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A lack of a plan

By Thomas Williamson :  24/05/2011 :  Comments (28) :
The lack of a plan I would say, is what frustrates most of our fanbase.

Everyone seems to burble on about our debt of £45M and yet, of the established Premier League clubs, it is virtually the lowest. Liverpool's in comparison is still £123M (their debt did not get wiped out) yet they still spent £80M on players this season (i know they recouped most of it, but they still went out and spent the £80M).

The Echo labelled us the paupers club under Peter Johnson when our debt was £20-25M, yet mysteriously ignore the debt our neighbours have now: £123M... last year £350M ? why is that? In my opinion, they are brainwashing our fans into accepting we are in massive trouble and so we should accept our role as the poor relations; mediocrity is all we should accept, and we largely fall for it!!

Now given I am writing this article and would expect to be asked, "What would you do?" Well, here goes:

1. Tell all our fans to stop buying The Echo and The Daily Post, you're feeding their propaganda and condoning it.

2. Short of getting rid of the Chairman, which appears unlikely, what would the fans say if Mr Kenwright came out tomorrow and said "I have a plan: here is what we intend to do:

"Sell Yakubu £4M, Anichebe £2M, Yobo £3M, Vaughan £1.5M, Heitinga £7M, Bilyaletdinov £7.5M, Arteta £10M, Saha £3M... that is £38M for players who have either not been at the club, been on the bench, or have been rubbish this season, so the idea of letting 8 go is not really an issue as most of them have contributed little anyway.

"Now I'm giving Moyes £23M to replace these players and the other £15M goes straight off the debt, reducing our debt by ⅓. If Rodwell does not produce by January then he has an option to sell him in January for £18Mm, giving Moyes £10M and £8M off the debt."

This then means our debt is halved, we have moved on some of the high earners, saving more money, and can then plan ahead with better confidence and finances.

Whether some or all of you like this idea is not really my issue, but at the moment it's more of a plan than Everton have got, I am sure some would say that idea is useless; that is fair enough, but the alternative is drifting along like we are now, which does the fans and the club no good.

Season ticket holder 1969-2002, hope to see some of you in Washington in July.

Reader Comments

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Dave Wilson
1   Posted 24/05/2011 at 07:04:23

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A tad ambitious with some of the fees you are asking there Thomas, but yes, I would go along with the general idea.

I think we all accept things need freshening up.

Trouble is, this board doesn't do plans, you've just come up with more in ten minutes than they have in ten years.
Gavin Ramejkis
2   Posted 24/05/2011 at 07:21:42

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Elstone reported the debt as being closer to £70m and a short term removal of some of it doesn't stop it growing again. The sales of players isn't a sensible way to reduce debt unless you have an academy turning out at least one Rooney every season as, come the season after, you'll be back to square one with debt servicing rising again.

Of the players you listed, three of them are in the first team, we currently struggle to name 25 senior players. If you sell these and the loanees (who will be going anyway) you've got to replace them, the youth squad may give you one or two players not 8 and at they'd be bench warmers at that.

An obvious source of "investment" would be a share rights issue but this isn't palatable to BK, after more than a decade someone needs to ask for a straight answer as to why he and his board don't want it.
Jamie Connor
3   Posted 24/05/2011 at 09:14:07

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To issue new shares would dilute the majority percentage that certain figures have in the club and of course they wouldn't want that. Selling a third of the first team squad isn't the answer either. Yes the loanees will go maybe raising around £10m, Billy should go and hopefully Russians will pay at least £6.5 for him. I would then sacrifice Rodwell. He has either been injured or not influencing games and would represent the best saleable asset with least impact on the first team. I've no doubt rodwell will become the player we hope he will but in all honesty it won't be at Goodison. So if we can spark a bidding war for him that should be our summer strategy. The funds can then be used for at least one top draw striker, maybe someone like Defoe or same price bracket. The banks aren't calling us in so the emphasis has to be on 1st team improvement leading to league placing improvement and cup opportunities to increase revenue and profile which then increase revenue and pay the banks and bring in more players. Everything stems from the XI on the pitch.
Phil Bellis
4   Posted 24/05/2011 at 09:21:01

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Gavin...rights issue, don't get me started
Its the equivalent ogf the Board sticking its podgy fingers in its collective ears and going "na-na-na-na-I'm not listening"
Bill, I don't wnat a bloody share, just listen will ya!

