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Let's Be Realistic

By Matthew Lovekin :  22/07/2010 :  Comments (48) :

This has once again been an eventful summer for Evertonians, and we have not even reached the business end yet. It all started so well with four quick signings, an experienced, quality back-up keeper, two promising young strikers and a proven lower league goalscorer. However, we have now lost a very promising young goalscoring England U21 midfielder in a complete debacle situation, for nothing, and potentially losing one of our best players this summer, or definitely next summer, again for nothing. There are still doubts about our most creative player as well.

On the plus side on lack of activity, Cahill, Rodwell and Baines have all committed for the immediate future at least, and it looks like Jagielka will be staying as well as World Cup finalist Heitinga despite several tabloid rumours.

I for one would be happy if the transfer window slammed shut right this minute. Gosling and Ruddy are two disappointing losses, but Pienaar would be a big miss. However, with the sight of negativity on the horizon, the usual critical and negative supporters are coming out of the shadows to voice their opinions, but let?s look at the facts:

We have no money for transfers. Moyes has stated as such this summer and we knew it last summer. Everton could only afford to buy players last year when the protracted Lescott saga had finally reached its conclusion and we basically spent the lot straight away. Admittedly, it was well spent and Everton came off with the better deal with three good players by selling one good player. The only downside to the whole Lescott debacle is that we are now paying a lot more on wages. Heitinga earns more than Lescott did, let alone Bily?s and Distin?s wages as well. This brings me to the main point of the article: wages.

I?m not sure of the exact figure, but I?d approximate around 70% of our current income is spent on player wages alone. Now this in Premier League terms is not that bad, especially when you consider the likes of Man City, but compared to a normal business, this is a horrific amount to spend on staff wages. The remaining 30% of our income is probably spent on non-playing staff wages, utilities, general running of buildings such as Goodison Park and Finch Farm, and debts. In accountancy terms, we are struggling to break even. For the year 2008, Everton posted a profit of £26k, which in Premier League football terms is next to nothing. You might say, a profit is profit and better than a loss. True, but for the year 2007, Everton lost £9.4M and for the year 2009, lost £6.9M.

Everton have arguably a correct recent policy of finding good young players, getting the best out of them, and hoping they stay at the club. This is the best and probably the only policy that we can afford to do. In fairness, under Moyes this has generally worked. There have been one or two that have escaped (Rooney, Lescott, and Gosling) but generally Moyes? philosophy has worked wonders. Now with market demand of players continuing to ask for more wages and other clubs tapping them up by offering more wages, Everton seemed to have reached breaking point in financial terms. We are still offering players new, improved contracts, but at what cost? The wages are taking up all the money, there is no money to re-invest in the playing staff, there is no money for a new stadium, there is no money, full stop.

We can all moan at Bill Kenwright for failing to find the investment this club needs, but we need to be realistic. Do we want a sugar daddy like Man City that could walk away at any point and leave the club with an unsustainable wage bill that could in effect bankrupt the club? Personally, I would rather know that the club is run properly like a company should be.

Another option is to do the opposite. Reduce the wage bill and have a set limit for the total wage budget. If a player wants wages that will send us over the budget, they simply get an ultimatum, accept what we can afford or find another club. This will allow us to have a regular transfer budget but less of a wages budget and probably a lot less quality of players that we currently have. The final option is what the club are doing now, effectively spending the whole budget on wages, which leaves nothing at all for transfer fees. This is not a bad option, but fans have to understand that there is nothing in the pot for that marquee signing that we all crave. Eventually, we will also pass that break even point and start losing money, simply by continually increasing the wage bill, without any transfer fees. That moment looks to be on the horizon. We don?t know how much money Pienaar is asking for, but if it breaks the current wage structure, then it is only going to hasten the snowball effect. I would love to see Pienaar stay at Goodison for more than just next season, but something clearly needs to give on the financial statements.

The answer is probably having a more proportionate balance sheet. Rather than 70% spent on player wages, set a budget of 50%. This will allow 20% to be spent on transfer fees (£14M per annum at current figures?). This will generate a transfer budget but will mean a smaller squad and possibly less quality with the likes of Pienaar and Arteta almost leaving instantly. Could us fans be happy with gaining one big name player a year but losing two? Otherwise, stick to the status quo and accept no transfer fees will be spent, not just this summer but for the foreseeable future.

Reader Comments

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Charlie Percival
1   Posted 23/07/2010 at 05:41:08

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'Run properly' = Gosling saga...

I'm worried about the amount these stadium planning applications cost, architects, surveyors etc coost overall, I reckon it amounts to millions to make these apps ? and think a lot of money is wasted when refusal awaits.
Charlie Percival
2   Posted 23/07/2010 at 05:51:12

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Sorry but I forgot to add, We are one of the best run clubs in the country in terms of the value of our players and the wages they earn; our cap is I think £60k per week. We have the cap for a reason, to not be in a situation you say above.

