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The Investor Tightrope

By Christine Foster :  17/05/2008 :  Comments (46) :

The very good recent article on whether we want a foreign investor made me sit back and realise that there is a real dilemma facing Everton Football club, one that will require some hard decisions regarding ownership, business structure and living within our means.

The merry-go-round of transfer season is about to start with ever increasing prices for a limited supply of available (proven or as yet unproven) talent. The pressure will be on both David Moyes and on the board to find the best deal the club can afford.

Increasingly as can be seen from the continuing operating loss, this is not getting easier, in fact it is getting more difficult. It begs the question therefore of just how can a club continue to compete at the top of the Premier League without:

1. Increasing income from operating activities and off field marketing;
2. Investment income from a different source than we currently have;
3. Ongoing solid foundation on which the above two points can be continued;
4. Surrendering the principle that we are a business that has to be run profitably without surrendering performance on the field.

Finding that balance is akin to the all elusive search for the Holy Grail. But is it? The influx of foreign investment has raised the extremes of what is good and bad about the all powerful business investor. Manchester City have a Thai owner who thinks he can buy success in the same vein as Chelsea. Liverpool have two warring factions of American businessmen who solely have their own business interests in ensuring success and they both want to play American hardball to get it. In the middle are the supporters, the team and the manager. How can one measure the damage and true cost of such open disputes?

I would suggest therefore that we are careful for what we wish for because we may actually get more than its worth.

The key to a successful involvement in a Premier League club by a large investor is the provision by that investor of good sound business management as well as an acknowledgement of the business we exist in ? Entertainment. In order to succeed you have to give the buying public what they want. But you have to be honest in your expectations and pragmatic about just what is achievable. It's not a short term business you're building but in fact a long term (10 year plus) commitment.

I would look at the lessons to be learnt from these examples and what we have in place currently and what we need to ensure stability, growth of income and success on the field.

On the field there is no question that David Moyes has performed well over the last six years given the starting point he had and the off-field disputes that had plagued the club. We have progressed from a club expected to be relegation favourites by the pundits each year to a realistic probability of knocking at least one of the Sky 4 off the perch on a more permanent basis. He has got the best out of a small squad but its fragility is still there for all to see when players are off form or injured. In broad terms, however, David Moyes has delivered the best he could with his limited resources. I say limited in comparison to the teams above us and many below us too.

The Board of Directors of the club has at best been basking in the glow of his and the teams performance. Bill Kenwright too has basked in that glory personally for giving Moyes time to develop. In truth he had no choice. But the Board's credibility over financial dealings, investment, stadium relocation has left BK and the Board severely if not terminally damaged.

The club cannot progress on or off the field with its present structure and board management. The debacle over Kirkby is shamefully amateurish in its treatment of fans, in its financial accountability and its lack of a professional approach to assess its options and keep reassessing until they have the best for the club.

Unfortunately too, any potential foreign investor has been made fully aware that Everton FC is not welcoming an inquiry, the current Board have stated that they have no intention of selling their shareholding to allow any further inward investment. The only other way for this to happen would be for the club to issue more shares, thus diluting the value of the other shareholders. That?s not going to happen either. So some-one would have to buy out a significant shareholding to get access to the club and only then would any funds be made available to the club.

But, there is no point in saying it will never happen because it most likely will. Unfortunately in the process, Everton FC may well end up in Kirkby, further in operational debt but with an increased value of assets.

That?s when the sale of the century will occur. Not for the fans or for the club, but for the current Directors. Much brow beating and pride in taking the club to its new home will be accompanied by a sale of their shares and a belief that they have achieved something worthwhile. For themselves most probably. But for the club?

Any investor to the club MUST bring accountability, transparency and good sound business practises. Outsourcing loss making functions of the business and growing the more profitable marketing opportunities.. etc at the moment its all be one way traffic out of the door and nothing coming back. That?s a result of poor decisions, dreadful marketing, lacklustre image and status. All of which belong directly at the door of the CEO and at the table of the BoD.

A professional Board of sound business people who will put in place foundations for growth and success and act as caretakers for future generations of teams and supporters alike. Sounds easy, but somehow I can?t see it happening with the current members of the Board, can you?

The Board may well face a crisis before that happens, especially when it attempts to justify its decision to move to Kirkby over all else. Should it fail it will mean the majority of the board will walk. They will have too. They will cut a deal for an inward investor in a hostile takeover as their best personal option in the event of a failed Kirkby event. Perhaps in the end, that is the best solution for Everton FC, as long as we get what we need and not another Thai politician.

Reader Comments

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Ged Simpson
1   Posted 18/05/2008 at 07:35:07

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Two income sources

1. Increasing income from operating activities and off-field marketing;
2. Investment income from a different source than we currently have.

No 1 would at best raise the income for a mederate midfielder. No 2 would require a decent return..... hard to see how that would happen.

I think any dreams of us being high spenders without incurring further debt are pipe dreams and, like most fans in England, the best hope for us to achieve parity is through either Uefa regs (spending caps etc ? but EU law may prevent this) or through another league becoming more attractive to TV and thus sanity returning to our own.
Derek Thomas
2   Posted 18/05/2008 at 07:30:57

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Which is the worst option??

There seem to me at least to be 4 options:

1) Kirkby goes ahead and the Board, well BK and KW Stay.

2) Kirkby goes ahead and they Go.

3) Kirkby falls over and they Go.

4) Kirkby falls over and they Stay.

But nowadays, those sort, ie people in positions of power, be they elected or not, don?t seem to do the Honorable thing; long gone are the days of retiring to the library with the old service revolver, more?s the pity.

My vote / hope is for No 3, I will provide the revolver if required

If No 1 comes to pass, I can find two uses for said hypothetical revolver.
Gavin Ramejkis
3   Posted 18/05/2008 at 08:33:48

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Having sold the marketing and merchandising I think the biggest opportunity has been lost. DM has achieved European football in three of the last four seasons, if you can?t sell yourself with those credentials then you simply shouldn?t be in the job. Everyone is beginning to take notice of the club thanks to this but who now will make the lion?s share of that; seems to be the outsourced companies.

