The anticipated upcoming change in the Premier League’s financial model from the Profit and Sustainability Rules (PSR) to a Squad Cost Ratio (SCR) system makes the nature of revenue, and specifically matchday revenue and commercial income like food and beverage (F&B), far more critical.
Here’s what I think is happening regarding Everton’s catering model, the new stadium, and the impact of the proposed new financial rules on Everton’s finances going forward:
The New Catering Model at Hill Dickinson Stadium
While the 2023-24 Annual Report and Accounts for Everton FC Co Ltd confirmed the outsourced model for the provision of food and beverage at Goodison Park, subsequent announcements reveal that the club is continuing with an outsourced partnership for the new Hill Dickinson Stadium, but with a drastically different focus on scale and technology.
Everton secured a long-term partnership with Aramark UK, naming them the Official Culinary Experience Partner of Hill Dickinson Stadium. This shows that the F&B operation is not being brought in-house, but will continue to be managed by Aramark.
The partnership’s goal is explicitly to deliver “world-class food, drink and experiences” and to revolutionise fan experience with a focus on speed of service and quality to maximize commercial revenue. I wonder how that’s going down at the HD?
The stadium boasts what they are calling “frictionless” operations to reduce queuing, including “Just Walk Out” technology (branded as ‘Through Pass’ at the stadium) and self-service beer systems (EBars). This investment in rapid service is a direct way to maximize sales volume and, consequently, revenue per match.
In addition, the agreement with Aramark covers non-matchday events (concerts, cultural events), turning the stadium into a year-round revenue generator for F&B.
Impact on the New Squad Cost Ratio (SCR)
The continued outsourced model, combined with the new financial rules, has a massive, two-fold impact on Everton’s future financial health:
1. The F&B Outsourcing and Wage-to-Turnover Ratio
Under the current PSR and the proposed Squad Cost Ratio (SCR), revenue is key. The traditional accounting method for an outsourced F&B model (like Everton’s) means that the Club only records the profit share or commission from the catering operation as revenue.
For example, if the catering operation makes £100M in sales but the club only receives a 15% commission, the club records £15M in revenue. Whereas, if the operation were in-house, the club would record the entire £100m in gross sales as revenue, but would also record all the staff and operating costs.
The new SCR approach limits spending (wages, transfers, agent fees) to 70% to 85% of revenue. By keeping F&B outsourced, Everton’s reported total revenue is lower, which theoretically reduces the total amount of how much they can spend on their squad.
While the outsourced model at Goodison Park was cited as inflating the old Wage-to-Turnover ratio, it could still be technically simpler under the new SCR model as it keeps all catering-related employee wages off the club’s books (they are Aramark’s staff wages). However, the major downside is that it restricts the club’s total available revenue, thereby reducing their potential SCR spending cap.
2. The New Stadium Revenue and the SCR Uplift
The true financial benefit comes from the massive increase in F&B and Hospitality volume generated by the new stadium itself.
The 2023-24 accounts noted that Everton’s matchday revenue was only £19.1M. With the new stadium’s increased capacity, premium offerings, and frictionless technology, the club expects a substantial increase in matchday revenue, which will feed directly into the top-line revenue for the SCR calculation.
The new stadium is viewed as a game changer for the club’s commercial revenue, which includes the F&B partnership, plus naming rights (Hill Dickinson Stadium), and other non-matchday income. This increase in commercial revenue will also directly raise the ceiling of the club’s SCR spending cap going forward.
In essence, the move to Hill Dickinson Stadium is designed to rapidly increase the denominator (Revenue) in the Squad Cost Ratio [= Squad Costs ÷ Revenue] calculation, giving the club significantly more financial headroom to spend on player wages and transfer amortisation without breaching the new limits.
So stay a while, eat, drink and be merry at the Hill Dickinson Stadium, safe in the knowledge that you will be playing your part in this important increased revenue stream that should translate to a stronger position for the club in future transfer negotiations and squad building recruitment!