The Mail Bag
The Truth
Comments (35)
I'm a City analyst working in London, and a lifelong Evertonian so I?m pretty au fait with finances and financing. Hopefully i'll try to make the maths easy for sake of illustration. So, anyway, there are no Everton transfer targets. Why? Because Kenwright is trying desperately to sell the club and this is contingent only on the proposed ground move to Kirkby.
So here's the maths. Everton have sold a number of players since the middle of last season, two of whom have netted in the region of lets say £20M. The total saving to the club of the player sales is a further £10-15M in annual wages based on (making this simple) an average of £20k per week salaries for the 10 players (or so) that have left. That's roughly £30M taking the lower figure for salaries.
Looking at this link as a source, Everton earned a further £40M from TV and league placings in 2007-08. That makes up £70M or thereabouts which coincidentally is the deposit required by the club (again, roughly) to put their name on the Kirkby stadium IF, and this is the big 'if', the deal is given the go-ahead in November, post the Government review.
So, bearing that in mind, it would be likely that the club will then go on and make ONLY loan signings or free transfers at minimal cost. Enter Lars Jacobsen and the rumoured loan deal for SWP. Funny that? Not really...
So what about Moyes and the contract saga? Again this is part of the masterplan conjured up by ?Blue? Bill. My guess is that DM will hold back on his contract signing until next year, having been told of this plan by Kenwright himself, to see if it plays out. If we manage to stay in the Premier League he will then sign, if not, off he goes.
All very sad...
Nick Page, Posted 26/08/2008 at 18:47:37
Comments
Note: the following content is not moderated or vetted by the site owners at the time of submission. Comments are the responsibility of the poster. Disclaimer
I tempted to dismiss this post as utter shite as nobody knows ’The Truth’ but those within the Everton camp (who probably don’t know what they’re doing either - so how can you?!). The signs are not promising as you state, and MAYBE due to your hypothesis.
However I am inclined to believe we are saving all our pennies for the ’big one’ - Moutinho. A name that Bill has official spoken of. Anyway, I’ll wake up by 1 Sep.
However I am inclined to believe we are saving all our pennies for the ’big one’ - Moutinho. A name that Bill has official spoken of. Anyway, I’ll wake up by 1 Sep.
Nick
Your conclusion may be correct (as Jason says, we don’t know what the truth is) but to be honest your method is a bit bizarre.
You obtain a figure of £70m, using £20m for the 2 sales (fees were only McFadden £5m and Johnson £10.5m; we don’t know how much was upfront; a sizeable percentage of each went to their previous clubs; also less loyalty payments to the players), £10m on saved wages (10 players have left us who were good enough to earn 20k a week? Really? where do the pay rises for Cahill, Arteta, Osman and Lescott fit into that?).
So to be honest your obtaining of a £70m figure seems a bit forced. Then you conclude that this is the figure that the club needs for a deposit on a new stadium. Deposit? On what?
First of all, the club expects to fund the stadium mainly through debt, not through a cash asset. That’s public knowledge.
Secondly, what’s the deposit for? Who exactly are we paying in advance? Construction contracts are not fixed fee, pay in advance deals. Most of the fee is paid on handover. Why would everton need to have to pay the full amount in advance?
Thirdly, you conclude the money is spoken for and hence there can’t be any transfers. Most transfers these days are debt funded, and hence the cash in the bank isn’t really relevent. We didn’t have any cash for Yakubu last year either.
Fourth, you assume that the loan deal are free. Clearly, it won’t. There are his wages, and a loan fee to be paid to Chelsea. Thus, loaning SWP and taking on his huge wages would cost a similar amount to a £3m buy who would accept very low wages (say, a Guinean playing in Switzerland).
Fifth, you seems to assume there will be a decision in November of Kirkby. The hearing starts then, but it’s a huge central government decision. Somebody knows at present when the final decision will be made.