I?ve argued for years after Spurs held a share issue and raised a significant amount that this was a no-brainer income generator for the club but the current owners have no desire to dilute and risk losing their ownership through gradual share buyouts and forced takeovers. Football is constantly evolving and it would be another travesty if Everton repeated it?s own history of standing still instead of taking the next step to maintaining or increasing it?s momentum. Unfortunately I can?t see the current BoD having this kudos or acumen.

Neil Pearse
4   Posted 18/05/2008 at 09:19:37

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Very interesting article Christine, but I do disagree with a couple of points.

You say "in truth he had no choice" about Kenwright’s standing by Moyes. This is plainly false. He could have sacked him in the dark days of a few years back, just as managers at e.g. Tottenham, Newcastle and now Man City have suffered knee-jerk sackings in recent years. Whatever else Kenwright may be legitimately criticised for, he plainly deserves credit for bringing in and supporting Moyes.

Secondly you repeat the plain falsehood that Kenwright is somehow stopping a major investor coming forward and attempting to take over the ownership of our club. Nearly all takeovers of Premiership football clubs have been ’hostile’ or at least highly public takeovers in which some interested party has come forward to buy without getting the prior agreement of the currrent owner. There is absolutely nothing to stop someone coming forward who seriously wants to buy Everton. Kenwright would be under enormous pressure to sell if such a buyer emerged, and any buyer would know this, and so would have a strong incentive to do so if Kenwright could not be persuaded privately.

The reality of course is rather that no serious buyer, for whatever reason, has yet emerged. Not acknowledging this basic fact means that any discussion of future ownership of our club starts in the wrong place.

Finally Gavin, you must really hate Kenwright and Wyness with such a passion to continue stating things which you must know to be false. Of course we have not "sold the marketing and merchandising" of the club (as in the sense you imply of having no control over it anymore, or not making any money out of it). Like all other clubs that I am aware of, we have outsourced it to people we hope can do a good job on it (since it is what they do for a living). We of course as a club continue to have the potential to make very large amounts of money from marketing and merchandising. We have simply chosen to do so in the way in which virtually every other modern business does.
Gavin Ramejkis
5   Posted 18/05/2008 at 10:43:26

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Neil, how is my supposed hatred translated into your false statement of "lies"?

A quick and easy two questions for you - has merchandising been outsourced?
Has marketing been outsourced?

If you care to answer those then please do ? I?d be amazed even in your pro-BK and KW stance you could deny this obvious FACT, any company running such would be running at a profit (simple economic FACT). The FACTS added together make it obvious for even a layperson that the percentile profit margins of each instance are at the control of the companies running such.

Again a simple question: if you are marketing and merchandising for a brand which is becoming more and more popular even if the original deal was a percentage rather than set figures, the latter I would hazard a guess then as merchandising and marketing a far more attractive brand would incur greater margins of profits.

So please think again before you assume my "hatred" is being used in this instance to state the bloody obvious. Just because you say "outsourcing is king" and I disagree makes neither of us right ? I pointed out some pretty easy mathematics.

Ray Said
6   Posted 18/05/2008 at 11:01:58

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I agree with Gavin R about outsourcing. Most well run companies outsource their problem areas and retain their opportunity areas. The business brains that run EFC decided to outsource their 2 prime opportunity areas, Marketing and Merchandising. These area the 2 areas where on field success is directly translated into off field profit, team plays well more shirts sold.

Just last week Real Madrid?s president showed the direct link when he said Madrid could afford to buy C Ronaldo even at £100 million because of the increase in merchandising he would bring to the club. That's using merchandising as an opportunity area. We cant make any such link because of the outsourcing.

Neil Pearse
7   Posted 18/05/2008 at 11:20:58

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Here’s the simple maths on outsourcing marketing and merchandising. You give it to someone who is better at it than you are. They sell more than you would have done on your own. Your costs are much lower. Even paying them a percentage of sales, you make more money than you would have done by doing it yourself. Simple, and boringly common in modern business.

Readers of your posts may imagine that for some bizarre reason (Bill and Keith lining their own pockets again?) Everton have decided to give up making money out of marketing and merchandising, and are giving it all to third parties. But of course we make money on every single shirt and branded Everton item we sell. Just the same as we always did. We are just doing it in a way that makes us even more money than we would have done by keeping it all in-house.

No-one but an idiot thinks that marketing and merchandising is not a critical source of income in the modern game. The point is over how best to do it to make money. Ray, on Real Madrid, it is virtually certain that they have ’outsourced’ much of their operations to specialist providers. Why? To help them sell more shirts and make more money for themselves.
Kevin Gillen
8   Posted 18/05/2008 at 11:08:06

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Excellent article, well written, constructive. I for one am satisfied we are Everton and with where we are at the moment. I do not want Gillett and Hicks, Abramovich or the Glazers.

I do admit to casting an envious eye at Arsenal from time to time as it seems to me they have other talents to call upon but losing control of a club to an oil oligarch, a robber baron or some tinpot dictator for some short-term solution so we can bring in enormous egos on over inflated salaries isn?t my idea of progress.

Our progress has been incremental and steady and we do stand at a crossroads as next year the pressure on Spurs, Newcastle, Aston Villa and the others will increase to pass us. The Uefa Cup final testified that we are not only fifth in the UK but clearly better than the majority of Champions league entrants.

I am sure that if we regularly qualified via the top four, the Champions League would find a way of ensuring the fifth club entered the Champions League via other means (assuming it was one of the Sky 4). I really do look forward to the day when one of these clubs implode financially or organisationally. I do fear however that the Champions League and Sky monies have changed the game irrevocably and that all modern fans and Kevin Keegan know that the best one can hope for is fifth place in a world where the financial and marketing clout of these clubs is crushing their competition year on year.

My solution would be salary caps and a regulated transfer market that at least allowed small clubs to cash in on their own nurtured talent rather than the current so-called free market that works massively in favour of only the strongest clubs. As somebody who also watches Division 2 football at Grimsby and Championship football at Hull, as well as my beloved Everton, the stark differences between the divisions is alarming and the state of English football depressing.