Why the Board won't consider an audited rights issue should have been the number 1 question at any fan/club forum, stage-managed or otherwise
The pitiful josbsworths masquerading as journalists at the Red Echo, Post and local radio stations should be asking about this and putting other "dangerous" questions to the Board
This can be done at interview or by editorial; wouldn't it be great to get BK or Elstone on live radio to have tough questions put by a savvy, principled journalist
Sad part is, we all know no-one in the media has the balls to do a job on the club - whatever happened to David Prentice and Jacko?
Chris Bannantyne
5   Posted 24/05/2011 at 09:33:41

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It would be lovely if some geologist discovered a vast oil well or stash of gold or lost treasures directly under the pitch at Goodison. The old ground suddenly worth zillions and we could flog it for any price we care to name.

Knowing the current board though, the ground probably isn't even owned by the club anymore, and some bank or lender would claim it all.

On another note, clubs like Barcelona and Real Madrid are not owned by anyone, they are owned by the fans (apparently). How does this work? And how long have they been set up as such? Obviously they are two of the most successful and popular teams in the world, but they weren't always. If anyone has any knowledge as to how they managed to get so damned rich and successful under such a system please share. I'm also aware that both clubs have enormous debts, but they must be deemed 'serviceable'.
Trevor Lynes
6   Posted 24/05/2011 at 10:24:01

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The only way to get manageable debt is to cap salaries and transfer fees..
Allow clubs to make some profit and then we will become a viable proposition for investment.....every season there should be a transfer budget and the manager must be allowed to 'freshen' up the squad withy new blood as HE sees fit....the problem at the moment is spiralling salaries and transfer fees that frighten EFC and many other clubs out of the market.
Every business must make money to survive and if this is not allowed to happen, then administration becomes a peril.
Andy Morden
7   Posted 24/05/2011 at 12:24:51

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I think you make a telling point about the way clubs are portrayed (complicit in propaganda?) by the media. I also think you are quite right about the need to freshen things up in terms of personell. The current crop have spirit, but we are predictable as hell.

What I do find frankly crazy is that you think it is a good idea for a chairman to come out and publically broadcast the "plan".

First, by saying how much money will go on players will weaken our negotiating strategies as clubs will know just how much we have to spend and "try it on" more than they normally would for their players (as is the flow of negotiations).

Second, telling the world Rodwell will go for £18 million pounds? That is not how you rip the arm off those muppets at Man City ? you say £50 million and see how much they are willing to pay....

In short, he may have a plan (I doubt it), but making it public knowledge is not always the best thing to do...

Andy Codling
8   Posted 24/05/2011 at 12:30:27

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I don't buy the Echo anyway based on their obvious bias and generally crap journalists.
John Ford
9   Posted 24/05/2011 at 12:44:05

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It's a similar situation to the government's overstatement of our national debt. We've been in far more debt on several occasions in the past hundred years but this is ignored for political expediency and as an excuse for cuts.

Whatever the route, I think it's time to take a chance at Everton, to move away from the safety-first approach. Without investment, we will not improve to the point where we are challenging the top four places. We may be the best of the rest but 'the rest' is becoming a smaller group with Spurs and City having joined the moneyed elite. With a fair wind, we could have finished fifth this year, but even that misses out on any of the prizes worth having

In my view, we should have a plan, over two years to invest in getting the team into the Champions League places. We can only do this by competing for the best players around. We are at an advantage in a sense as we are starting from a much higher base than City and Spurs who needed to spend more as they were mediocre by comparison with Everton. We have a good core but probably need three maybe four players to be able to compete.