Sixth, you seem to assume that because the sky money of £40m came in, we now have cash of £40m in the bank. In reality, because the Sky TV money represents over 60% of Everton’s TOTAL income for the year, most of it goes to paying the players wages over the course of the year.
I could go on, but I think I’ve made my point. Nothing you’ve said is anything other than conjecture. Doesn’t mean you conclusion on transfers is wrong, but the method doesn’t stack up.
Your conclusion may be correct (as Jason says, we don’t know what the truth is) but to be honest your method is a bit bizarre.
You obtain a figure of £70m, using £20m for the 2 sales (fees were only McFadden £5m and Johnson £10.5m; we don’t know how much was upfront; a sizeable percentage of each went to their previous clubs; also less loyalty payments to the players), £10m on saved wages (10 players have left us who were good enough to earn 20k a week? Really? where do the pay rises for Cahill, Arteta, Osman and Lescott fit into that?).
So to be honest your obtaining of a £70m figure seems a bit forced. Then you conclude that this is the figure that the club needs for a deposit on a new stadium. Deposit? On what?
First of all, the club expects to fund the stadium mainly through debt, not through a cash asset. That’s public knowledge.
Secondly, what’s the deposit for? Who exactly are we paying in advance? Construction contracts are not fixed fee, pay in advance deals. Most of the fee is paid on handover. Why would everton need to have to pay the full amount in advance?
Thirdly, you conclude the money is spoken for and hence there can’t be any transfers. Most transfers these days are debt funded, and hence the cash in the bank isn’t really relevent. We didn’t have any cash for Yakubu last year either.
Fourth, you assume that the loan deal are free. Clearly, it won’t. There are his wages, and a loan fee to be paid to Chelsea. Thus, loaning SWP and taking on his huge wages would cost a similar amount to a £3m buy who would accept very low wages (say, a Guinean playing in Switzerland).
Fifth, you seems to assume there will be a decision in November of Kirkby. The hearing starts then, but it’s a huge central government decision. Somebody knows at present when the final decision will be made.
Sixth, you seem to assume that because the sky money of £40m came in, we now have cash of £40m in the bank. In reality, because the Sky TV money represents over 60% of Everton’s TOTAL income for the year, most of it goes to paying the players wages over the course of the year.
I could go on, but I think I’ve made my point. Nothing you’ve said is anything other than conjecture. Doesn’t mean you conclusion on transfers is wrong, but the method doesn’t stack up.
Nick,
I hope you don’t look after my portfolio with maths like that.
I hope you don’t look after my portfolio with maths like that.
Maybe the title of this post should be "Inconvenient Truth"........because to be honest Nick, as with Al Gore you have taken what appear to be facts and shaped them to suit your arguement.
When looked at in context I think Simon Skinner's explanation is closer to the Truth.
When looked at in context I think Simon Skinner's explanation is closer to the Truth.
I don’t think the numbers stack up here either. However, I do take the point about DK since Moyes has now come out and said that he doesn’t think the squad can "make it to January". Who do you think has asked him/them to do that? Certainly not us fans!
Simon ? I agree with much of what you say regarding finance, although I suspect Nick raises a point that may well be true i.e. Moyes may be denied finance because of the impending decision over DK.
Please see excerpt from the letter from the Government Office that is dealing with enquiry for DK
The inquiry will open on Tuesday 18 November 2008 at 10:00 and will be held at The Kirkby Suite, Norwich Way, Cherryfield Drive, Kirkby, L32 8XY. A
A pre-inquiry meeting will be held at the same venue on Friday 19 September 2008 at 11:00am.
No evidence about the case will be heard. The pre-inquiry meeting should help to ensure that the main inquiry runs smoothly and efficiently. It will also help everyone to concentrate on the main issues in dispute, saving time and expense for all concerned.
As someone who is Anti DK Let?s hope it?s not just a rubber stamp job! They will accept further evidence to put before the inspector before the 17th of September. If people are already aware of this, I apologise for boring you.