It is a false economy though to expect that the current situation can persist. The Sky 4 need Everton, Aston Villa, Spurs or otherwise their product wil be devalued. As Harry Redknapp said yesterday, the FA Cup is still secondary to the position in the Premier League (a compliment to Everton no doubt). The Champions League final is also a secondary competition to the Premier League.

We have begun to see attendances at clubs like Blackburn, Bolton, Wigan and Middlesboro fall alarmingly as football fans rightly dessert their clubs position as cannon fodder for the Sky 4 in favour of other sports or activities. Something is going to have to give but in the meantime I prefer our current arrangements, warts and all, despite a growing scepticism about the benefits of a move to Kirkby.

Eddy Bundell
9   Posted 18/05/2008 at 11:22:40

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Are you really serious when you said this:
??There is absolutely nothing to stop someone coming forward who seriously wants to buy Everton. Kenwright would be under enormous pressure to sell if such a buyer emerged, and any buyer would know this, and so would have a strong incentive to do so if Kenwright could not be persuaded privately.??

I thought it?s always willing buyer ? willing seller ... unless it?s a publicly traded company. If BK managed to control the other shareholders, what could a potential buyer can do to FORCE them to sell their shares?

Maybe you can tell us what you would do if you have, say, £500M to buy the club.
Neil Pearse
10   Posted 18/05/2008 at 12:12:13

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Of course I’m serious Eddy! Here’s how it works with my £500M (I probably don’t actually need that much to buy the shares, build a new ground, and buy some new players; but let’s not quibble over the odd £100M).

I go to Bill with my £500M and I say: "I want to buy your shares and become the majority controlling owner of the club. I am willing to negotiate a reasonable price for you. Perhaps even you could stay in a minority position".

Now, Bill could say: "Okay, let’s talk. I want what is best for Everton Football Club, and if you are a serious investor with the best interests of the club at heart, there may be some possibilities". It seems rather unlikely that he wouldn’t at least say this. Given that many of you also believe that he is very financially motivated, he has every incentive to talk since he is about to be made rather wealthy.

So they talk. Of course it is highly likely at some point along the way in the discussions if they go on for a while that someone will get a sniff of this and it will appear in the media. And then, who knows, we may even reach an agreement, and to a great fanfare Bill will announce something like: "It is my great pleasure to announce that after searching for major investment for a number of years, we have found an excellent new investor who will blah blah blah... best interests of Everton... blah blah blah..." And I become the owner of Everton and start to do wonderful things.

Of course, it is also possible (although unlikely in my opinion) that when I approach Bill he will immediately tell me to go away and he will refuse to talk to me. I will then of course say: "Bill, I think you don’t understand. I am extremely interested in investing and owning a major sporting franchise, and I have decided that the Premier League is really attractive and that Everton is the club I want to invest in. You cannot afford to put in the level of investment required to make Everton one of the top 15 clubs in Europe, and I can".

If Bill rather stubbornly refuses to talk, I go to the local and national media, and have them understand that I am extremely interested in buying Everton Football Club. Cue massive headlines across all the media: "Billionaire Neil Pearse wishes to buy Everton!! Says he will build new world class stadium and invest to make the club one of the true world greats again! Nil satis!"

Toffeeweb goes absolutely bananas! Gavin, Jay Harris etc. (and probably Michael and Lyndon) begin to strongly campaign for Bill to sell up and move on and let us have the wonderful Neil Pearse (and his money) in our club. Respected journalists write articles saying that, surely, this takeover makes most sense for Everton. Bill should be thanked for what he has done, and now move over for some serious money to come in.

I think you get the picture. Of course, Bill may STILL refuse to sell his shares. As you say, Eddy, nothing can FORCE him to do so. But I am pretty confident that with my £500M and within a few months I would be the majority owner of Everton FC. Bit of a pity I don’t have the money...

And a bit of a shame that no-one else with that serious kind of money and commitment has approached us either.

Phil Martin
11   Posted 18/05/2008 at 13:42:10

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If there was a serious investor interested in Everton, and he/she approaches BK, only to be told "No thanks", what makes you so sure they would come back and say ? "Bill, I think you don?t understand. I am extremely interested in investing and owning a major sporting franchise."? ... Surely they would just move onto the next big club available for purchase (Villa, city, Portsmouth, Blackburn)?

I think BK realises that Everton are undervalued ?partly because of its old stadium which needs either renovation or replacement. But also because as a business we are shit. We don't even compete with the second tier of our league as a business. Villa, City, Newcastle, Spurs.

I think BK wants us in Kirkby so he can claim to have found us our "new home". but I also believe then, he would then be more willing to sell. As we would be more attractive to a neutral (non-EFC supporting) investor. As on paper we would have a new stadium (albeit cheap), better Corporate Executive facilities and better able to do more hospitality business. Therefore he would stand to make more money.

Robert Earl is in this soley for the stadium move. He doesn?t follow football or Everton FC in particular. It?s a businees opportunity and he?s in it as a favour to an old mate with the prospect of making a lot of money in a few years down the line. Unfortunately, this Kirkby move is being lined up as a payday for them both.

And it will be us supporters who will have to travel out of the City to support the orignal club of the city.

Jay Harris
12   Posted 18/05/2008 at 13:33:06

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Neil Pearse
Three questions:

1. Can you name ANY hostile takeover that has taken place in the Premier League after going public?

2.Can you name ANY of the Premier League clubs that have more merchandising income than Everton who have outsourced their merchandising and marketing activities and sold off their premises?

3. Can you name any other Premier League club that pays their Chief Executive £400,000 a year while he runs his own company in EFC?s time and continues to make an operational loss for EFC despite the huge increase in Sky money and despite your claim that he got rid of the merchandising to make more money?

I have made this point before but will restate it:

Most Rich successful people prefer to do their business in private, partly not to alert other potential investors, but also because they don't like their wealth to be broadcast and scrutinised all over the media.

The majority of takeovers start with an initial approach by a third party to "feel out" the seller hence if there is an extremely unwilling seller then they do not waste their time and money on professional fees etc.