Look at it like this, would you rather spend 50% on wages with players fighting for mid-table, or 70% on wages where we are pushing for Europe and are making more money from shirt sales, league position, European comps, getting further in the cups etc?

Also, do you mention the sponsorship money, the Sky money, transfer fees received?

I'm sure when the game gets in serious shit due to the £3 billion+ the top flight owe (£2.5 billion of this is just the 'Sky Four'), Kenwright will come out of this smelling of roses.
Jamie Crowley
3   Posted 23/07/2010 at 06:49:53

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70% on wages is simply insane - but....

If you spend 50% of total revenue on wages there's no chance of a CL spot.

If you spend 65% - 70% you can structure debt and exercise fiscal restraint in other areas while having an outside shot of CL.

If CL becomes reality, you use the windfall to build / reduce debt.

If you spend over 70% you turn into Portsmouth.

It's a gamble. Run with "managable" debt and pray you hit the Holy Grail to turn a respectable profit (CL).

BK should really just lay £5 to 10 million a year on red at the roulette wheel.... then let it ride.

Same fuckin thing!

Gamblin' to hit the Top 4. C'mon ol' red!

Simon Watts
4   Posted 23/07/2010 at 07:46:11

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It's not what is taken at the gate. There are other sources of revenue. A well run club will capatalise on this. TV money is huge. We are very lucky that the EPL gets all the TV money. That alone would pay most of the wages. Shirt sales, Sponsorships.

I know it's a tight ship, but I think Everton are trying to be this 'run within your budget' type of club, which is good, but there are far too many cock-ups recently with contracts. We lost Gosling money, and will probably let Pienaar go on a free. All this is because we didn't tie them up sooner. It's like they hanging on to save money or something.

Rupert Sullivan
5   Posted 23/07/2010 at 07:55:35

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If the club wishes to compete financially then they will have to seek ways in which they can expand their existing revenue streams. The failure of EFC to capitalise on the 'star' status of some of the playing staff and promote EFC in markets where the players are 'big' is for me the largest oversight in the EFC marketing 'startegy'.

I agree that a wage cap needs to be maintained, but rather than just seek to cut expenditure, I fail to see why the club cannot seek to braoden its own fan base and therefore develop further revenue streams.

The club's complete and utter failure to profit from Steven Pienaar's image in SA before and during the World Cup is a world class cock-up. How many other SA players are there in the Premier League? How many clubs could parade an International football star in the home country and in the club kit? Had EFC planned it, they could have had thousands of young South Africans screaming Pienaar's name and wearing EFC kits throughout the World Cup ? an event which was televised to millions around the globe.

I can appreciate the funding problems the club has, but an opportunity like that would not have cost even a week of club wages to set up.
Simon Watts
6   Posted 23/07/2010 at 08:12:25

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Completely agree Rupert. Landon Donovan is another one that looks like a missed oportunity. Dithering Bill Kenwright. What we have missed is quite a lot in terms of popularity abroad. These are new markets. These are the two star players in their international teams. Massive countries with a lot of media exposure. Shirt sales are huge for these players, amongst many other revenue streams.
Thor Sørensen
7   Posted 23/07/2010 at 08:23:58

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I can see Villa getting £30M for Milner and "doing a Lescott", i.e. strenghtening their squad with 3-4 very good players.

We cannot compete financially with City, Chelsea et al, but my fear is that, should we come into some money towards the end of the transfer window, it may all be in vain as Aston Villa could be in a position to hijack any of our transfer deals.
Tony J Williams
8   Posted 23/07/2010 at 09:00:48

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Most important piece of business that is outstanding is getting Arteta to stay. I had a colleague come up to me with his "inside information" stating that Arteta wants out. I brushed it off but his mate has had a good few bits of info passed to us before it hits the press/rumour forums. I am still trying to brush it off but not so confidently.

He is the linchpin for the team and, if he goes, so does the good linked-up play we were starting to play near the end of the season.
Gavin Ramejkis
9   Posted 23/07/2010 at 09:49:31

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Matthew you have a Catch-22 situation in that having good players allows you a better chance to finish higher up the league table and gain European qualification and have a shot at silverware all of which gain extra revenue. Capping wages with swingeing cuts may be detrimental to achieving any of those goals but you need to balance a credible gamble with sheer lunacy. A league wage cap would be the only way to even this change out as, if we impose a hardnosed wage cap too low, other teams simply continue as they are and outbid us on fees and wages and gain the players we are looking at.

