accounts - Broadcast is 81.69 mil, Gate receipts 17.904 mil Sponsorship etc 10.365 mil and other commercial activities 15.613 mil totalling 125.572 mil.
Everton will therefore cough to 133.772mil turnover after the above adjustment.
Sorted - hopefully

 

[Efcjake]

I'll hold my hands up - my figures are wrong and I should know better.
Look at 2015 accounts and the additional turnover from outsourced operations would have been 8.2mil (note 2).
Interestingly the figures posted by esk don't agree to the accounts - Broadcast is 81.69 mil, Gate receipts 17.904 mil Sponsorship etc 10.365 mil and other commercial activities 15.613 mil totalling 125.572 mil.
Everton will therefore cough to 133.772mil turnover after the above adjustment.
Sorted - hopefully

Which of your figures are wrong?


I can see that Esk's are different from what has been reported in the accounts.


Why is this note about unrecorded turnover due to outsourcing back in the accounts report and why was it left off of the 2010-2014 reports? I don't understand why they would leave that information out.

 

[The Esk]

I'll hold my hands up - my figures are wrong and I should know better.
Look at 2015 accounts and the additional turnover from outsourced operations would have been 8.2mil (note 2).
Interestingly the figures posted by esk don't agree to the accounts - Broadcast is 81.69 mil, Gate receipts 17.904 mil Sponsorship etc 10.365 mil and other commercial activities 15.613 mil totalling 125.572 mil.
Everton will therefore cough to 133.772mil turnover after the above adjustment.
Sorted - hopefully

My source was SwissRamble - he did explain once why his data was different I will try and find it.

Going back to strategy, we need to unwind kitbag now regardless of the cost. This is not about short term profitability, it is about growing a merchandising operation that reaches far beyond what Kitbag can offer. To leave it another 2 seasons gives our competitors a further 2 years to grow their businesses whilst we stand still.

I'll go into more detail when I have more time but we need to recruit a new CEO in the first instance and bring those businesses back in house so we can grow them from today not in 2 years time.

 

[hibbo'sclass]

Which of your figures are wrong?


I can see that Esk's are different from what has been reported in the accounts.


Why is this note about unrecorded turnover due to outsourcing back in the accounts report and why was it left off of the 2010 report? I don't understand why they would leave that information out.

All the assumptions based on 20% net profit are wrong because of the contents of that note.

It's not unrecorded turnover as such,it's merely showing what the increase in turnover would be in the club's estimation and in accordance with their reporting standards if the relevant outsourced activities were in-house. Wouldn't even attempt to guess how much of the 8.2mil is attributable to which activity.


Only restated for 2014 and 2015 I think.

 

[bizzaro]

My source was SwissRamble - he did explain once why his data was different I will try and find it.

Going back to strategy, we need to unwind kitbag now regardless of the cost. This is not about short term profitability, it is about growing a merchandising operation that reaches far beyond what Kitbag can offer. To leave it another 2 seasons gives our competitors a further 2 years to grow their businesses whilst we stand still.

I'll go into more detail when I have more time but we need to recruit a new CEO in the first instance and bring those businesses back in house so we can grow them from today not in 2 years time.

I would advocate and support this.

The market has moved on already.


Robert Elstone is standing still then trying to pull the wool over people's eyes saying 'Everton cannot be compared to other clubs (sic)'

What Robert fails to realise. He's talking to people with more intelligence than him. Who can see through that type of argument.

If Robert is reading this I'd say. You better pull your finger out Robert. Or you will be following Roberto Martinez out of the door before too long.

 

[Goat]

My source was SwissRamble - he did explain once why his data was different I will try and find it.

Going back to strategy, we need to unwind kitbag now regardless of the cost. This is not about short term profitability, it is about growing a merchandising operation that reaches far beyond what Kitbag can offer. To leave it another 2 seasons gives our competitors a further 2 years to grow their businesses whilst we stand still.

I'll go into more detail when I have more time but we need to recruit a new CEO in the first instance and bring those businesses back in house so we can grow them from today not in 2 years time.

I pity the man whos job it is to unravel the "mess" we are currently in.

I understand the reasons for all the deals, its all about guaranteed income and budget planning, something I know all to much about, on a much smaller scale. But my God, some of the deals are long term and we have given it away.

Sadly I feel our "current" bargaining position isnt great, which is why getting somebody like Jose, even if we have to pay him 15m a season is vital to how we grow the club off the pitch, but to return to my first point, LOL at whos job it is to sort it all out, I really do pity them, but I suppose bigger external budgets all round will make the job easier.

As youve said, this Summer is going to be massive, off and on the pitch, just wish I had a time machine to go forward to September 1st!

 

[bizzaro]

I pity the man whos job it is to unravel the "mess" we are currently in.

I understand the reasons for all the deals, its all about guaranteed income and budget planning, something I know all to much about, on a much smaller scale. But my God, some of the deals are long term and we have given it away.

Sadly I feel our "current" bargaining position isnt great, which is why getting somebody like Jose, even if we have to pay him 15m a season is vital to how we grow the club off the pitch, but to return to my first point, LOL at whos job it is to sort it all out, I really do pity them, but I suppose bigger external budgets all round will make the job easier.

As youve said, this Summer is going to be massive, off and on the pitch, just wish I had a time machine to go forward to September 1st!

A business man - a proper business man.

Will attack the weaknesses and develop the strengths.

@The Esk has rightly identified that the weaknesses are our commercial revenues are comparatively (for our club to other clubs) - too small and under performing.


Esk is then attacking the weaknesses (Kitbag) and turning it into a strength.


Its really not rocket science when you have an experienced business man in the door and actually getting things done. With the resources to go with it.

The problem EFC has historically had. People who talk the talk and thats about it.