To quote the Board's position from their own documentation submitted to KBC:

"The revised Planning Statement (document 18) released by Tesco, reveals that if there were investors who had the financial clout to wholly or partly fund any new or redeveloped stadium for Everton Football Club, then those investors would be turned away by the current board"

In other words, not only was BK NOT looking for investment 24/7, he was actually discouraging it.

Neil, you are obviously intelligent but if you would take your head out of your arse for a time and look at the real world you will do a lot better.

Why would a highly reputable accountant and insolvency expert (Trevor Birch) mysteriously walk out on EFC after just six weeks in the job only to be replaced by a man with a very dubious reputation for manipulating the truth who we then find out is getting £400,000 a year compared to £100,000 a year that Michael Dunford (the previous Chief Executive) was on?

Jay Campbell
13   Posted 18/05/2008 at 12:57:45

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Neil Pearse, not to sound condersending but that?s a obvoius senario isn?t it???

Kenwright will never sell any stake in Everton, mate ? end of story. He loves being the centre of attention and he loves the press labelling him Everton?s version of Dr Fun!!!

It?s unbelievable that some Evertonians can still defend this man!! His track record as Everton Chairman is fucking abysmal. What exactly has he done??? What investment/millions has been pumped into the club since he gained control of the club??

He is only still chairman of the club because of a talented fat kid from Croxteth and because of a solid, sound Manager.

Ronney?s money improved the cash flow of the club (even though Man Utd done Kenwright up like a kipper), because up until that point the club?s finances were one of the worst in football. Does anyone remember when we bid £2 million for Robbie Savage from the mighty Birmingham City and their board of directors ridiculed the deal we put on the table?? Laughing at us by trying to pay for that galute in 4 year instalments!!! Pathetic.

Kenwright is a lucky man and has Rooney and Moyes to thank for that. Please somebody tell me how else he was gonna bring money into the club?? Sensible answers only please.

As he says?s himself "I don?t want to be remembered as the man who sold Wayne Rooney and took us away from Goodison". Well, beaut ? you are indeed that man!!

He?s an absolute joke and he sent the message out years ago that Everton under his leadership will never compete for honours or the game's best footballers.

Michael Kenrick
14   Posted 18/05/2008 at 16:21:12

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Some great discussion on this thread.

Neil, a lynchpin of your arguement seems to be the absence of any realistic bid for Everton, or to invest substantially in Everton. Yet what if there had been, and it didn’t follow the roadmap you laid out?

I know it’s easy to discount as nonsense, but we have had the story about the ones who did make a strong push, were rebuffed, and ended up investing in Sunderland instead. It never made the public arena and so cannot be verified... but what if it was actually true?

Would that not require you to change your viewpoint? I know it’s a big ask, but could you spend just 5 mins pretending that a massive bid for Everton had been placed and was rejected?

To be honest, I think that scenario fits a lot better with what we all know about Bill ? that he wants to hold on to control, and that he does not want to dillute his controlling interest in the club ? all in the best interests of the club, of course.
Neil Pearse
15   Posted 18/05/2008 at 16:10:31

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Jays - There are two attempted hostile takeovers going on RIGHT NOW in the Premiership (at Liverpool and Arsenal). I don’t recall that many of the others were completely secret until done and dusted - in fact, I recall reading quite a lot about many of them as they proceeded.

I don’t know how other clubs manage their merchandising, but would be pretty surprised if most did it all completely in-house. My main point is that there is nothing intrinsically evil or bizarre about getting specialist outsourcing support to commercialise your business.

On Wyness, you loathe the man so much and throw around so many accusations, I am not sure there is much point in addressing this one with you. Perhaps I could say that £400,000 is not that much these days for a CEO of a football club, and I think you would find that quite a number are paid more. I don’t give a toss personally if his personal business arrangements are complex (nothing unusual about that in today’s business world), so long as he does a good job for Everton. I actually believe on this that his record is pretty mixed. I just, again, don’t believe that he is the devil incarnate up to weird and corrupt schemes to enrich himself.

Phil, since there are almost no other Premiership football clubs to take over anymore, I think anyone seriously bidding for Everton is most unlikely to take no for an answer and simply walk away.

Finally, Jay Campbell, the idea that Bill is simply "lucky" that he is chairman of a club that is now very widely admired and has been the consistently most successful challenger to the Big Four during his reign - well, it’s just ridiculous isn’t it? Especially when you watch the crazy shennanigans from the owners at Spurs, Liverpool, Newcastle, Man City etc.. He selected Moyes and has stood by him when other owners would probably have got rid - but he is simply "lucky"? He has presided over a period of stability at the club in which we have managed to secure the likes of Cahill, Yobo, Arteta et al all on long-term contracts - but he is simply "lucky"? You really should try to prevent your hatred for Kenwright from clouding your view of reality.
Neil Pearse
16   Posted 18/05/2008 at 16:34:32

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Michael, I can imagine the scenario you paint (bid rebuffed, bidder goes elsewhere, we never get even a sniff of it) - I just don’t think it is that likely. Maybe it could happen once, but I really doubt it. It’s just not so easy to keep these things entirely secret these days.

My main reason for banging on about this is that it is just too easy and convenient to believe that the reason Everton does not have a rich owner is because Bill has turned them away. There are plenty of other reasons to explain the absence of a takeover - many in the recent article ’In Defence of Blue Bill’. We have to face up to the fact that Everton is not potentially a great investment for most potential investors - needing to invest in a new ground, low ticket prices etc. etc..

I really think we have to get away from personalising the major issues facing our club - believing that they are simply all about the failings and worse of Bill and Keith - and consider for a moment that there are very much deeper and less easily addressed factors at play. And indeed that some of the genuine failings of Bill and Keith are to do with their attempts to deal with these deeper factors.
Steve Hogan
17   Posted 18/05/2008 at 16:28:08

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Gavin/Jay, like all despots, your own brand of vitriol merely undermines your arguments. Every time either of you post I can guarantee that either ?thief?, ?liar? or other such childish insults will occupy the first paragraph.

Both of you continually second guess what is happening behind the scenes at Goodison. If BK and KW are the bad guys you paint them out to be with their ?bent? business dealings why hasn' either of them been arrested yet?

