Kenwright surprised us all as he seems to know a bit about the futures markets, but what else can he sell. Has he opened an account with Ebay & Amazon yet. Rumours are that he's s taking the barca cup to the antique road show.

The loan on august the 5 th was 13 mil with 1.3 mil fee. The was on the document that was shown by the blue union a. Few weeks ago.

I guess there aren't too many alternatives when you are as cash strapped as we are. All other revenue streams are closed, so using the Sky money is one of the few ways of making ends meet.

The other option is to sell your assets to raise some revenue, ie Fellaini, Baines, Jagielka and Barkley ? sell whichever player brings in enough money to pay off all the outstanding loans. Although I can't see Davie Moyes or the fans accepting that option. So I guess this is the least worst option.

The same loan he conveniently forgot to mention a few days after he took it out doing his sobbing act on Sky at the banks refusing to extend him credit

You know he's lying, his lips move

There is a guaranteed minimum broadcast revenue per annum of around £40m per year. Domestic revenue is split into 25% fixed fee, plus facility fees (for live appearance - guaranteed minimum 10), and merit payment based on final league placing. With the overseas TV deal being flat at around £18m per club, that's your £40m.

As Paul mentions above the amount borrowed is lower, but the revenue is the security. Similar to the Bear Stearns - Season Ticket revenue securitisation of 2002.

The interest rate will be punitive, but cheaper than extending the overdraft I'd imagine (which isn't an option anyway). It's robbing Peter to pay Paul - there's basically a hole in the revenue streams each year to cover the payment for the previous year.

Considering that Everton just sold players for 14m that only suggests that the situation is really dire money wise. -------------

In the past 12-18 months, Everton has raised £30 million from the sale of players and its training ground. Also the sale of Arteta alone means that close to £4 million has been saved from the wage bill.

I assumed this meant that the imminent maturing of £17 million of debt would be covered, and leave the Arteta sale as money for us to use in getting a striker either in January or the summer. Two arrivals' wages are paid for by the exit of Beckford and Yobo. So the wages of Yak and Pienaar should mean we had funds to pay wages for a £10 m striker and another loanee winger.

But this securitisation is a concern, if the forwarding of the funds has been spent. Will we find out? Or only when we don't sign anyone?

Similar to the Bear Stearns - Season Ticket revenue securitisation of 2002.
----------------
Wow, was that Bear Sterns? What a pity that it went bankrupt before Lehmans.

The US government bailed out Bear in March 2008. But then became so concerned that Wall St was taking the mick, thinking it could get away with murder, that when Lehmans went under six months later, the govt refused to bail it out and let the free market "do its business". Of course, it did and led to the meltdown of the world's financial system.

the US government's new get tough policy lasted 24 hours, when it bailed out financial insurer AIG for even more money than Lehmans would have cost.

Bloody Hell our debt could have died, or been seriously cut. Bloody Bush!

Is it true though?

Everyone is very quick to pounce on the story but it is from a newspaper. I could be wrong here but writing a dire news story about the clubs finances would be easy to do, i.e quick page filler. I for one do not believe that the board would borrow against money next year. Simply put that would be suicide for a premiership club, it would mean in two years the club will be close to bankrupcy. We are skint but not that skint.

Is this really all that bad news? That percentage seems modest for what amounts to a very short term sub-prime loan?.

We've been running the yearly loans for a while so its nothing new that we have to do it again. The securitisation against next seasons tv money is meaningless because the term of the loan is shorter than that?!.

Apart from the obvious fact that a business shouldn't be run this way isn't this just normal running for us?

Chris,

Believe what you like, but The Guardian are not generally known for reporting unsubstantiated shite.

I don't think that Kenwright was lying when he said that the banks wouldn't extend credit - this doesn't look like a bank loan. It is not unusual for a company to mortgage it's future income, in fact it is my understanding that Everton have used this finance arrangement for a number of years. Unfortunately, it's also a funding method that is common for companies that live hand-to-mouth.

What isn't clear is who is the real lender? There are sources that state the BVI company address is the same as other interests associated with Robert Earl. Earl has financed Everton regularly in the past so this wouldn't be inconceivable. Many suggest that he must be taking bigger slices of the club, but the real reason is probably quite simple, he is earning a great rate of interest (>10% in all likelihood).

Another comment raised is that Earl hasn't got that sort of cash. Maybe he doesn't, but he can probably obtain credit against his other assets at a lot less than he he could lend it on to Everton and make a good turn.

I would also guess that because the mortgage on future revenue has been assigned elsewhere, then the previous overdraft has been paid off. This would leave the recent sale monies to be used to cover day-to-day operational requirements and perhaps, some but not all, funds for the January window.

Mortgaging for two years in advance secures a longer term security of funds rather than re-negotiating next year at potentially higher interest rates and putting us in the same position as this year.

The financial arrangements don't mean everything is fine, far from it, but what it may mean is that appropriate steps have been taken to ensure we survive to fight another day.

Roberto it didnt matter that it went bust or not as the portfolio of money for old rope aka "book" of companies that had securitised loans was taken on by J P Morgan who are happily earning a nice tidy sum from it, when banks and finance houses go pop the administrators sell off anything worthwhile and thats what happened to our debt.

Chris the fact the club had to take a £13m loan plus fees just to operate screams out cash flow problems, not cash flow problems that the cheque hasn't cleared yet but cash flow problems oh shit we have bills to pay right now

Gary he did lie, he would have borrowed the money from Barclays if they were daft enough to lend it to him but they've closed their doors to more lending by the club.

The address in BVI is the RO for many companies its impossible thanks to BVI law to say who actually owns Vibrac or supplied the funds, a definitive is or isnt Robert Earl involved is impossible to say.

