After reading our clubs' set of figures recently produced, it was greeted on ToffeeWeb with dismay and another knife to the heart to all supporters, hoping for a change in fortune.
A couple of things, however, need to be taken into consideration when analysing the running of Everton FC. Uefa have the new rulings effective in 2012, firstly on homegrown players in a 25-man squad. Each club must have at least 8 homegrown players, who, from the age of 15 to 21, have spent at least 3 seasons at the club. For example this covers the likes of Osman, Hibbert, Rodwell but not Baines, Neville, Jagielka.
An excellent idea which makes a club develop players through their own youth teams or scouting networks, identifying talent, usually from other countries, a la Wenger at Arsenal.
Does this create a level playing field? The sides at the top of the Premier League could, I guess, purchase homegrown players without making too much effort to actually play them and instead heavily invest on the other 17 players. Works great if there isn?t an injury crisis but what a risk to take. As well as us being skint, this ruling also explains our regular purchases over the last two years. If so, then it?s got to be classed as prudent management towards squad building.
The second ruling from Uefa is around the requirement for a club to basically only spend what you earn. Therefore, no matter who runs the club and how deep the personal pockets may be, the club cannot spend more than turnover and increase their debt to unsustainable levels.
For example, Man City?s turnover of £87M, similar to Everton?s, was dwarfed as we know, by a spend of £500M, Chelsea, turnover of £206M, against £600M outgoings, will be a thing of the past come 2012, especially with a current annual wage bill of £144M. These figures are still classed as a debt, so the owners have transferred this into equity and shares, basically buying out everything from the club. A one-off exercise, which leaves the owners with an inflated valuation of the club, eventually generating a huge loss on any re-sale to the owner and not an ongoing debt to the club.
These two clubs would break the new ruling and, along with Aston Villa with a turnover of £84M and a wage bill alone of £70M would be excluded from any European competition upon qualification.
Arsenal's and Man Utd?s turnover are both in the region of £300M, although Utd?s rising debt would risk the financial rule set and along with their current clutch of homegrown players expiring (G Neville, Schloes and Giggs), you can see why they were reportedly after Rodwell in the same way as Rooney was bought.
Spurs, which we seem to measure ourselves against in terms of what can be achieved, generated profits between 2007-09 of £40M but due to net transfer gains of £66M. Since then, they have spent £150M and increased debts to a figure of £80M. Before the Champions League, their revenue was £113M so, if Spurs miss out this season, whilst it may not be a Leeds Utd, watch this space as Redknapp departs to England in 2012, leaving behind yet another unsustainable spending spree.
Compare their Chairman to ours, by the way: Kenwright pays himself £60k a year, Daniel Levy for three years gave himself a £200k pay rise each year. Currently now frozen at a paltry £1M yearly salary. Smaller clubs trying to compete, for example like Bolton, have a debt of £93M, higher than their revenue of £70M, and they are getting close to selling assets such as Cahill and Elmander to survive.
As for them lot across the way, I think their figures are for another day... but, with two years of no Champions League football, their revenue will show a steep decline without any reduction in wages, currently the net transfer dealings keeping the owners happy. Whilst the club is debt free, the money still went against a team of investors who are in it for profit and are not prepared to throw £200M at new players anytime soon.
In footballing terms, Arsenal's way of running the club under Wenger puts them in good stead to dominate for the rest of this decade. Man Utd fans I think need their owners to sell the club; their turnover will see them in a strong position still to buy the best. Until then, their debt prevents them from doing so. Chelsea and Man City could easily be cut adrift by their owners by the end of the decade as a level playing field makes for an unfamiliar playground to these Billionaires.
Everton, (Arsenal wannabes?) may yet see a closing of the gap on the field over the next 6 years, obviously dependent on current transfer policy into youth paying dividends. A big ask, I know, and definitely no predictions of a top four finish next season just yet!