Tell me, do either of you have absolutely unblemished business careers that you have never ?dropped a bollock? ie the continual berating of both KW and BK for errors made in the past.

As Neil said, if there was a genuine investor in EFC, why would he be so passive as to conduct negotiations in secret?

Perhaps the two of you with your undoubted ?insight? could find us a couple of sports mad sheiks with two billion to invest.
Jay Campbell
18   Posted 18/05/2008 at 17:02:23

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Neil he is lucky.

A player like Rooney comes along once in a lifetime and Moyes has worked miracles considering the restraints he works under so he has been very lucky. If we never had Rooney and if Moyes stunk he would have been run out of town by now. Events on the pitch thanks to the manager have extended his stay.

"Kenwright stuck by Moyes" ? in my opinion it was the other way round.

Also Cahill, Arteta etc signing new contracts I think that is down to their relationship with the manager not the chairman.
Jay Campbell
19   Posted 18/05/2008 at 17:18:13

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Steve Hogan so Kenwright and Wyness are guilty of dropping the occasional "bollock" are they.

How checkered do you want their CV’s to look mate??

The pair of them have dropped more "bollocks" than a boy’s secondary school.
Keith Glazzard
20   Posted 18/05/2008 at 17:40:11

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I normally keep away from threads like these - a degree in Economics was all I wanted of that, thank you - but a couple of phrases in tthe article did catch my eye.

The ’Kirkby debacle’ was "shamefully amateurish in its treatment of the fans". I’m no apologist for Bill K, but I recall him saying in a tv football preview that we were the only club that has asked the fans about something as important as a relocation (possibly about anything?). You can argue that the election was rigged, in the manner of George Bush, but like the most powerful man on earth would say, that would make you a sore loser.

The point about investors bringing "accountability, transparency" and so on was a bit lost on me. That, I guess excludes foreign torturers, gangsters and representatives of non-democratic states. Fair enough. British pornographers? Some clubs might think that’s ok. They certainlly have business acumen - but can they keep the team in the PL?

At least we know where Blue Bill’s money came from. Entertainment - if that’s what you call it. Thank heavens I’ve never had to sit through a performance of ’Blood Brothers’ and that was a real occupational hazard as a teacher.
Jay Harris
21   Posted 18/05/2008 at 19:03:39

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Steve Hogan, I can assure you (as I am sure all the people who have ever worked for me would) that I am certainly no Despot (a person exercising power tyrannically ? if you dont know the meaning of the word). Nor have I ever called Kenwright or Wyness a thief.

As regards being liars and as to their respective competence, I will leave their records on that subject to be judged by the people but I would just outline once again those famous quotes.

"We have the £30 million for the Kings Dock ringfenced" ? IT WASN'T

"The check will be in the bank in the morning" (Fortress Sports Fund) ? IT WASN'T

"I would not sell Rooney for £50 million" ? TWO WEEKS LATER HE WAS SOLD FOR HALF THAT

"I am looking for investment 24/7" ? HE WASN'T AND ISN'T

"Tesco will make a contribution of £50m towards the cost of a new stadium." ? THEY WON'T

"We will be able to deliver a world class stadium that will be up there with anything in the Premiership" ? IT WON'T

"Our transportation experts who are Steere Davies Gleeve are probably the best in the UK and they said this stadium will be the best served transportation wise of any stadium in the north west if not the UK." ? IT WON'T BE

"We will be left with very little debt at the end of it." ? ARE THEY JOKING?

"The chairman and manager have been discussing his new contract for months and everybody?s happy." ? OBVIOUSLY THEY WEREN'T because within a few days our manager, who IMO is the only honest one amongst them, stated that he was still to hear from the Board and he found it strange because he only had 1 year left on his contract.
Sean Henslea
22   Posted 18/05/2008 at 21:03:52

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I know you?ve got the best interests of the club at heart ? hence why you?ve written this long article; but exactly what objective evidence is there that Bill K isn?t also acting in the best interests of the club? He?s not a multi-billionaire so he can?t do an Abramovich. Nevertheless the guy has poured millions of his own money in... money which has translated to players like Howard and Yakubu; players who you share the benefits of watching, whilst having to pay the price of a match day ticket (i.e. considerably less than the millions Bill has put in).

I?ve yet to see compelling evidence that a) there are these hypothetical multi-gazillionaires floating around, just dieing to pump money into Everton; or b) that Bill wouldn?t sell to them if there were. Isn?t it about time we not only cut Bill some slack, but also thanked the guy for running a pretty darn tight ship?

You know, it's pretty easy to write long articles criticising Bill and the Board. If you really think he?s doing a bad job, then why don?t you go out there and earn a fortune (hey, if Bill can do it and he?s as stupid as some of you think, then you can do it too), buy the club and pump all this money in?

Talk is cheap, fellas.... and if you?re going to do it, please at least consider what you?re saying first (for instance, what is operational debt? Unless you?re talking about operating leases ? which I severely doubt you are [if you are, then I?d love to understand how they?re relevant here] ? then this is just nonsense and a signal that you?re opining on subject matter you don?t understand. That doesn?t help anyone...

Jay Harris
23   Posted 18/05/2008 at 22:14:57

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As Bill Kenwright had to remortgage his house, which was only worth 1 million at the time, how can you say he has put millions of his own money into the club?

Without the Rooney money, the remortgage of GP, selling off of other assets and selling off future gate receipts and Moyes's success on the pitch, the club could not have bought the players it has and would be in even more financial difficulty.

Now if that?s what you call Bill putting his own money in then it?s obviously a subject matter that you don't understand.

Operating losses mean exactly what they say that the club is operating at a loss.

If Bill had the club at heart surely he would not be so unwilling to give any % of his shareholding to attract investment.

If Bill had the club at heart would he not be willing to put back into the club some of the 66% shareholding in a club that is now worth 100 million as opposed to the 20 million it theoretically cost them to buy Johnson out?