I'm a fan of Moyes and, like everyone connected with Everton, including I suspect Moyes himself, I'm sick of being a second-tier team with no hope beyond, at best, a couple of places higher than this season. We can handle a bigger debt, it happens elsewhere, so give us some hope and be ambitious with our club!
David Mockford
10   Posted 24/05/2011 at 13:19:23

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Thomas, what you are describing is exactly the current business plan that has been adopted over the last ten years.
Debt continues to increase because wages / costs outstrip income by c.£20m a year. Therefore every year or so look to offset debt by selling players at a profit and bring in cheaper ones.
You fundamentally seem not to understand the nature of our debt. Most PL debt is shareholder debt financed by an owner who can afford it . Ours is to banks who want their money back and want it in the next two years.

We only have a few ways to get out of this situation

Increase our income streams. Possibly more could be done here but we are hamstrung by a tired and outdated stadium, we have a relatively low demographic fan base and we have limited geographical reach. Therefore in my opinion bridging a £20m gap commercially seems highly unlikely
Reduce our cost base. Seeing as the vast majority of this is players wages there seems only one result of this, a poorer side and potential relegation.
Find an owner who will pump a wedge of cash in a la Man City. Lots of fans seemed convinced there are lots of potential buyers out there and Kenwright is blocking any sale. Highly unlikely in my modest opinion.
Hope the unsustainable financial model that is currently in operation in Premier League football comes crashing down and a more level playing field is created.

I dont wish to be the prophet of doom but the future in the short term seems more of the same. Making the most of the resources at our disposal and looking to win a trophy or at an outside chance, Champions League qualification.

But one thing about a status quo is that sooner or later it changes, think about Man City forums only ten years ago.
Alan Williams
11   Posted 24/05/2011 at 13:27:05

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John, your first statement is just amazing and you must be a civil servant/public sector worker of some sort as its obvious you have your head in the sand and just don?t get what a mess we are in, that is the country and EFC.

If 53% of people are employed by the state it?s a pretty obvious the economy will catch up with itself and that?s what?s happened and the public sector needs to be slashed as part of it, my opinion is the Government need to cut more public sector especially in the NHS of which my wife works for and the stories I get from her make BK look like Richard Branson!! Really terrible for all the people who work for the public sector and that is the sad part but like EFC you can't carry debt especially as your earnings can't cover the overhead and that?s exactly what predicament we are in at EFC Ltd. If we took on more debt and we failed to increase revenue either via silverware or sponsorship, EFC would have to sell all its players or face liquidation ? it?s not complicated at all. Debt is evil whether it?s the country or our club, well unless you?re Gordon Brown that is.

Denis Richardson
12   Posted 24/05/2011 at 13:51:00

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Price for Bily is a tad ambitious unless you can con one of the moscow clubs to launder some cash. I don't think we would get £3m for Saha as he's getting on and injured all the time. However, agree with the main theme.

Yak, Yobo not there anyway; Bily and Anichebe may as well be replaced by a couple of hungry Championship players as they offer fuck all.

I think you can easily get rid of about 4-5 'first squad' players and replace these with hungry Championship players or cheap buys from relegated clubs. There are a few players who don't really offer much but have high wages, so may as well save on the wages and move them on for younger, FASTER, hungrier types.

Replacing them would at least (a) keep the squad number from getting any lower; (b) freshen things up; (c) save some cash (lower wages to the new comers).

This would at least be something proactive rather than doing fuck all... but hey, what do I know?
Andy Codling
13   Posted 24/05/2011 at 16:24:26

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Post removed: zero Everton content. No political discussions please.
Stephen Kenny
14   Posted 24/05/2011 at 18:01:54

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If the plan was sell two valued assets who play in areas that we are well covered to increase room for manouvre commercially, I'd be more than happy.