Please see excerpt from the letter from the Government Office that is dealing with enquiry for DK
The inquiry will open on Tuesday 18 November 2008 at 10:00 and will be held at The Kirkby Suite, Norwich Way, Cherryfield Drive, Kirkby, L32 8XY. A
A pre-inquiry meeting will be held at the same venue on Friday 19 September 2008 at 11:00am.
No evidence about the case will be heard. The pre-inquiry meeting should help to ensure that the main inquiry runs smoothly and efficiently. It will also help everyone to concentrate on the main issues in dispute, saving time and expense for all concerned.
As someone who is Anti DK Let?s hope it?s not just a rubber stamp job! They will accept further evidence to put before the inspector before the 17th of September. If people are already aware of this, I apologise for boring you.
Simon, excellent reply. EFC don?t need to pay upfront for the stadium that is completely ridiculous statement, Tesco fund the major build and I would expect part payments via a secured loan over a set period. I don?t believe for one minute you are a city annalist, unless maybe you advised the Northern Rock board to buy high and sell low then maybe you could be employable. Making predictions on assumptions based around no concrete fact or even fiscal equivalent other than a journalist report states to me your just trying to create a scare story, this article holds no substance at all and would be more in line to be posted on KEIOC as they tend to prefer this line of editing. I guess the reason why EFC has not secured any major signings is mainly due to the fact we can?t afford the wages and sadly it?s a painful reminder that we are miles away from the top payers in the league that?s why Mr. Moyes dithers all the time. We are only in this position because we lack hard cash, simple as. This fact has been with us since the late John Mores passed away, we are trying to play with the big boys but sadly we have everything on tic, it?s an investor we need and until he/she arrives then we can only hope we will stay near the top of the league. COYB
Stick to talking about activities on the pitch, because all this guess-work is bollocks. Nobody knows the true financial situation at the club, other than the board.
Simple maths: AJ £10 mill; Faddy £5 mill... 10+5 = 20 ??????????? What??
This is rubbish. Nick, you talk as though we started the summer with a completely balanced finance sheet. You also say the words, "my guess is" which doesn’t make me think that you really know the "truth".
A lot of the £40 million you mention for Sky has already been borrowed against in previous seasons for the purchase of Lescott, Baines and Yakubu. It would appear that this money has now only recently cleared so we have wiped out some of our debts for these players. This means we can start borrowing again hence why there are supposed to be expected signings this week. Jacobsen was signed because he was available not necessarily just because he was free.
I still don’t believe that Kenwright is desperately trying to sell either and Moyes certainly wouldn’t take part in this slightly far fetched plan.
A lot of the £40 million you mention for Sky has already been borrowed against in previous seasons for the purchase of Lescott, Baines and Yakubu. It would appear that this money has now only recently cleared so we have wiped out some of our debts for these players. This means we can start borrowing again hence why there are supposed to be expected signings this week. Jacobsen was signed because he was available not necessarily just because he was free.
I still don’t believe that Kenwright is desperately trying to sell either and Moyes certainly wouldn’t take part in this slightly far fetched plan.
This post is utter bunkum! Flawed maths, uninformed supposition and convenient conclusion. Our Chairman has said categorically that there is money available to sign players. I, for one, believe him. In spite of my spat with the Club?s PR boys, I continue to have total faith in Blue Bill and Davey. I KNOW THEY WILL NOT LET US DOWN!
Is it just me or has the layout been changed on this site? It doesn’t look as streamlined now, more clunky IMO.
I argued weeks ago that I thought any progress this season was written off by the club behind the scenes, as all hinges on Kirkby and a resulting new owner.
This is a commercial decision as they saw little benefit financially from finishing 5th or mid-table. The outlay to finish 5th would be large with little return for such investment.
And for those who say "what about if we had finished 4th ?" following investment. I reckon they thought it was too big a risk with Kirkby uncertain.
Beautiful game?
This is a commercial decision as they saw little benefit financially from finishing 5th or mid-table. The outlay to finish 5th would be large with little return for such investment.