Landon Donovan is a marketing revenue exercise but we can't afford it, surely the speculation if marketed well would pay for itself, high profile player and targeted sales in his homeland of Everton merchandise. The current incumbents don't appear to have any ideas on marketing or even short-term development strategy and look to be hanging on a for a payout on their shares.
David S Shaw
10   Posted 23/07/2010 at 09:53:34

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Just like a team that's gonna win the balance sheet cup....erm we've won nothing for years, therefore something is wrong. Tell me what is wrong?? Is it Moyes, is it Kenwright? What or who is it? Or is our only aim to stay in the Premier League?

There's too many people yet again painting rosy pictures of Everton.

We're the excuse Kings of Britain.
Craig Wilson
11   Posted 23/07/2010 at 10:30:08

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Well let's be realistic!!!!

Well let's start then "promising young goalscoring England U21 midfielder" who was on a free transfer and yet only the daft geordies were interested!!!

Yes we have dropped a clanger letting him go for free but then who was willing to pay a fee for him?? Let's move on, the fact is he wasn't good enough and, as far as I am concerned, we now have an extra £15-20k a week to offer to the likes of Arteta & Pienaar ? that should be the main concern of the club right now.
Ciarán McGlone
12   Posted 23/07/2010 at 10:41:46

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Why are there only two options? Poverty or a sugar daddy?

Why can we not get a sensible business person to buy the club, run it properly ? maybe produce a profit and maybe throw a few of their own sheckles in and give Moyes a modest transfer pot of about £25-30mill a year?

What is so far out about that possibility? Other than the obvious conclusion that the current incumbents don't want to move?

For a club to be successful, it needs a good manager and a good Board... we have one of those factors. There needs to be a root-and-branch change of the tired old structure of this club. Starting with our rather useless figurehead.
Roberto Birquet
13   Posted 23/07/2010 at 11:00:37

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"I for one would be happy if the transfer window slammed shut right this minute."
Meaning you would be happy for us to allow a £12 million-plus player (Pienaar) leave us for nothing (next year)?

You say realistic, and yet advocate we give up on £12M+. FFS, this is madness.
"Oh, and... I?m not sure of the exact figure, but I?d approximate around 70% of our current income is spent on player wages alone."
Me: I don't know, so I'll have a guess. What? Realistic?? The latest figures I saw was that Everton pay about 61% of income on wages.

And the following makes no sense......
"Now with market demand of players continuing to ask for more wages"
Everyone always asks for higher wages, Matthew. So do I. It does not mean wages actually rise. Mine were frozen this year. "Market demand" refers to what people are able to pay for wages. Which is why your sentence makes no sense.

I do not think wages are rising, except for Man City, and that is because they can (their demand has risen). The only wages that are rising at all are among the SuperClubs (Madrid, Barca, and er City). But for most of them it is only for the sort of players that cannot be replaced (Messi, Ronaldo etc)

Of course, Everton does not have money. That is why we should not allow £12M players to leave for nowt. Wheel and deal!

We could probably sell Pienaar and Hibbert, and get Donovan, Onouha, and a back up for Baines with that money. What is unrealistic about that?

Your last point, I agree with, and I think, so does the Board.
"If a player wants wages that will send us over the budget, they simply get an ultimatum, accept what we can afford or find another club."

Exactly! Sell Pienaar! We agree.
Liu Weixian
14   Posted 23/07/2010 at 10:58:45

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"Do we want a sugar daddy like Man City that could walk away at any point and leave the club with an unsustainable wage bill that could in effect bankrupt the club? Personally, I would rather know that the club is run properly like a company should be."

YES! A sugar daddy would be better than that pauper Kenwright! There is no guarantee that Man Shiity's sugar daddy would ever get tired of his club and then 'abandon' it. And even if he does 'abandon' it, it is likely he will sell it to people who can afford it. Either way. the Baby Blues will be in good hands.

If you think that Everton Football Club is run properly, I think you ought to take a business course. As a business, EFC is suffering because it is:

(i) Underfinanced. We have no money to expand our resources. We are living from day to day, pretty much like a beggar.

(ii) Hopeless brand equity. All the talk about being the 'People's Club' does not cut it with the new type of supporters (consumers) who follow only success. The good old days when you bloody well support the club in your town are history. Global audiences simply cannot identify with a club like EFC that hasn't won a trophy in over a dozen years and has few star players. And yes, the freaking ugly home kit makes it even more difficult to get people excited. And oh, by the way, what has the club done to improve the revenue stream? The marketing and business strategy teams are a disgrace and they should all be sacked, every mother's son of them!

(iii) Stupid management. It is no exaggeration to say that David Moyes has been singlehandedly carying the club since his appointment as manager. He has transformed us from a bunch of relegation candidates to European hopefuls ? all on a shoestring budget. The Gosling debacle only shows how incompetent the management is. We just lost him for free! This means a LOSS in the Profit and Loss account!

(iv) Lousy PR. Has the club come forward to clear the air about Gosling? NOPE. They simply don't give a damn about the supporters!