After checking out the top line details from other club's accounts ? and forecasting the effects the Uefa rulings will have on the Billionaires?
playthings ? maybe, just maybe, our club is not the financial basket case we currently perceive it to be.
Dave Price, Posted 09/03/2011 at 16:34:57
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1 Posted 09/03/2011 at 17:25:51
The intent, if honest and true, is really admirable; a return to the level playing field. The reality, however, may be somewhat different.
I hate to be a cynic with such a promising opportunity but my fear is that these rich clubs will come up with all manner of financial schemes and loopholes to cook their books. My perception is they always have and they always will ? not just in football but throughout the murky world of big corporate business,.
I have absolutely no faith in accountants and auditors after the sub-prime fiasco and associated meltdown, but I'm sure someone in that line of business will tell me the rules have been changed to address the problems and the really bad actors (eg. Anderson COnsulting, was it?) have long since been sent packing.
So an excellent post, nevertheless... but I do have to take you to task on two phrases (hi-lited):
1) As I understand it, homegrown means being with ANY club in England and Wales (but not Scotland) during those formative years, not just your club. This is why Rodwell will command a massive fee. Also why Baines, Neville and Jagielka DO count as 'homegrown'.
2) Bill Kenwright on £60k from the club? First I've ever heard of that? Where did you get this from? The line has always been that Uncle Bill takes nothing from the club. (Except his plush air-heated seat in the Directors Box... and his lounge drinks... and his admission... and his matchday parking... and, and, and...)
2 Posted 09/03/2011 at 17:29:28
3 Posted 09/03/2011 at 17:28:57
1/ I 'm sure these Clubs with wealthy owners will find a way round it. E.g. a limited edition shirt that gets sold for £20m at an' Auction' to a mystery un-named buyer for cash. Or an Executive box that charges £50m a season or something else they can put down to 'commercial activity'.
2/ Platini is no super hero for the little man. Far from it. Appalled at how the likes of Juventus, The Milan duo, Bayern, Marseilles etc have been elbowed out of it by the English Clubs (and to a degree by Madrid and Barca) he just wants to give the other 'G18' cartel members more of a chance. 3 English Clubs out of 4 in the Champions League semi's a couple of years back was the catalyst for this, remember. He hates English clubs with a passion.
Great article though. Well done, David.
4 Posted 09/03/2011 at 18:02:13
If he were to bring financial sense to football it would arguably be one of the single greatest achievements in the game and would return the game to the fans.
I really, sincerely hope that this works out, not just for us but other clubs who can only recruit fans from their area by competing with the big boys.
5 Posted 09/03/2011 at 17:42:16
They do pretty much what they like and I thoroughly expect loopholes to be exploited by highly paid accountants employed by the clubs to ensure they pass Uefa's tests. Will Uefa pay their own accountants to question the clubs? I doubt it. Which is the most frustrating thing about football nowadays. Money talks, simple as.
6 Posted 09/03/2011 at 18:26:59
7 Posted 09/03/2011 at 18:48:05
Oil-wealthed owners can afford better lawyers and accountants than Uefa can.
Therefore these rules are most likely to affect less fortunate clubs.
8 Posted 09/03/2011 at 18:44:01
On the Kenwright salary, I read in our accounts from the previous year that 4 directors recieved £240k between them, would that include BK at 60k each? An assumption on my part on that one.
I too agree that these guys have probably had their legal finest developing a cunning plan for a while now, but it would be great if Platini had all the loopholes covered though.
9 Posted 09/03/2011 at 18:49:46
And Michael, #1, I think there is something about both homegrown players and players who come through the ranks of a club in Uefa's new rules.
But anyway, these rules will only apply for clubs playing in European competitions and, besides, the Premier League already has in place some rule regarding the minimum number of home-grown players in a club's squad.
