Everton register £9.1M loss

Turnover decreased by £1.5M, net worth of -£42M (-£33M). All intangible fixed assets and even that's decreasing.

We're all doomed. Enjoy this season while it lasts because it's all bad news. How depressing and awful.

This is baffling to me but I am sure there must be someone who can clarify these seeming variances. I would ask Bill but like me he has no idea about the accounts they make no sense to him either. I see also though that we must have bought no new lawn mowers for Finch Farm as the Other Operating expenses went down slightly.

Be interesting to see a breakdown.

So if you don't do that - why do we do it with the football club where we "purchase" our entertainment, but not with the supermarket where we buy our groceries.

Looking forward to the Everton Supporters Trust in 2018 and the board meetings then - what you mean you provide single malts in the board room, blended scotch is cheaper!

We're trading at a loss so any cash we get in from transfer fees is presumably partially (if not wholly) used to cover normal operating costs, i.e. mainly players wages, given that these make up 75% of all our costs!) so its not that easy as saying we sell X player for Y amount and so can reduce the debt by Y amount. Unfortunately we actually need to sell to just cover some of our costs, let alone paying off our debt! I think we also had to give some of the Arteta money to Real Sociedad if I remember correctly (could be wrong).

Looking at the accounts, they include 'profits on disposal of plays registrations' of £14.1M – i.e. profit on sale of players. Arteta and Beckford must be the majority so we could not have made much of a profit on the billy sale (his sales prices was probably not more than his value on the books). Its scary to think what it would have meant had we not sold Arteta and Beckford! Our loss would have been about £18M higher, taking transfer fee and wages into account!

We are fed lines like we can not afford this, that or the other, I watch the games in a stadium that is past it's sell by date and see other stadia on TV and wish we could have similar or better, but alas we seem unable to do so, and the most often trotted out explanation is lack of money, so again yes, I would like to have a handle as far I can understand these things and there see to be some bodies on here who can make logical interpretations of what the heck is going on.

As for the Tesco analogy, I guess people shop there according to the depth of their own pocket, and the perceived value for money they receive, and if they don't like the value aspect they either put up, and pay or go elsewhere. IMHO. Anyway the Stella in the fridge is disappearing so I am off to the supermarket to get some more, which supermarket ? well that depends on the price, cheers Ian

Everton is exactly the same: the figures show how the club is being run. The strategy has been to maintain a level not by generating extra income, but by selling off assets which of course can only last as long as the assets remain to be sold.

So people will look at the figures to guage the overall health of the club and the validity and strength of the Board's strategy; or for signs of an alternative strategy. Sadly there are no such signs in these figures.

See you all in a few weeks.

Selling the family silver is the only thing that has kept us from drowning! The new TV deal cannot come soon enough for BK (and us!)!

Total assets less current liabilities (over the last five seasons):

13.484 M
11.128 M
12.685 M
-2.002 M
-16.022 M

That's a £30M negative swing over five years... consolidation I guess of the £5M/£6M average loss per season (or am I conflating things?)

Any way you look at it, that is surely a criminal way to run the business... but thanks to the wonderful Liverpool Echo and Blue Bill's diligent husbandry, we're all smiling and "positive" [I am getting to so fucking hate that word!] as we sail on into the great Blue Yonder...

A few loanees (with options to buy) who we can jettison easily if they don't bring us the lucrative success we need to balance the books would make much more financial sense than ramping up the wage bill for longer than six months.

Not emotionally invested in Tesco (or any of their rivals) Phil, and so not interested in whether they go bust or not as someone will still be selling groceries when they do. Also think that they are probably more financially robust than our club is at the moment.

Looking at the accounts I think we can not afford to give Moyes a new contract, it will ruin us even more .
No doubt something needs to be done in the running of the club, seems to me like it is being run by idiots, our shirt deal should be much higher, as should our main sponsor deal, but since Everton have signed long term deal with CHang then we are screwed.
Most important thing is the Kitbag deal, it is a major shitty deal for us, as we hardly see any money compared to clubs around us.

Kenwright should be sacked as chairman, he has no idea how to run a club and make a profit.

Looking pretty bleak, the only hope is the extra TV money coming in from next season, still I'm sure that'll just go on additional wages for all...

The way most football clubs are being run nowadays seems pretty unsustainable to me, the only way to improve this would be to reduce player wages. And we all know that aint going to happen

Paul (863), you're such a cynic...! (impossible not to be!)

In the end what's the point it's all been said before and nothing is going to change. I am baffled at how we can make a loss though and the thought of this club being at risk saddens me.

Without new investors we will have to face the fact that our prize assets will be sacrificed during the summer, if not sooner.

Why the fuck with all the recent sales that have gone to the Bank has this not come down?

As for players bought, their value is roughly their initial purchase price, amortised over the length of their contract (e.g. you pay 10m for a player and he signs a 4 year contract, every year into his contract his value comes down by 2.5m until its 0 when his contract runs out and he can leave on a free). If the player signs a new contract before their last has expired, then their value is increased again and then run down as their contract runs down, or something to that effect.

Basically, the intangible assets value in football club accounts is total bollocks. (e.g Baines will probably have a value of <5m in the accounts but his true market value is probably anywhere from 15-25m!). The decrease you menton is presumably due to the sales of Arteta and Billy, as well as other players contracts being 'amortised'.

thinks thats how it works anyway...

So basically, sign no players = intangible assets takes a nose dive.

Great write up from Joe yet again, he must be depressed writing that stuff every year!

We all know the state of the business, it's not worth worrying about, let me assure you they don't worry about you!