We are a disgrace!
Andy Mack
15   Posted 23/07/2010 at 11:49:25

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Once or twice a season I get in this mood where I think, "Whats the fuckin' point! Football is killing itself" ? This past year, it's been every other week... and it's not just Everton: Pompey going to the wall (almost), Man City buying anyone and everyone, the players themselves being divey, cheaty, gits... The spending is mad... Maybe watching "our cream" in the World Cup has brought it to a head.

What is our debt? The last figure I read was that we were turning over £80M, Debt £38M and an annual interest payment of £4M.

If we are paying 70% of turnover on wages, we've got to stop it. We can't win the league whilst there are clubs with unlimited spending power buying up any talented player that happens to pop up on telly. Here's the "Fuck it!" moment, we've a debt of £40M. Arteta £15M, Pienaar £10M, Jags £16M, Yak £6M. Off you trot.

Debt is cleared, including penalty for early repayment; the club issues a statement that the current climate is unmanageable and we are putting our faith in players with an appetite for the game ? not for gold-plated Bentleys. We'd still not get relegated surely, and might actually acquire a bit of admiration.

Ah well, back to sobriety.
Andy Mack
16   Posted 23/07/2010 at 12:17:14

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...and now it looks like Sheff Wednesday are being wound up.
Kunal Desai
17   Posted 23/07/2010 at 12:06:07

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Well said, Liu. It would appear that each and every department of this club appears incompetent.

David Moyes is keeping afloat Everton Football Club in my opinion. The longer this 'incompetency' is shown by the club and they aren't serious enough to pull their fingers out of their arses quick enough and run the club like a business, then I'm afraid, if not this season then certainly next season, the likes of Pienaar, Arteta, Jags to name but a few with others will certainly move elsewhere.

No half-decent player wants to be at a club plodding along without winning anything in their career. For a business to keep on scrapping for pennies year after year doesn't bode well or show ambition to the star players at the club. The problem you have thereafter is how many and how long can DM find those unearthed gems. Surely he will get sick and tired of this situation and decide enough's enough.

Charlie Percival
18   Posted 23/07/2010 at 12:40:16

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Andy Mack (14), I'm not going through another 15 years of relegation dogfights!

As long as the debt is manageable and a long-term solution is in place (and the debt is getting smaller) then that's fine.

I expect many of us have debts, but we manage them, just hope the person who cocked up the Gosling contract isn't dealing with our finances!
Tony McNulty
19   Posted 23/07/2010 at 13:09:23

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Liu (#13)

Whilst I agree with most of your points about aspects of our club?s management on the non-playing side, I have none of your confidence in ?sugar daddies.?

One topic they will cover on a "business course" is the negative consequences of excessive debt. Have you not considered the events at Leeds, Portsmouth, West Ham, the Manure, the Shite, as well as Man City under its previous owners?

The risk of the wrong ?sugar daddy? is that rather than putting money into a club, he can easily load it with debt, take a profit, and then walk away, leaving it on the brink of administration.
James Cadwaladr
20   Posted 23/07/2010 at 12:48:15

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Let's look into this in a bit more detail. We all agree that Kenwright doesn't have the money to invest in the club.

I recall seeing his personal wealth being listed as somewhere between the £3-5M mark ? less than a lot of players in our squad! His holding company that owns EFC, True Blue Holdings, owned circa 71% of the club prior to the investment by Robert Earl, who owns 23%.

Robert Earl never actually invested any money into the club, he just underwrote bank loans to pay off existing loans and finance transfers.

Everton have already mortgaged the assets of the club to finance Finch Farm and the signings of Andy Johnson, Yakubu, Fellaini and Baines totalling £37M which has not been paid off. Thus these players are still being paid for. This is where the money is going plus to finance the debt interest of around £4M as discussed.

We very few tangible assets and therefore nothing else to secure against further financing which we wouldn't be able to afford anyway.

People who ask where the Sky money, prize money, sponorship money is going ? It is all accounted for, paying all club expenditure and servicing our debt.

Regardless of what people want, we simply have no spare cash to spend (this will remain the case for some period of time), with little opportunity to borrow more as we are leveraged to the hilt.

It is the same as the chap on the street that earns £1500 per month, has a £400 mortgage, then remortgaged a year ago and that costs £100, £200 bills, a £150 car loan, £1,500 overdraft that costs him £50 per month, a secured loan for his bathroom costing £150 per month so has a charge on his property and spends the other £450 on living. He has missed a few payments here and there, in this climate his mortgage company won't give him any more, neither will his parents. Therefore he can't go and buy the new Mercedes he wants ? because he can't get the credit and because he can't afford it. He is also essentially spending every penny on keeping what he already has.

People have to start understanding this is the case with Everton. We may not want to accept it but I'm afraid we have to.