And for those who say "what about if we had finished 4th ?" following investment. I reckon they thought it was too big a risk with Kirkby uncertain.
Beautiful game?
Let me echo Jeremy Benson’s reply. Based on their respective posts, I’d rather have Simon Skinner and not Nick Page managing my portfolio...
The Truth? Guwaff!
The Truth? Guwaff!
Utter Tosh, the most conceited post I have ever read?
Nick i worked in a bank for my work experience but i don?t claim to be any good with money. If this is true and you are a City analyst working in London, then can you please advise me where I can purchase a fake degree certificate as I am sure with basic maths skills I can carry out your job.
Nice try but the world of finance isn?t as black and white as you have implied.
Nice try but the world of finance isn?t as black and white as you have implied.
I don’t think the word rumour need necessarily come into it. It seems blatantly obvious that spending thus far was advanced on income received to date and that anything above that was underwritten by BK’s colleagues. As the stadium deal has fallen through (effectively, for sake of argument) then this is no longer an option. The income to date (AJ & Faddy = ~15m) has been needed to cover costs in the interim due to the lack of underwriters.
I think any deals now on a season long loan will then rely on next seasons Sky money to make them permanent if required.
I think we have to be realistic and that’s the situation we are faced with. The incoming cash mentioned above will probably be able to cover 12 months worth of limited stage payments of transfer deals involving foreign clubs as they’re less likely to want advance payments as Prem League.
I think any deals now on a season long loan will then rely on next seasons Sky money to make them permanent if required.
I think we have to be realistic and that’s the situation we are faced with. The incoming cash mentioned above will probably be able to cover 12 months worth of limited stage payments of transfer deals involving foreign clubs as they’re less likely to want advance payments as Prem League.
@Simon who says
?Secondly, what's the deposit for? Who exactly are we paying in advance? Construction contracts are not fixed fee, pay in advance deals. Most of the fee is paid on handover. Why would everton need to have to pay the full amount in advance??
Take it from someone who works in construction. ANY contractor will get a 10% Advance Payment up front on signing the Contract.
Before any contractor is found the ground has to be designed in detail and the architects, engineers and other consultants will want paying for their services BEFORE a spade goes into the ground.
?Secondly, what's the deposit for? Who exactly are we paying in advance? Construction contracts are not fixed fee, pay in advance deals. Most of the fee is paid on handover. Why would everton need to have to pay the full amount in advance??
Take it from someone who works in construction. ANY contractor will get a 10% Advance Payment up front on signing the Contract.
Before any contractor is found the ground has to be designed in detail and the architects, engineers and other consultants will want paying for their services BEFORE a spade goes into the ground.
Do you work for a whole year before receiving your salary? Of course not, and contractors don?t work for the whole construction period and only get paid on handover They get paid monthly according to the progress they make on the job and on competion they will have received 95% of the contract value.
Well then those of you defending Blue Bill can surely fuck off. As he stated there IS money to bring in good players. If that’s the case then there IS money to sign players straight up.
Well prove it Blue Bill. Sign someone good
Well prove it Blue Bill. Sign someone good
Nick by any chance did you work for Northern Rock????
So David Moyes has not yet signed a new contract and he may leave by the end of this season. On the other hand the transfer activity seems to be concentrated on loans such as the ones for Jacobsen, SWP etc, which will come to an end together with Moyes?s contract. Do you think that this just a coincidence or may be the Everton Board know already that DM will not renew and a new manager will be appointed next season.
I am a city worker too and I think perhaps the poster has simplified matters somewhat, but the sentiment should not be detracted from - we are broke.
To the posters who continue to believe we have the finances to make large acquisitions I say - good on you for your optimism, but the fact is these will be debt funded. We have used debt to finance pretty much the bulk of our transfers (with player sales financing the rest) since Kenwright took charge.
Anyone looking at the club?s accounts will also know that, whilst revenues have been increasing, this has just about covered operating costs (including the rising wage bill) and the added interest from the additional borrowing.
