The question is always: do you want them to pay down the debt, or do you want them to invest in the squad? They chose to invest in the squad this time around.
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Chang Elephant
Forum God
The question is then: what happened to the balance of the money accrued from net sales (and significantly increased TV income), that was not used to pay down the debt?
The short term debt (bank overdraft, Vibrac loan) is about the timing of cash flows. I don't know how the TV money is paid, but I doubt very much the clubs get 60 million every August 1st. So to pay the bills, they take out short term borrowing based on future cash inflows (which is what all lending is based on anyway).
Chang Elephant
Forum God
Assuming for whatever unusual reason the TV income is irrelevant to meeting bills/paying down debt, what's the position with the net income we just had in that transfer window ?
The first thing Fulhams new owner did was pay the Vibrac loan off for his new club!
... I have to admit to not fully understanding company economics. I try and compare this to how you might run your own finances and this sounds like permanently living off a sub of next years salary.
But with Everton, it was two years of subs though.
I don't know that we have all of that information with transfer fees, loan fees, wages and the timing of payments.
In a way, yes. But Everton have less risk involved with projecting their revenues 1-2 years in advance than you or I do.
...I appreciate the demands (new players etc) but surely there should be a strategy to get us back in the black. We're supposed to have successful businessmen running our club.
I'm not defending their performance overall, they need to increase commercial revenue somehow. That's an easy thing to say, harder to do, but they certainly haven't shown much of an ability to do so over a fairly long period of time.
The short term financing is just that, it's just operating capital. It's not really worth discussing or dragging them through the mud for it. Many clubs have these sorts of arrangements.
..cheers for the explanation. Appreciate we aren't in the same global league as United or even our close neighbours, but they should commercially exploit every possible opportunity. When parents can't spend their hard earned buying Everton memorabilia for their kids it seems a waste.
Steve Wigan
Player Valuation: £35m
...you know, I wouldn't have known were to look for that...but you obviously did. Just asked a question of a financial expert. Is that you ?Toffeelover
Player Valuation: £80m
Off down to Wonga next week our Bill.
when.
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