We had no money when Kenwright took over, Rooney had to be sold to keep the club afloat so don't be mistaken that that has financed player acquisitions etc, and we simply did not suddenly find a £40M pot of gold to pay for some of the big signings over recent years.

We have nothing to borrow against and seem to exhausted our options.

Clearly we need to be bought by somebody, not have the investiment that The Chairman is talking about as that investment comes at a cost which we are paying for now.

My gravest concern is the value that Kenwright puts on his share holding of the club and thus ultimately the value of the club. His holding company's shareholding is decreasing and thus is clearly not going to realise the value that he wants.

Accept it, it has been the case for a long while and it will be for a long time to come.
Trevor Lynes
21   Posted 23/07/2010 at 13:23:20

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I have worked all over the Middle East for more than 20 years and most people had no idea that Liverpool have two clubs... they know all the 'BIG' teams and wear the shirts but EFC shirts and paraphernalia are not on sale!! Even Spain dont seem to have any merchandise about EFC although lots of other club shirts are readily available including our big 4 plus Celtic, Rangers, Newcastle and Villa.

Our PR status is almost non existent so it's no wonder we don't have the money to compete.

The backroom staff and board need a big shakeup, even the Grand Old Team song grates with me as it smacks of by-gone years... Z-Cars is great and should be kept as it is a stirring tune.

All the above chat about wages etc is doing nothing to help any supporter of the club and provides excuses for the board when explaining our inactivity. I truly fail to see the benefit of having overseas friendlies pre-season if it does nothing to swell our depleted coffers.

The club organisation and management needs to be shaken up.

Michael Kenrick
22   Posted 23/07/2010 at 14:26:09

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James @ 20: some misconceptions that need updating:

1) True Blue Holdings no longer exists. It was wound up over 5½ years ago! (2 December 2004).

2) Robert Earl purchased the Gregg family's shares; as such, this is considered to be "investing" in the club... although the money paid (~£9M) actually went to The Greggs.

3) Kenwright's shareholding in Everton is not decreasing. It was not affected by Robert Earl's buy-in.

This has been the problem all along, and why nobody has truly invested in (ie, given lotsa money to) Everton ? because Kenwright (and the other major shareholders... and their 'invisible' backer, Sir Phillip Green) will not tolerate having their "investment" share diluted.
James Flynn
23   Posted 23/07/2010 at 14:16:29

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We get right up there challenging for the League Trophy this year (which we will be), let's see how the financial situation is affected. Because everything, Everything revolves around winning.

Of course, ManU, LFC, Arsenal, and Chelsea sell the most merch world-wide. EPL is bigger on TV internationally than La Liga, Serie A, and the Bundesliga COMBINED.

As this TV coverage world-wide is a fairly recent phenomenon, who were the Top 4 teams when it happened and mostly ever since? Those 4. Naturally, they're the best known.

EFC needs to be in that group, which we can do starting this season. DM has built the club in the tried and true (and best) method. SAF built ManU this way and the Arsenal Frog the same. Yeah, they didn't have to deal with billionaire money-bags as competition. Moyes has had a more difficult row to hoe.

But he's done it. We win, the money will come. And because of the way DM's done it, EFC will have a much easier time handling debt than the teams that jumped right into the deep financial end and are now struggling to keep their head above water. LFC for one.

And look at that CL and La Liga Revenue-generating Juggernaut Barcelona. Couldn't meet payroll. Hahaha. We're in the hunt of honors (which means money) this season. And that money will go a lot further for EFC than it would for the "Rich" clubs.
Jay Harris
24   Posted 23/07/2010 at 14:06:45

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The same comments have been made throughout Kenwright's regime.

"The club is badly run and badly marketed".

The trend since the advent of Sky (which was pioneered by Phil Carter) has been an increasing financial whirlpool at the top of the league which even the downturn in the economy has failed to halt.

So we either participate or leave (via relegation).

The price of participation is high costs (especially players' and agents' costs) and therefore the necessity to run efficiently and creatively.

That is where EFC still has a major opportunity which beyond all economic reason has been consistently supported by Moyes and the players who have all performed beyond what could have been reasonably expected.

Now compare that with Kenwright and his buddies' performance:

1. Inherited £5 million debt which is now reputed to be £80 million (despite the £25 million+ from Rooney) resulting in £4 million interest payments a year.

2. Cocked up at least two stadium opportunities, especially the KD development, and still no plans to resolve this issue. The DK opportunity which most people (except Tesco Terry) said had no chance cost us £4 million in "experts?" fees.

3.Constant turmoil between directors resulting in FIVE Chief executives during Kenwright's reign and an acrimonious split with Paul Gregg, none of which enhanced EFC's reputation and image.

4. Consistent lies of an extreme nature such as "The cheque will be in the bank in the morning" (Fortress Sports fund) and "I am looking for investment 24/7" (yeah right for over 10 years).