Chris #7

It is true as the mortgage has been registered at Companies House by Everton.

You can believe it or not but it is FACT, we have taken this loan, mortagage out.

Gavin, I think we agree on everything you've said regarding the cash flow/working capital and ability to track funds in BVI (because that's what I said!). Maybe just the bit about whether or not he lied! The point I was making was that it is conceivable he wasn't. I'm sure he would have lent from Barclays if he could but he said himself he couldn't.

(and not in response to your post Gavin) When I said above that I didn't think it was a bank loan, for clarity what I meant was that it is more likely to be a private (non-bank) loan.

#8 Chris, you have far more faith in Bill Kenwright than I do mate!

Gary (11) - hallelujah - you've identified the main reason why seats on the boards of EPL clubs are so coveted by "business men". I suspect this is where a great deal of our "other operating costs" have gone in recent years.

Eddie Gartside's "generous" loan to Bolton costs the club close to £4million a year.

No idea why people are so incredulous and think we're a special case though...!

Chris Ashton

You might want to read this or, if you're like the majority of Everton fans who have their head in the sand, you might not.

http://www.evertonfc.com/news/archive/2011/09/20/officials-confirm-no-new-lending

Confirmation we have borrowed against next seasons TV income.

But its OK because other teams do it as well.

Can one of you guys help me with my tax returns in a few months?

Pat, I was thinking the same. Look what Kenwright has done: turned all Evertonians into chartered accountants.

Ringfenced.... nuff said.

This loan is actually mentioned in the clubs last set of accounts if anyone cares to read beyond the "other" running costs which, quite a few idiots on here, are convinced is in Bills back pocket. It also alludes to our main bankers being unable or unwilling to offer loans or extending our overdraft facilities further. So its not a new loan which sort of makes billy not a liar, pity is, he aoesn't realise it !

Steve in language anyone could understand, you have a loan, you pay it off the loan ends, here's the tricky bit, you take a new loan with a new lender or even a new loan with the same lender and guess what - its a new loan, its not a consolidation its a new loan - Elstone has stated in black and white as the club's official mouthpiece it is paid off every year, so QED a new loan.

Can you point out anyone thats actually said the "other operating costs" are in BK's pocket? Its been asked by plenty to be explained what it actually is being 25% of the club's annual income and shocked a few that the chairman of the business doesn't know what it is and in the meeting with the BU came across as he couldn't count, no one in that meeting accused him of false accounting or similar they simply asked a question and one which was pertinent given the club's financial woes.

I am not clever enough to understand alot of this stuff, but I just posted elsewhere on here that at least we would want to know where we are.

This thread is electric, real comments from what look like informed contributors who I for one would like to learn from.

Steve @ 23, I suspect that you are right in your last lines and bearing in mind the text of the BU meeting I reflect that how sad it all is.

Gavin, Max, Ryan and Gary, thanks, as I said, electric.

I am not particularly business-minded but it seems that this "guaranteed" £40 million pound annual windfall from TV revenue is a deal for Premier League clubs only. I'm only whispering it but... what happens if we were to get relegated? I know there are parachute payments but it seems to me that we could be looking at a shortfall of tens of millions of pounds - a debt that could leave the club in huge danger of survival. I don't think relegation is something that is a palpable threat in the next two seasons, but this is football, and it welcomes strange happenings.

Gavin,

Sorry, when I said not a "new" loan, I meant that that loan had already been agreed in principle pre the Kenwright interview, in other words, it's not new or extra in his thinking, of course it is a new loan in the respect of future earnings from TV rights, and although not great from our point of view, not really that unusual either!

The other operating costs are an issue that needs to be answered, although I have a feeling that there will be no great big surprises if and when they are made public. It's strange to me that people make a huge issue of this when it's plainly obvious that a club the size of ours will incur high operating costs yet, nobody seems to give a shit that more or less every penny of the extra income earned from TV rights deals has gone directly to the playing staff.

Without trolling through threads on here Gav, but I will if you want me too, there have been a number of comments suggesting that Bills making a few quid from the other operating costs.

Andrew 26.
If the club suffered relegation {god forbid!} it would receive a minimum of 65M over the following three seasons in parachute payments, it would also in all likelihood, get rid of it's top earners, more than enough I think, to cover its liabilities and start afresh.

Andrew 26.
Sorry that above figure is wrong.
Relegation = Minimum 35M
Season 1 in Championship = 16M
Season 2 = 16M
Season 3 = 8M
Season 4 = 8M
Total = 83M without kicking a ball !

Gary #15, what Bill said to the BU guys was that he will not put the Club further into debt, 3 days after he had already done so by taking out the BVI loan.

Steve, fair play. Regarding the other operating costs if BK was to use his supposed team of assembled staff, ie his PR man, his CEO and his accountant or even Simon Hearne from Deloitte who is the auditor to clarify this then it would go so way to diffuse the situation, far too many people will take a glimmer of gossip and jump aboard.

BK really shouldnt have told porkies about having no credit line on Sky as deals like this arent created and signed overnight and must have been weeks in planning, his hammy performances are cringeworthy at the best of times, surely having paid staff who should be able to write his scripts for him he should do so, if he doesnt trust them to he should bladder them and employ someone who can.

Eric #15, it is possible to take out a new loan whilst at the same time prevent the club from increasing its debt - you pay off the existing debtor, which is what I was suggesting in my post.

Dont worry about debts and loans, we have 3 interested parties wanting to buy us remember.............oh wait......Bugger!

It will be interesting to see the 4th October ruling by the ECJ on broadcasting rights throughout the EU.

If they rule in favour of the Plymouth landlady then the House of Sky may well collapse and there will be drastically reduced TV income for us to receive.