The answer is in the Tesco submission to KBC :

"6.10 A further point that is of relevance to any debate on the options that might be available to the Club to fund a new stadium, is the willingness and abilities of the Club?s directors to sell some or all of their interests in the Club in order to attract an investor who or which might have the ability in financial terms to fund a new stadium in its entirety or at the very least fund the shortfall that exists in the context of this proposals. As is pointed out in greater detail in the financial statement document 26), this is not an option as the current directors have no intention of selling any of their interests in the Club."

Does this mean that despite his consistent claims, Bill Kenwright wasn?t searching for investment "24/7" after all?

Still think Bill has the best interests of the club at heart???
Christine Foster
24   Posted 19/05/2008 at 04:27:43

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The article is not aimed at BK in terms of his successful career in theatrical activities. I have looked at the performance of the Board with relation to the failed or promised activities and inward investment opportunities made by the Board over the recent few years.

I believe there is little hope in attracting an investor when effectively the facts are that the Board, BK included, have no intention of selling any stake in the club. It is therefore apparent that any prospective investor looking for a club to invest in would not be welcomed to discuss any options with the Board.

Secondly, I believe the only likelihood of seeing new investment will be hinged around the outcome of Kirkby. If we go, then Directors will cash in on increased asset value of the club and probably sell to an investor. If Kirkby fails the board will have little choice but to review and then I think there will be NO CHOICE but to look for investment. As such I suspect some members would sell as a way out.

BK does have a skill set, but his skills do not necessarily transfer to running a football club effectively. Talk isn?t cheap. BK?s comments may well cost the club dear, but it's hardly a loss for himself personally no matter what results.

Sean Henslea
25   Posted 19/05/2008 at 08:31:58

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I know what operating losses are but (as I said in my posting) Im still confused as to what the "operational debt" to which Christine refers is?

Actually, what operating losses mean is that the club is making a loss even before considering the cost of financing (which has a real economic cost)... as in, even if a bank or a rich investor was willing to pump money in and expect no interest or dividend in return (which they wouldn?t), the club would still be making a loss. So, again, let's return to this concept of someone buying the club. Why would they want to do it? Not for business reasons as virtually every club (across all the divisions) are losing money hand over fist (happy to debate which is the correct economic or accounting measure of loss with you but, whichever complete measure you pick, money is being lost).

So why would someone buy a club then? Let's knock off two easy reasons.

First, the Abramovichs and Thaksins of this world. Mr A and Mr T bought their clubs for one reason only - they needed to make themselves sufficiuently internationally high profile so it would not be possible (without huge media scandal) to be arrested or assassinated by their governments. Now, thats a fairly unique situation so let's not rely on that - it's hardly a great basis for the long term stewardship of the club either.

Second, foreign investors ? of which, there are two types: a) those like the Glaziers, who are essentially running private equity plays (for which read: load up with cheap debt ? with some of the proceeds going immediately to the owners - and plan to sell it on in 5 years time) and b) those like Arabian investors wishing to invest in Liverpool. Neither of these types are relevant for Everton. Type A will stop happening now the sub prime crisis is upon us ? there is no more cheap debt, so it doesn?t work as an option. Even if it was available, would you really want a business model which is essentially the same as the Leeds model? Type B is a real anamoly that I don?t think would exist for anyone other than Liverpool. A rich Arab hedge fund (as I understand it) has money to spend and (here?s the unique bit) it doesn?t really care about getting a return on its money; its a government funded hedge fund (so the fund managers aren?t losing their own money) and its being run by people who aren?t accountable to their tax payers and so who can throw money on a football team they?ve fallen in love with over the internet without being bothered about getting any return on that money. I've not heard of any other club in the world getting this kind of attention so I think we can rule this out.

So, that leaves two options; either i) a local boy/girl-done good buys it and runs it as charity (as we currently have and as virtually every other club in the country has) or ii) the fans form some sort of collective and buy the club. I?ll be honest, I've not thought too hard about the latter ? but given that every year new funds have to be pumped into football clubs to grease the pockets or agents and players, I?d be really surprised if the local people of Liverpool will keep subscribing to share issues to fund this (particularly as there is no guarantee of the funds raised actually leading to success).

So, that leaves our local boy/girl-done good. If there is another local fan out their who wants to chuck money away on a hobby and they can throw more money away than BK, then I completely surrender to you ? Bill should pass the stewardship of the club into their hands and let them get on with it. I have no knowledge of such a person though. So maybe Bill?s the best option we have at the moment. Yes, it would be lovely if he had more money but he doesn?t. Thats not his fault and we shouldn?t blame him for it. When I scanned your articles earlier, one or other of you said he remortgaged his house to the tune of £1m to invest. Personally I think he?ll have invested a lot more than this (ignoring time etc) ? but let's say it is just £1m. That is still a shed load of money and risk for anyone ? and, due to the dire economical reasons Ive tried to hint at, the guy must have done it knowing he had very little chance at recouping his money in full. So, if I'm right in thinking this, then hats off to the guy ? he?s stepped up and put money in the club and given it some stewardship which even the most anti-BK person would have to describe as reasonable. Would you prefer to have a richer owner like that guy from Newcastle who appoints KK as a manager and Dennis Wise as a something or other down in London?

He?s not perfect and sadly he?s not mega rich, but BK?s done a good job for Everton... and rather than slag him off again and again in these postings, perhaps people could actually thank him? If you can?t and you still think he?s doing it all wrong, then maybe don?t write long articles about it ? go and earn a fortune so you can take over and throw your money into the club without a chance of getting any back.
Phil Martin
26   Posted 19/05/2008 at 10:54:39

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Sorry, Sean Henslea, I just can?t get over Kenwright?s quotes (see Jay Harris? post above). The guy made a great decision in sacking Walter Smith and appointing Moyes but has continually fcuked up since.
If a player (ableit a boyhood blue) had a great season 6 years ago but had failed to deliver since, wouldnt we be screaming "get rid"? BK has not done enough to move this club forward!

We have a history and fanbase to match the elite but as a business we are run like a midtable outfit. And now BK wants us to leave Liverpool in it?s most propserous era for a cheap midrange stadium out of town.

C?mon think of it like this. If the RS were thinking of moving to Kirkby, into a cheap Tesco value stadium. We would be pissing ourselves laughing. Seriously we would, wouldn't we?
...but unfortunately it?s us and BK and KW are desperate to take us there.