5. I think to a man all Evertonians can point out to poor marketing and merchandising which nothing has been done about for 10 years.

All this and some Evertonians wallow in the "Well we're skint" syndrome.

This is why we're skint.

It's not because Kenwright has no money, in fact very few chairmen put their own money into the club.

It's really because he is an incompetent liar who has created the same culture in the administration of the club and that for me is his biggest failing.

He is a true blue but a chairman's role is much more than turning up to watch the game, revelling in the spotlight when we do well, and disappearing when the shit flies.

That is the opposite to what a good chairman is.

And to all those who say we could do worse, I would argue that, without David Moyes, Kenwright would be the worst chairman in Premier League history.
Tony McNulty
25   Posted 23/07/2010 at 14:55:44

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Michael (#22) re. your ownership comments.

Andy Burnham turned up briefly at the ESCLA (London-based Everton Supporters) AGM last Saturday. He mentioned the idea of establishing a Supporters? Trust based on 20,000 people each putting in £1,000 for a share, thus raising £20 million. These ?shares? could be passed on to their family members, thus ensuring that ownership would remain in ?the people?s hands? (he alluded to Abramovich, who had apparently wanted to buy a Spanish club, but was put off by the ownership structures of the big Spanish clubs.)

He felt the £20 million could be used for progressively upgrading Goodison over a number of years. The Q and A session was cut short because he had to rush off, so there wasn?t really a chance to ask him about Kenwright?s reactions to this idea.
Michael Kenrick
26   Posted 23/07/2010 at 16:21:16

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Thanks, Tony (#25), I hadn't heard about that. Although it's been a commonly recurring theme in these discussions for as long as I can remember. Broader fans ownership/investment; Everton Fans Trust, Investors in Everton... I've tried to track these over the years (see pages under our Fans section).

Great ideas... the common outcome is sadly all-too predictable ? they don't go anywhere. I think it would take a real visionary with money and charisma, who wanted to broaden club ownership in the Spanish style, almost as an altruistic act, to mount firstly a total buyout of all the current major shareholders before this would have any hope of succeeding.

That seems further away than ever... although the time that Bill leaves has to be getting closer each and every day!
Rupert Coghlan
27   Posted 23/07/2010 at 16:53:16

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First step has to be a legitimate attempt to clear the debts. Selling the Bellefield land is a start. Selling 'assets' that we could probably cope without is another. By this I mean the likes of Yakubu, possibly Yobo.

I'd guess we could bring in around £15m for the pair, whilst also reducing the wage bill. We've got enough strikers on the books, and if pushed could always find a cheap centre-back to loan in. We have 3 good centre halves, and a couple of young ones coming through, pending a hopeful recovery for Shane Duffy.

In theory - Bellefield land plus those sales would take a significant chunk out of our debt without drastically impacting the squad.

Also, if push comes to shove, Moyes can't afford to be precious on Pienaar's contract. Either he's in or he's out. Would rather keep him, but only on a new deal, and not running another contract down.
Andy Crooks
28   Posted 23/07/2010 at 17:34:16

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Liu and Jay are spot on. Bill Kenwright has lived the dream on the cheap for too long.
Charles King
29   Posted 23/07/2010 at 19:11:11

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"Lets be realistic"

Realism is a dangerous concept for football fans, remove the dream, the hope, the mystique, show the truth in all its present brutality and after a while you might think.....

"Why am I wasting my time, energy and money on these people???"

Perhaps ignorance is bliss!
Tommy Gibbons
30   Posted 23/07/2010 at 19:21:58

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So it's all Kenwrights fault then? So he wouldn't put the club into even more debt for the Kings Dock... what a twat! So he tried to get a stadium built for us for no more than a third of the cost (Kirkby)... what a bastard! He brought to the club and has kept hold of David Moyes who has now built the best team we've had since 1987... what an absolute cunt!!

Is he an angel? Certainly not... but neither is he the devil in disguise (cue for a song). I ain't gonna try and take you all on point for point because you all know so much about the inner workings of the club and you're all such financial wizards I doff my cap to you all!! Get real and get with the programme... we've been the biggest and the best before and maybe, just maybe, we're about to be the best again (being the biggest can wait)...

Support the club and the team just for one season without your constant carping so at the end of this season you can say you did your bit and hope to hell we win something or at least get Champions League! Coz if we don't, it'll be another 20 years before we challenge again as Moyes and the better players will leave...

And before you start... it'll have nowt to do with Kenwright if it goes tits up because he's given everything he's got and this season really is the last throw of the dice!

Roberto Birquet
31   Posted 24/07/2010 at 00:51:09

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"1. Inherited £5 million debt which is now reputed to be £80 million (despite the £25 million+ from Rooney) resulting in £4 million interest payments a year."
The Rooney money has been spent on gathering our best squad in 20 years. By all means give your opinions, but make yourself more believable by not stretching the point.