As a means of financing a business, this is not sustainable. The logic of buying £20m worth of players is to break us into the top 4 and earn the lucrative Champions League revenues, which would probably go some way towards repaying the outlay on the players and make the club an attractive investment proposition.
The Credit Crunch has kai-boshed this plan. Furthermore, the current debt levels must be addressed. The club needs to reduce its borrowings at some point, and the only way, given the absence of operating cash-flows, is through investment. Kenwright needs to put his hand in his pocket and invest. If he can?t a radical solution is needed - in the absence of a White Knight, some kind of Supporter?s Trust (with Board Representation) appears the only answer.
We cannot go on borrowing, and we must reduce the interest bill the club is facing. Perhaps a new stadium is the antidote but until that point this club is in desperate need of investment.
The guardians of the club are negligent if they allow the situation to continue. And given the positive response to John Hughes Everton Stadium Trust idea, I think many fans would be up for making a contribution to a Supporters Trust to invest in the club and get representation on the Board. That might even reduce the amount of PR nonsense we have to rely on to understand what is truly going on.
The idea of Supporter?s Trust is of course fine in theory but sadly it is probably very difficult to achieve in reality (I myself, other than a financial contribution, openly admit I would struggle to volunteer like many people....). Are there any other good citizens like John Hughes out there?
To the posters who continue to believe we have the finances to make large acquisitions I say - good on you for your optimism, but the fact is these will be debt funded. We have used debt to finance pretty much the bulk of our transfers (with player sales financing the rest) since Kenwright took charge.
Anyone looking at the club?s accounts will also know that, whilst revenues have been increasing, this has just about covered operating costs (including the rising wage bill) and the added interest from the additional borrowing.
As a means of financing a business, this is not sustainable. The logic of buying £20m worth of players is to break us into the top 4 and earn the lucrative Champions League revenues, which would probably go some way towards repaying the outlay on the players and make the club an attractive investment proposition.
The Credit Crunch has kai-boshed this plan. Furthermore, the current debt levels must be addressed. The club needs to reduce its borrowings at some point, and the only way, given the absence of operating cash-flows, is through investment. Kenwright needs to put his hand in his pocket and invest. If he can?t a radical solution is needed - in the absence of a White Knight, some kind of Supporter?s Trust (with Board Representation) appears the only answer.
We cannot go on borrowing, and we must reduce the interest bill the club is facing. Perhaps a new stadium is the antidote but until that point this club is in desperate need of investment.
The guardians of the club are negligent if they allow the situation to continue. And given the positive response to John Hughes Everton Stadium Trust idea, I think many fans would be up for making a contribution to a Supporters Trust to invest in the club and get representation on the Board. That might even reduce the amount of PR nonsense we have to rely on to understand what is truly going on.
The idea of Supporter?s Trust is of course fine in theory but sadly it is probably very difficult to achieve in reality (I myself, other than a financial contribution, openly admit I would struggle to volunteer like many people....). Are there any other good citizens like John Hughes out there?
Jeez, I should’ve known better than to bother reading an article declaring "the truth". Please re-title "pure conjecture".
Hey Hugh Jass, do you know Samantha Janus’s dad? he’s called Hugh too.
Hey Hugh Jass, do you know Samantha Janus’s dad? he’s called Hugh too.
Because the Kirkby option IS the only way to get investment bar the arrival of another Russian or similar!
If that falls through, then we won’t get investment in a dated and inconvertible ground. And the anti mob have come up with precisely NO alternatives, just like the City Council.
If that falls through, then we won’t get investment in a dated and inconvertible ground. And the anti mob have come up with precisely NO alternatives, just like the City Council.
Here we go again...’the anti mob’
Right, Mike, please expand, explain and elucidate on your first paragraph; the floor is yours
Right, Mike, please expand, explain and elucidate on your first paragraph; the floor is yours
Only kidding Mike...enough’s enough, eh?
The truth......is out there.