Jay Harris
27   Posted 19/05/2008 at 12:24:26

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Sean Henslea,
So what sort of investors are Randy Lerner, Niall Quinn, Steve Gibson, Mike Ashley, The Arsenal board, The Spurs board, The icelandic crew at West Ham, The QPR Board???

Investors see opportunity. And the opportunity at EFC is there for anyone to see. In terms of non-gate receipt income, it has one of the worst in the Premier League top 12. Spurs with a capacity of only 36000 get double the income of EFC.

You say BK put his million or so in probably knowing he wouldn't get it back... don't be so naive. BK?s consortium now own 66% of a club valued at around £100 million ? not a bad return for the 8 years of incompetence eh?

The only reason we have survived BK?s reign is because of the Rooney money, increased SKY money, remortgaging GP, selling off future gate receipts, selling off our training ground, and Moyes's success on the pitch.

The only contribution BK has made is a constant stream of smoke and mirrors and embarassing actions culminating in the police investigating the club this morning for possibly attempting to influence the council voting in KIrkby.

Poor old John Moores must be turning in his grave.

Bob Turner
28   Posted 19/05/2008 at 19:50:03

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So, Jay, Everton increased from a club worth around £30m (if 66% was worth £20m) to being worth £100m during BK’s tenure, but he gets no credit for this happening while he was in charge??

And if it was so easy to more than treble your money in 8 years, why didn’t you, or anyone else criticising BK, do it??
Jay Harris
29   Posted 19/05/2008 at 21:39:45

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Bob Turner,
If I (or any other Blue I am sure) had had the opportunity to do it at Everton, I would certainly have done it.

If you did not have your head stuck up Bill?s arse you would have seen that my point was that, with the increase in value of his holding, he could release more back into the club (a point made by Paul Gregg when he was a director).

If you think he should be complimented for lining his own pockets while the club still struggles financially then that shows the sort of Evertonian you are.
Bob Turner
30   Posted 19/05/2008 at 23:04:31

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Listen, mate, don’t even begin to question what type of Evertonian I am - nor suggest that I have my "head stuck up Bill’s arse". Who are you to do this??

If you think that every Evertonian who disagrees with you is wrong, stupid or in league with BK, then that says a lot about the sort of person you are.
Jay Harris
31   Posted 19/05/2008 at 23:55:42

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I did not suggest you?ve got your head up Bill?s arse because you disagree with me,t hat is anyone's right and that is one of the advantages ot Toffeeweb where you can exchange views, usually intelligently.

I said it because you, deliberately or otherwise, totally misinterpreted my point.
Steve Dooley
32   Posted 20/05/2008 at 00:07:37

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Ths stuff is so depressing. I read it in disbelief. The team finised fifth, got to a semi final and had a great european run. Somehow the board and the manager are in the firing line?? Reading this dirge you would think we had been relegated. WAKE UP YOU IDIOTS!!
Christine Foster
33   Posted 20/05/2008 at 02:56:46

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Steve Dooley: Lets clear up a ffew things for all and sundry at this point.,

1. Yes the team finished 5th Great. Absolutely chuffed. Considering, as I said in my article, where we came from and what a great job Moyes has done.

2. Bill Kenwright (I actually like the guy!!) God bless him he has done his best BUT thats his personality and the fact that he does love Everton. No question.

3. In terms of BUSINESS acumem to run a football club the good intentions stated have not added up to reality and at some point (long since past) One has to ask how the club goes forward and the only thing that is constant is that life changes and so do circumstances. Bill may well have done some good things for EFC but he has also got to take the fall for some awful decisions and a lack of strategic and business planning. The decisions that he (with or without the board) has made, the comments stated and the situation we are in with regard to the proposed new Stadium in Kirkby leaves the board and by default as leader, his own credibility for making the right decisions and taking the right actions that are in the best interests of the club, very much in doubt.

3. The dilemma EFC has (Not the Board or BK but the entity that is EFC) is that any new management structure, board structure etc would be tied to a new investor who would most likely want a controlling interest in the club. In doing so there is no guarantee that EVEN IF the club was actively looking for an investor, we would get another version of what poor old Man city got.

4, The fact remains the board have stated that they will not sell their interests in the club to attract another investor. Until that situation changes the management structure stays the same and we are likely to get further doeses of the farce that is Kirkby, that was Fortress etc..

My recent threads are and have always tried to highlight that the performance of the board in managing in particular income generation, the future development of EFC and the clubs accuracy and due diligence, its PR..etc etc.., tBK and the CEO KW in particular have been wanting. Badly.

We all have skill sets and yes we are 5th in the Premier league. The actions shown and undertaken by BK and KW are not in that league.

Finally: Credibility is a difficult thing to attain and easy to lose. KW has no credibility at all with me or many fans. BK has credibility but its tarnished by the CEO.

Perhaps he is guilty of listening to much to someone who tells him he knows it all.. If so... Wake Up, BillI
Michael Kenrick
34   Posted 20/05/2008 at 05:45:06

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Jay Harris: I appreciate your passion and concern for the club if we go to Kirkby, but I am becoming increasingly concerned that your hatred of Bill Kenwright is crossing a line. Please could you stop making unfounded statements like this indicating that BK has been "lining his own pockets while the club still struggles financially". There is no evidence for that and you know it.

Yes, he ?could? make a lot of money at some future point, if he sells his shares for a large profit (and what exactly is wrong with that? ? it?s an ?investment? that takes no money whatsoever away from the club). But there is no evidence that he has been lining his pockets with money form Everton ? far from it ? what money?

Please try to Keep it Real; you are damaging your own credibility by making statements like this.

Bob Turner
35   Posted 20/05/2008 at 06:14:11

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For the record, you made it quite clear that you felt that BK had had nothing to do with Everton’s current financial position - I merely pointed out that he can’t be doing too badly if the club has more than trebled in value within 8 years (oh, and we have broken our transfer record in 3 consecutive seasons). In what way does that misinterpret your point (which presumably is that BK is a bad chairman).