And some points were fair, but I nearly didn't bother reading after point 1 as it was so lame.

And where is the source for £80 million? And don't refer to gossip "reputed to be".
Roberto Birquet
32   Posted 24/07/2010 at 00:59:21

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Among all the woe, I think we need just two players, assuming no senior player leaves. RM ? preferably someone who has already proved himself with us, no name required, and a back up to Bainesy.

We could sell a defender (most likely either one of stalwarts, Hibbo or Yobo) to get a LB; and Lady Luck for the other fella.

People forget. We already have a damned good squad, and Arteta hasn't actually left. People are squealing based on one quote from his agent.

It's that time of year. Have a bong! or a wee chianti if that's yer thing. Summer should be for enjoying. Anyway, goodnight.
Brendan O'Doherty
33   Posted 24/07/2010 at 02:22:48

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Wasn't it a £20m debt he inherited from Johnson?
Matt Traynor
34   Posted 24/07/2010 at 01:05:54

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Jay (24) referring to the £4m in fees, whilst it may look to you and others that these "experts" came up with plans on the back of a fag packet, the reality is that with any major planning application in the UK, there is a shit load of work that needs doing. Granted in other countries a word in someone's shell like and a "consideration" to that person will see you ok. Having been one of these "experts" I can assure you that all are suitably qualified and experienced. However, the problem is, occasionally the clients aren't.

Ex-colleagues of mine worked on the KD and DK bids. Both failed for different reasons. In both cases they knew it would fail. They were employed to "make an idea work" ? not to give their advice. The company didn't care cos they still got paid, but my ex-colleagues did as most of them were Blues.

Planning law and regulations in the UK is a minefield. It takes too long, and in that time policy can change, administrations can change. Look at the Bellefield problems for one. That's one reason why so much money is wasted on feasibility / design in the public sector. I've seen people go through whole careers with £millions spent, and nothing built. Funnily enough, me and my ex-colleagues used to have more success on overseas projects ? with clients who paid you to advise ? not to make their hair-brained schemes work.

There's enough waste in the game through the likes of Agents etc., so don't put too much emphasis on these "experts" who are doing a professional job, and often for a client that they would advise differently ? if the client would listen.
Charlie Percival
35   Posted 24/07/2010 at 04:56:51

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Brendan (7) says "I can understand why some fans lower their expectations, but this takes the biscuit. Ridiculous comment."

What, I've lowered my expectations because I said WE WILL NOT WIN THE LEAGUE and WILL NOT FINISH HIGHER THAN FOURTH?

Please tell me where I am lowering my expectations from?
Charlie Percival
36   Posted 24/07/2010 at 05:04:25

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Last season was last season. Yes, we had the second half of season sorted, 2nd best in country, that does not give us the automatic right to think this is consistent and will pay dividends this season.
Thor Sørensen
37   Posted 24/07/2010 at 12:11:28

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I've previously advocated the need for a back-up left back for Baines, but have eventually changed my mind.

Baines is a very good player, both Neville and Hibbert can provid decent cover there (perhaps even Coleman) and Luke Garbutt is coming on leaps and bounds an look likely to become our first choice left-back in a few years.

At a push, even Distin can operate at left-back, though hopefully it won't come to that.

Our limited resources will be better spent elsewhere (striker / RM).
Jay Harris
38   Posted 24/07/2010 at 13:40:17

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The £20 million is the price Johnson wanted for his shareholding which pales in comparison with the £180 million that is being suggested as the asking price for the club now.

The club's accounts just before Kenwright's takeover show £5 million in debt and there is even an article which was published on ToffeeWeb by a finanacial analyst ridiculing Kenwright's claims (via his buddies in the media) that he inherited significant debt.

£80 million was the figure quoted by Robert Elstone following the AGM just over a year ago.

My point on the debt is how badly EFC are run "off the field" with operating losses every year bar one of Kenwright's rule.

Now if we had a Board with a proper long-term plan and some determination to back Moyes and the team, we would really go places instead of failing miserably to reinvest when the time is right, such as when we came 4th in 2004.
Jay Harris
39   Posted 24/07/2010 at 13:59:48

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Tommy, Kings Dock truly was the deal of the century.

A genuine world class waterfront stadium at a cost of £350 million which, due to LCC and others getting grant support, would only have cost EFC £30 million and all Kenwright had to do was dilute his shareholding in EFC and Paul Gregg would have put up the cash.

Yes you're absolutely right, he is a twat.
Jay Harris
40   Posted 24/07/2010 at 14:06:01

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Matt, I wasnt trying to denigrate the profession.

I was making the point that £4 million was wasted that could have been used in better ways.
Brendan O'Doherty
41   Posted 24/07/2010 at 15:25:23

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Just to clarify, are you saying that £20m was the price that BK paid (borrowed) for his shareholding, and that only £5m of this was club debt?