For me, we would get takers for Jags at £10-15m and if the media are to be believed Rodwell at £15-20m.

Surely that would allow us to take back some control of our commercial operations and start to make a bit of money.
Steve Pugh
15   Posted 24/05/2011 at 18:44:06

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Here's a plan, put £100 on every season ticket and a couple of quid on every matchday ticket to bring our prices closer to the shower across the park. That should bring insome pennies.
John Ford
16   Posted 24/05/2011 at 19:53:52

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Alan... I'd reply but its obviously political... fair do's I suppose!
Nick Entwistle
17   Posted 24/05/2011 at 19:47:24

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Thomas, debt that is allowed by the banks is based on a club's ability to service that debt. Liverpool have more debt as they can afford it. Utd's which is £700m?, same situation.
We can't even afford our own so don't go pleading we need to keep up with our neighbours as we are indeed the poor relations.
Dennis Stevens
18   Posted 24/05/2011 at 19:00:51

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Thomas, you say the lack pf a plan will have us continuing to drift along. I think you're failing to see that is the plan ? to drift along until another DK type scheme emerges & then the current Board can achieve the return on their 'investment' that they're looking for. No doubt leaving the club with even higher debts than we have now.
Roberto Birquet
19   Posted 24/05/2011 at 22:24:39

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Liverpool's income is £180 million a year, Everton less than £80 million.

Furthermore, they can definitely increase their income (although it'll probably include medium-term more debt) via a new or enlarged ground. Liverpool can be put up for sale and find suitors from China to Boston. Banks know that. They can therefore afford more debt.

It will take some amazing feat for Everton to become as big or bigger than Liverpool again and afford such debt.

It may pain me, but I've known it ever since I became a Blue: in about 1977 when they won the League, the Euro Cup and gained the first of many dodgy ref decisions in their favour against us in my time.
Alan Williams
20   Posted 25/05/2011 at 08:25:51

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Sorry Alan, didn?t wish it to sound political. My own opinion actually puts my family income at risk so I was hoping to get across the personal debt issue as opposed to the political one; probably not a good analogy in hindsight. Keep it EFC in the future COYB
Chris Matheson
21   Posted 25/05/2011 at 09:07:03

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The one thing that bothers me about the debt is the level of securitisation of income streams. I may be wrong here and hope that someone will demonstrate me to be wrong. But.....some of our debt is mortgaged, but other is securitised. So we are given a wedge of money but then the loaner gets all our season ticket money for the next, say, twenty years.

It is not a debt you can pay off with another wedge of cash. The loaner wants the regular income stream.

So even if Kenwright's fairy godmother did give him a couple of hundred mil, not all the debt is eradicable. Nice one Bill!
Tony J Williams
22   Posted 25/05/2011 at 13:31:39

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"Here's a plan, put £100 on every season ticket and a couple of quid on every matchday ticket to bring our prices closer to the shower across the park. That should bring insome pennies" - Why should the mismanagement of a board fall onto the fans?

To justify an increase, you need to offer a better product. Goodison has changed once since I renewed my season ticket again 8 years ago. A lick of paint on the floor and a badge painted onto it. We have already has a 30% hike 5 years ago that resulting in the price going up over £100 for the Lower Gwladys, nothign's changed to justify a similar lift.

Here's a few simple and justified ideas for more pennies, stop the adults paying on a childrens' season ticket. Get better lager in. When it was Budweiser you had to come down with about 15 minutes to go until half time and still queue up. I cam doen with 6 minutes to go and walked straight to the front.