If you want to, deliberately or otherwise, misinterpret these facts to accuse BK of "lining his own pockets", then that’s up to you.

Sorry, I must have missed the intelligent part of "If you did not have your head stuck up Bill?s arse" and "that shows the sort of Evertonian you are"
Jay Harris
36   Posted 20/05/2008 at 14:29:33

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Just to correct my post I was not insinuating BK was taking money from the club illegally or legally what I was suggesting was that if he had the club?s interests at heart he would have diluted his holding to attract investment (something he has constantly claimed to be doing) instead of holding on to a significantly increased value of his shares since his takeover.
I apologise if this was misstated.
Jay Harris
37   Posted 20/05/2008 at 14:35:10

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Bob Turner
I hope Alex May will excuse me for taking his post verbatim but it is my view also and saves me retyping it.

This old nonsense about breaking the transfer record 3 times is trotted out again. We sell one player for £23m and spend £6m of it on a replacement. What a stroke of genius!

In total, our 3 record signings cost a little over £3m more than our receipt for Rooney. How in the hell does the board deserve credit for this. In the time that Moyes has been in charge, we must have had £175m - £200m in income from sky and other TV deals. We have spend under £5m a year net on average.

Given that Walter Smith broke even as manager, give or take a million or so, then we have spent around £30m net since Peter Johnson left the club, or less than Man Utd spent on Rio Ferdinand.

Absolutely pathetic, as is praising the man responsible.
Michael Kenrick
38   Posted 20/05/2008 at 14:35:12

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Jay, "lining his own pockets while the club still struggles financially" is something more than a mis-statement. It takes some volition to string those words together. I?d be happier if you would retract them completely.
Bob Turner
39   Posted 20/05/2008 at 19:10:43

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Jay Harris

I hope you will excuse me for posting my reply to Alex verbatim, but it saves me retyping it

Alex, it was my understanding that the Rooney money was needed to pay for "past crimes" i.e. the perilous financial position we had got into at that stage. Therefore any money we did get then, was swallowed up by our debt at that stage.

If my understanding is correct, that means that the funding of 3 consecutive record purchases (£6.5m, £8.5m and £11.5m, or £26.5m in total, if memory serves) came out of "new" money.

Given that the Rooney money was supposedly also used to purchase Phil Neville and Tim Howard, this means even less of it notionally went towards these 3 purchases.

Without knowing what our bank balances have been on a daily basis over, say, the last 10 years, we?ll never know how to allocate cash receipts in with player purchases.

You state that we have spent £30m net since Peter Johnson left as a bad thing - on the contrary, to assemble a squad like we have for such a lower figure strikes me as a good thing. Yes, it has been DM?s eye for a fantastic buy which has done most of the work, but without the behind the scenes work in ensuring Everton had the finances needed, we might not have the squad we have.
Jay Harris
40   Posted 20/05/2008 at 21:24:06

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I am quite happy to retract the use of the words "lining his own pockets" in the context that they seemed to be.

As previously explained my inference was that BK had obviously benefited from a significantly increased value of his shareholding and was unwilling to reinvest any in the club not that he had done anything illegal or immoral.
Arthur jones
41   Posted 20/05/2008 at 21:09:42

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One thing keeps jumping out at me throughout all the threads and discussions about the current standing of our beloved team ,,..... where the f**k would we be now without the input of David Moyes ? As much as certain regular contributors to these pages dislike our Manager , IMHO we would be up shit creek without him , Lets all thank Walter Smith for recommending him to Kenwright , The best thing he ever did for Everton Football Club
Michael Kenrick
42   Posted 21/05/2008 at 07:15:25

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Jay, it still doesn’t make any sense.

Whatever Bill Kenwright has invested in the Club by purchasing his Everton shares (be it £1M or £7M) has increased in value (and you begrudge that?). Yet he hasn’t sold any of that investment, so he hasn’t realised any of the increase in value, and has by no means "lined his pockets while the club has struggled financially".

Indeed, the thing you criticise on an almost daily basis is that he will NOT sell those shares so others can invest in the club. Yet selling his shares is the only possible way he could conceivably "line his pockets" as a result of his Everton investment, although it would still have little to do with Everton’s financial condition, which by most measures (other than the debt) has actually improved overall under his tenure.

. Begrudge his lies and his other failings all you want, but I think it does you no favours at all to make such a flagrantly libelous statement.
Jem Bir
43   Posted 21/05/2008 at 15:49:17

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For all Bill?s faults, and there are many, he HAS kept faith with Moyes who has worked miracles at Everton. I?ve always been a fan of Moyes and Bill obviously believes in him too and that bodes well for Everton.

Man City is a great example of crap investment, do we really want a Thai Sinatra?
Everton are also an example of crap investment because one of Bill?s faults is his unwillingess to dilute his holding to allow for external investment.

Still, given a choice I?d rather be where we are now and not in the mess that poor old City are in.
Tom Abdy
44   Posted 22/05/2008 at 12:01:05

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Well that’s passed half an hour of my working day... Now who are we going to sign this summer???
Michael Hackett
45   Posted 23/05/2008 at 00:44:09

Report abuse$1221101.htm

You could read this and see that we are not as poor as we seem. Also people talk of investors who will pump large amounts of money into the team but this in reality doesn’t happen. Everyone talks of Obramovich (sorry if wrong spelling) and how much he’s "given" Chelsea but in reality all he has done is given them a interest free loan which he want’s back within 18 months if he decides to sell. Doubt anyone would like that situation. I think we have it pretty good the way we are.

It seems amazing that people have this much hatred for a chairman who has taken the club best position in the league in about 20 years. I didn’t know fans were in it for the money or is it that we have all become so used to giving out over the years that we have to come up with new and more imaginative ideas. Some of the comments written here make me feel ashamed.

Be positive and everything will turn out alright. If keep looking for negatives you will more than likely find them. Here’s a trick don’t read the mailbag from this site for about a month and you’ll probably be a lot happier. This is the first mail item I’ve read in a month and now I regret it.
Michael Hackett
46   Posted 23/05/2008 at 01:14:55

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Just realised its Abramovich. Knew it looked wrong but its late and spelling is hard. Ha

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