I agree with you that missing out on KD was a massive let down, which the present board will forever be blamed for and tainted by.
Jay Harris
42   Posted 24/07/2010 at 19:26:27

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Not quite, Brendan.

The shares were PJ's and Kenwright and Paul Gregg arranged for £20 million to be paid to PJ for them to acquire the controlling interest in EFC.

The debt remains with the club and is a separate issue... although some people question how the £20 million was paid because:

1. Kenwright only had around £1 million of his own money and

2. the club's debts rose to £30 million in the first 18 months of Kenwright's tenure.

I don't want to sound patronising but the only way I can explain it is imagine you had some shares in, let's say, Virgin, the value of the shares may fluctuate but it wouldn't change how much Virgin owed the banks or others.

Buying shares in a business does not mean you put money into it ? it just means you own part or all of it.

Kenwright has not put one penny of his own money into EFC, he simply bought the shares the value of which has risen handsomely since.
Michael Kenrick
43   Posted 24/07/2010 at 21:28:18

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Jay, I don't even begin to understand leveraged buy-outs but is it possible, I wonder, if that's what happened with Everton, way way before Man Utd and Liverpool? That the cost of the purchase was somehow leveraged into corporate debt? I think that's what you're suggesting. Sounds astounding to me that such a trick is allowed, but there ya go... welcome to Capitalism. I'm sure Fran Mitchell will have something to say about it!

It's also astounding to me that they could be looking for £180M. Yet the exchange value of the odd privately held Everton stock has I believe been rock steady at around £1,400 since forever (well, the late nineties), That would create a simple valuation of £50M. Conversely, if the club is valued at £180M, shares should be going for £5,150 each!!!

I wonder what Messrs Blankstone and Singleton make of all this malarkey???
Brendan O'Doherty
44   Posted 24/07/2010 at 22:48:23

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Yes, Jay, I this whole issue of shareholding and debt is a bit of a minefield. You are saying that the two are separate entities, i.e. despite fluctuations in the value of shares, the debt remains.

Yet if the board are valuing the club at £180M now, however optimistic that might be, the level of debt must affect their valuation as any prospective buyer would be taking on the debt. Apparently Abramovich took on a debt of £80m or so when he acquired Chelsea, which would have affected the amount he paid for his shares.

So although I take on board what you are saying, I don't think the two things are mutually exclusive.
David Thomas
45   Posted 25/07/2010 at 02:19:14

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"£180 million that is being suggested as the asking price for the club now".


Who is suggesting the above asking price???
Jay Harris
46   Posted 25/07/2010 at 09:15:30

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you are right, in fact a company with Everton's financial performance over the last 10 years wouldn't be worth ten bob but, as we all know, football is a whole different ballgame (pardon the pun).

David, you would have to make your own enquiries with Keith Harris at Seymour Price and the £180 million was out in the media for a while too.

Now that was about 8 months ago so I don't know if it may have changed but there's no pressure on Kenwright and his buddies to sell up as the fans are pretty ambivalent while Moyes is doing so well, in fact I would suspect they'll be looking for another big payday like DK before selling up.

Michael, the accounts dont show a leveraged buyout but quite a few in local financial circles, including the financial analyst's review I posted one time, suggest there was some creative accounting which, together with the totally untrue myth put about by Kenwright that he inherited significant debt, would suggest that something went on.

As you state, it is not unusual, especially with the cost of aquiring clubs these days, for the debt to be placed on the club or conversely, as it used to be known, for the cash to be taken out of the business by the parting owner.

Liverpool and Man U were both aquired in this way.
Gavin Ramejkis
47   Posted 25/07/2010 at 12:59:10

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Matt, I've worked on a number of very large expensive central government funded projects which have the same underlying problem in that many are doomed to failure before they begin. The cynic in me however has a mortgage and bills to pay and jumped aboard knowing many items would drag on for a long duration earning me a lot of money but never see the light of day or evolve into something more sensible only after a lot of money and time is wasted.

Similarly KD and DK saw many "consultants" jump aboard the gravy train knowing the projects were doomed but still swallowing a slice of that £4m in fees before both went down the drain.
James Flynn
48   Posted 26/07/2010 at 23:03:02

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We're sort-of, kind-of leaving out the central point. Unless owning a major sports franchise will put them into the Poor House, rich folks will do anything to purchase/keep a big-time team.

Kenright is no different. Week after week for months at a time, there's TV cameras showing him in his box. Not sure why anyone here thinks it's more than that.

Owning a top-level sports team isn't about making money. It's about being on camera and (if everything works out) being on camera lifting Championship Silverware/weeping/drenched in champagne/invited to every single big event/party.

The finance IS critical. But it's never, ever about money.

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