10 Posted 09/03/2011 at 19:06:50
11 Posted 09/03/2011 at 19:50:58
12 Posted 09/03/2011 at 21:01:00
13 Posted 09/03/2011 at 20:57:33
Simon @ 10, I may be wrong but I think Platini has already begun the legislation stopping companies (whose shareholders already have an invested interest in the club) from signing sponsorship deals with clubs 'above the market price' - such as Abramovichs oil company adorning Chelsea kits or 'Roger Ramjet DVD box set' on the redshites. Though Barca's recent deal may well have set an unwanted benchmark in this department.
Either way, the G18 will come up with something.
14 Posted 09/03/2011 at 21:16:03
I know Kenwright ain't selling until he gets the money he wants for the club but has never taken cent from Everton.
15 Posted 09/03/2011 at 22:28:23
No I just meant it's sad that you are right.....no I'll start again.
What I mean is..erm..I think you ARE right and that is sad.
Oh for fuck's sake....I don't mean that, what I mean..er..is that it IS you being right that is sad, but not because it's YOU.
In other words, it's the..er..rightness of what you say being sad.....but NOT because it is you saying it.
Is that right?
Oh.....now you're just getting on my tits!
16 Posted 09/03/2011 at 22:35:43
West Ham played an illegal player and were allowed to stay up. And that's just West Ham. Do we really believe that anyone can challenge the big clubs?
They hold the clout. If they were ever threatened with action they would simply say they are leaving their respective organisations and are forming the Super League... which would leave the FA with, well, sweet FA, and Uefa with no international players for their tournaments.
In fact, this is more likely to start a breakaway Euro Super league isn't it? Or am I just being cynical?
17 Posted 09/03/2011 at 22:58:49
How dare Man City muscle in on the action!
They need to take money away from the Champions League and put a whole lot more of it into the Europa League. The Europa League will then be a stepping stone from the domestic league to the Champions League. This will bring the competition back into the sport.
18 Posted 09/03/2011 at 23:27:45
2. This will basically make the G18 stronger as nobody, not even a new Man City, will ever be able to compete.
3. If Plattini really wants to level the playing field, then we'll have a European wide wage cap (NET).
4. Man Utd will be fucked, until they start selling their own TV rights that is.
19 Posted 09/03/2011 at 23:43:53
But I don't think that rule is meant to be 100% strict. There's some tolerance, I believe, and furthermore, I think it can be successfully challenged in the courts.
20 Posted 10/03/2011 at 03:32:51
The EPL is far and beyond more popular across the planet then all other European top leagues put together. It's not even that close.
EPL calls the shots, money-wise. Not Platini, Liguini, or Scungili. EPL owners will do whatever they want (Barca and RM too).
Enjoyed this column, but fiscal responsibility being imposed on the EPL (and Barca and RM)? C'mon now.
21 Posted 10/03/2011 at 03:51:28
22 Posted 10/03/2011 at 07:48:49
Karl #3, Peterborough have just released details of their £15,000 season ticket which if you Google will give you details, I'd put money on the Sky darlings doing exactly the same with even higher prices to get around to rules. Look how much tax Barclays have paid thanks to a team of expensive legal men; expect the top guns to employ similar rule bending/loophole tactics, Everton couldn't afford Sexy Rexy (Rex Makin for the uneducated) on legal aid.
23 Posted 10/03/2011 at 09:58:42
Fifa and Uefa come out with these ideas every so often probably to remind people that their board members are still alive and taking backhanders for favours or votes. These things always look nice on paper but have a habit of having the dates put back, I don't see much different with this latest new (old) proposal.
24 Posted 10/03/2011 at 11:21:22
25 Posted 10/03/2011 at 11:31:02
The only real ways to stop this disparity of wealth would be a wages cap but, more than that, to abolish the Champions League and replace it with a European Cup format again.
It is this Champions League that has distorted wealth more than anything, even more than Sky and even more than the Premier League.
26 Posted 10/03/2011 at 12:52:21
Of course, for this to work, clubs like ours would have to give up dreaming of joining the aforementioned Oligarchs and greed merchants. But that ain't gonna happen, is it?