(It’s definitely not here)
(It’s definitely not here)
I collect Old Chip fat from hotels, pubs etc in the heart of Liverpool... does this mean I work in the city too.....?
Keep up the good work Bill..... Betty Turpin sends her regards.....
Keep up the good work Bill..... Betty Turpin sends her regards.....
I consider myself ’pretty au fait with finances and financing’ as well. I think we will sign Kaka. We sold McFadden last winter and obviously invested the transfer sum in a ponzi scheme earning us about £80 mil!
The worrying thing is that my reasoning is at least as good as Nick’s...
The worrying thing is that my reasoning is at least as good as Nick’s...
Reading thru all of the posts on this and other finance-related topics, I am staggered by the naivity of most of my fellow Blues.
Of all the posts, I believe Amit’s to be scarily closer to the truth than most. It is certainly plausible.
There is no doubt that the Credit Crunch has had a major impact on companies’ ability to borrow and it is this that I believe is the reason that whilst we have realised funds from outgoing transfers, we still have nothing to spend.
Now, if that (reasoned) conjecture is close then it isn’t necessarily all bad news because continued prudence should allow us to come out of this in 12 - 18m in a better shape.
Problem is - will the supporters put up with tough times in the short term to generate a better outlook medium term?
I suppose elimination of spin from the club would at least go some way to allowing suppoters to focus on the ’reality’ - whatever that may be!
Of all the posts, I believe Amit’s to be scarily closer to the truth than most. It is certainly plausible.
There is no doubt that the Credit Crunch has had a major impact on companies’ ability to borrow and it is this that I believe is the reason that whilst we have realised funds from outgoing transfers, we still have nothing to spend.
Now, if that (reasoned) conjecture is close then it isn’t necessarily all bad news because continued prudence should allow us to come out of this in 12 - 18m in a better shape.
Problem is - will the supporters put up with tough times in the short term to generate a better outlook medium term?
I suppose elimination of spin from the club would at least go some way to allowing suppoters to focus on the ’reality’ - whatever that may be!
Thanks for the comments, good and bad. It is very much simplified, I agree, is fictitious and was meant to provoke some debate but the message I am trying to convey is that we are skint and we can?t afford to "challenge" (as we all keep hearing we will) without a large injection of cash (not debt). As Kenwright has stated publicly, this will not be coming from him but as Amit rightly points out, a White Knight. This White Knight will only buy the club if it offers a decent return on his/her investment and sadly this will not be the case in our current predicament (have a look at the clubs annual report - they will send it if you ask them). I really hope I?m wrong and we have money to spend but its not really looking too good is it?
For the reason stated above by Amit, we can expect virtually all signings made in the next few days to be from overseas.The Premier League now insist that any deals made between their clubs are on a 50% down-rest over max of two years basis and we are unlikely to be able to meet that criteria.
New limit on loans is two per club at any time-so it’s foreighners or freebies in this window!
New limit on loans is two per club at any time-so it’s foreighners or freebies in this window!
@ Robert Jones,
It has changed and for the better in my opinion. Everything seems to be faster than before, however this could be down to me using a mac?
It has changed and for the better in my opinion. Everything seems to be faster than before, however this could be down to me using a mac?
Nick,
you cad - you certainly provoked some debate.
Now, before you get too carried away with your large annual bonus and spend it on bottles of veuve clicqout in the local bar - can you please go and track my pension against the FTSE performance as your supposed to be doing? I really don’t want a deficit in 20 years time because you’ve spent your time on EFC finances.
Cheers.
p.s.
you cad - you certainly provoked some debate.
Now, before you get too carried away with your large annual bonus and spend it on bottles of veuve clicqout in the local bar - can you please go and track my pension against the FTSE performance as your supposed to be doing? I really don’t want a deficit in 20 years time because you’ve spent your time on EFC finances.
Cheers.
p.s.
© ToffeeWeb
-sm.jpg)
-sm.jpg)
-sm.jpg)
1 Posted 27/08/2008 at 04:17:40
Report abuse