My personal one would be bring back the Chicken n Chilli pies, fecking gorgeous they were, always sold out.

i and many others pay enough to get in and watch the game as it is, yes it is quite low but so is the service, ale and facilities

Roberto Birquet
23   Posted 25/05/2011 at 13:50:55

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Some of our debt is mortgaged, some is securitised. So we are given a wedge of money but then the loaner gets all our season ticket money for the next, say, twenty years.
I hope that is wrong. What is your source. Securitisation is ok for the retired. Get money now, not when you die. Is someone expecting Everton to die?
Chris Matheson
24   Posted 25/05/2011 at 20:04:03

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Roberto I stand to be proved wrong, but didn't we get a loan from someone like Bear Sterns based on the securitisation of season ticket sales? I am not sure of the details and hope someone can enlighten me.
John Crook
25   Posted 26/05/2011 at 12:16:39

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Loosing 8 or 9 first team players would mean replacing them with 8 or 9 players...

There is a need to freshen up the squad but loosing 8 or 9 and bring in 8 or 9 would result in relegation. Too many new faces at once just wouldn't work.- Players need time to get used used to new players on an incremental basis ? wholesale changes would be disasterous.

Roberto Birquet
26   Posted 26/05/2011 at 14:27:12

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What a rant by Alan Williams

Here are some facts (with apologies to Sñr Benitez)
British public sector deficit: about 10% - similar to that of Greece.

But, that only accounts for difference between what govt spends and receives in one year. The total debt is almost 60% of GDP (annual size of economy).

French public debt is over 70% GDP; Germany over 80% GDP, Italy 100% GDP, Greece 135% GDP, and Japan 205% of GDP.

Only Canada in the G7 of leading industrialised countries has a lower debt as a proportion of its GDP than the UK - Fact!

Second: private sector - yes the "efficient" private sector - debt: personal debt of UK citizens: 100% of GDP; corporate and private company debt: 150% of GDP. The banks - Bust.

Banks are utterly bankrupt to a degree that: a, some of them are owned now by govt because they could not pay their bills, would have had to close and all their creditors lose money.

Other banks would have collapsed as they would have lost money that was owed to them from the collapsed institutions in the UK< the US, Ireland and elsewhere.

That would have caused a contagion that could have led to a bigger depression than the 1930s. Then it led to the far Right rising in Europe, and World war. Fact!

And we can all come up with stories of waste in public or private sector. I work for a publishing company that decided to create its own publishing software rather than use what is already on the market.

Three years later and millions upon millions of pounds wasted, a sorry system that had us all pulling our hair out - it did not even produce a user friendly site for reading news - the company has finally decided to ditch it from later this year. Fact!

This company would also have gone belly up were it not for the depreciation of pound to sterling following the Lehmans crash. It had taken on million s in debt in buying up other companies. Can't say who we are: but it is FTSE Top 100.
Roberto Birquet
27   Posted 26/05/2011 at 14:42:12

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PS our mess of country and the mess of the world was caused by debt - in the private sector.

Especially the property bubble (yes, it was a bubble and people never learn), and the private equity boom. Al created by debt in the private sector via banks, investment houses and the secruritisation markets.

House prices have not fallen further only because govt and the banks are workling together to stop it. If banks do their job and repossess properties that are not being paid for, their balance sheets will be wrecked. Either way, we are in for a long unwind of the private sector waste and debt bubble.

Indeed, take out the billionaire owners of football and their money keeping it all going, football would be a bubble just waiting to burst.
Roman Sidey
28   Posted 28/05/2011 at 00:09:25

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Haven't read the other posts so if I'm repeating anything that someone else has said, sorry. Explained quickly though, the big issue is, if we sell eight players for £38M, and Moyes (or the manager at the time ? fingers crossed) gets to spend any of it, you cannot replace eight players for anything of that amount.

The other massive flaw is in pointing out that our debt is very low. Fair enough, it is around £80M cheaper than the Shite, but they definitely have more revenue than us. I don't know what we take for a home game, but I know it wouldn't cover all the wages AND leave much for club profit. Our jersey sponsor money compares to those of the MLS (!), and we sell fuck all merchandise outside of the UK. I have only been able to buy one jersey in the last five years in Australia due to a) lack of supply and variety (not everyone wants six Cahill jersies), and b) the cost of sports apparel in Australia.

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