My other favoured outcome would be for EVERY Premier League club to be owned by a Russian Oil Billionaire or Arab Sheikh. They can't all win, and presumably would try to shoot or bribe their way to success. It would be fun to watch!
27 Posted 10/03/2011 at 13:01:25
Pure xenophobic nonsense ? don't believe everything you read in the Daily Mail. More likely what Platini is doing by attempting to create a level playing field, is securing votes from the so-called lesser lights among UEFA's members, which will ensure he gets re-elected and provide a platform for him to subsequently run for FIFA presidency.
However ? and I may be way off the mark here ? he might, just might, want to actually create a healthier competition and safeguard against clubs not living within their means. Sounds far fetched, I know. But a possibility, even if it doesn't fit in with conspiracy theories.
28 Posted 10/03/2011 at 14:23:04
For additional reading, try the Swiss Ramble?s ?Is football?s gravy train slowing down?? ? posted yesterday.
29 Posted 10/03/2011 at 15:10:43
The remuneration paid to Directors, as listed in the accounts, was salary and benefits for one Keith Wyness who, as CEO also, was a paid member of the operating staff. You'll note that for 2010, it's gone to zero, as Wyness had by that time departed for the sunnier shores of the Mediterranean.
Sorry to nit-pick what was otherwise an excellent contribution!
30 Posted 10/03/2011 at 17:01:06
Secondly, the rule regarding expenditure must not exceed income is pointless if a Russian billionaire or an Arab Sheikh simply writes out a cheque for a £100m. If he is prepared to write that amount off totally, it surely counts as income and is not a leveraged debt? I do agree that City and Chelsea are in big trouble when their backers pull out but that is a different issue.
31 Posted 10/03/2011 at 18:22:19
Not a conspiracy theory. Platini is just a sport politician. Politicians, if you haven't realised yet, are really only interestecd in themselves and their own type.
Don't be fooled. All Platini wants is for the traditional hierarchy (which he has strong links with) to be restored and for gatecrashers to be kept out ? which basically means English clubs with enough money to hoover up all the best players. By bringing it back to football-generated income, he is more likely to succeed.
And, yes, as somebody said, put himself in a good position to run Fifa when Blatter goes. A nice little career move for him if he can be seen as a hero in the the central European axis.
32 Posted 10/03/2011 at 20:40:27
The means to equality is in an equal distribution of the key asset. The finiancial asset is too readily open to challenge. A system of equal distribution of the player asset is the anwser. admittedly tricky in our open structure of promotion and relegation, (and possibly not feasible given the power weighting), but if we shifted the focus and had a similar system of the weakest clubs having access to the best players then we might achieve some parity. Sorry, just a thought and Yeh yeh, I hate pipedreams too ... any thoughts from our Amercan bros?
33 Posted 10/03/2011 at 22:34:13
The reason it is unachievable is spelt out by other contributors above; i.e. the business elite are almost untouchable in a capitalist world.
The reason it just doesn't make sense to me is that your idea of making things fairer is not fair. If spending is solely connected to revenue then the already established elite clubs that have highly devloped revenue streams from huge fanbases, premium TV rights, and corporate sponsorship, will be untouchable. Clubs like Everton will continue to be bottom feeders.
The sad truth is hard to accept. Blatter's initiative is lip service to the increasingly frustrated clubs of Europe that cannot compete due to the dominance of the Premier League as a product.
Even if you got your wish, how could you say it was fair? Leeds have been outside of the Premier League now for so long that we effectively stole one of their best players whilst they could only watch in despair. I am not sure of the exact figure but I am sure they have a similar number of fans to Everton, and they are a good traditional English club.
The day that players were no longer playing for local pride and fun this path was inextricably set, and now I can't even describe top football as a sport. It is entertainment.
If you truly want to be a sports fan then follow a school or local community team.
If you want to watch Everton or any other top club, accept the show for what it is and don't take it so seriously.
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