Now, given that we are making a loss, it’s hard to see how eveton can be some sort of personal pork barrel’ for Bill. To know if it is or not, I pose 3 statements which I consider to be facts, and 3 simple follow questions:

Fact 1: our ‘footballing’ wage bill appears in good shape relative to our achievement, and indeed is in finer fettle than many of our higher spending richer lesser achieving peers.
Fact 2: football finance has – as Alan sugar put it – become: a matter of prune juice economics. (i.e generalized inflation of wages as more and more money chases a finite pool of talent.
Fact 3: because of fact two it’s especially difficult to find a buyer for club.

If I am mistaken in any of these, let me know, “how and in what way” as they form basis for why I pose the following 3 questions:

Q1. How much of wage does Bill himself draw?
Q2. How much money do the board (each board member) draw out?
Q3. How much did Bill pay for his stake in EFC, and how much is he said to be charging for EFC?

What’s nice about these 3 questions is that the answer should be ‘numbers’ and numbers don’t leave much room for “opinions”.
Thanks to anyone who cares to answer. I don’t yet have an opinion on the matter, and until I can generate one based on facts, I feel compelled to give Bill the benefit of the doubt.

Fellow Evertonians, the people who reside in our board rooms have very little brotherhood sentiments for us who reside in/on the Gwladys St on a Saturday afternoon.

I'm now seeing what Moyes is up against. Things need to change, we need as a collective, need to sort out our Nemisis and that my friends is the Media. We haven't done it, (Cyber) enough. Lets start getting together and start to give that London-centric pile of shite a rough ride...

j

But you have to ask yourself how can a club which has spent next to nothing on the Stadium in 13 years and has received Sky money for the whole of the PL era, where the manager has a net spend of less than 3m - if that much - a season and where gates are reasonably good, be in such a parlous financial state.

Gavin I'm sorry but the 'Sheeple's club' just doesn't have the same ring to it!
I know the accounts will have been known to those in financial and football circles but why publish them specifically at this time is what I meant.

1. any wage bill is only in good shape if the business it is attached too can afford it
2. the finite pool of talent is global, clubs cut their cloth according to who they can afford in an effort to maintain their status - premiership quality players who they can afford
3. the difficulty to find buyers of clubs is a misnomer given anyone on here could list lots of clubs bought and sold many times since Alan Sugar sold Spurs

Your three questions

1. Bill claims not to draw a wage - who pays for his travel to and from games, his hospitality, his hangers on at games and the nice shiny Mercs? Its standard company practice, don't fall for the doesn't take a single penny blag
2. same response as 1 - to be fair to Earl he doesn't turn up for about 7 years between games
3. Bill didn't pay for his original stake Anita Gregg did - Bill brought Green (a Spurs fan) to the club as a "friend" and suddenly Earl another lifelong Spurs fan with no previous links to Everton appeared fronting a buyout on behalf of a BVI based group, Earl had no previous in the BVI but coincidentally Green did and still does. The true figure of what Bill and his fellow majority shareholders is looking for is unknown as he won't say but is reported in excess of £120m at a very minimum, a carpetbagging profit from only buying shares through borrowed money and no speculative investment on the actual business in 13 years and counting.

Phil #987 there's every likelihood no one wants to pay what Bill is asking that's a world of difference from no one wants to buy the club.

How can a board of directors vote themselves a dividend when they are posting losses year on year?

Everton Football Club is a limited company in business for the benefit of the owners to make money. No other reason. How it makes money is by providing entertainment. Makes lousy entertainment then it gets less revenue - makes good entertainment it gets more revenue (people paying to watch them, buy mechandise, rewarded for being successful), makes a profit and becomes a more valuable asset.

It is no different to any other business - and every decision made by the management and the owners will be to achieve the aims stated above. Do not you or anyone else delude themselves into believing that there are any other aims. Success is not just for success, it is because the asset is more valuable.

This is the same reason that ALL business are in existence. So my analogy with Tesco or any other brand to which we have loyalty is exactly as stated. We may have a brand loyalty (like I would only drive Fords, use Dell laptops, Nokia Mobile phones, shop at Sainsbury's, wear Addidas trainers, never eat a McD only BK) to Everton which goes deeper that these others, (yes, I was born an Evertonian, my kids are Evertonians and I will die an Evertonian) but nevertheless it is a brand to which we have loyalty.

Now for these others we never question how much they spend on various activities or whether they are financially stable - but for football clubs we believe our views matter. Simple facts are that our views will be taken into account at the same level that the board of Tesco will review our comments about their investment strategy or the number of new store openings. I agree that we may as a simple customer of Tesco (and we are really no more than customers of Everton Football Club, even though we think we are) never actually make our views on their financial strategy known to the board but nevertheless they would be taken with the same level of discussion as our views about the operating and financial strategy of Everton Football Club

Yes, we can all rant and rage and we all believe we would do a better job (and I do believe that I am one of those that would) but being able to rant and rage is all we can do - we cannot change one jot or iota of the operating or financial stategy of the company unless it sees that the customers will reduce the financial worth of the business.

So my frustration is that so many come on this forum demanding this change, complaining that the people running the business are imcompitent, but amazingly enough we have people who are worth millions and billions (through inheritence or their own business accumen) who own this business and we honestly think that we, who have been employed all our lives, are heavily in debt to building societies, banks, credit cards can tell them where they are going wrong.

So yes Andy, it does have nothing to do with us because we do not own this business, we are not the shareholders, we are not the managers, we are not even the employeers, we are just the poor customers. Yes we have invested a lot of "emotional capital" into this brand, this business - but it counts for nothing unless we withdraw that emotional capital and our support for the brand and as a result materially affect the value of the business.

It's possible that Kenwright and his mates inadequacies are the very reason "no silly fecker" wants to buy the club.

Its basically worthless as a business and massively overvalued.

Every year it gets worse and, every year, we continue to defy gravity.

And one day, if things remain as they are, we are going to be absolutely fucked.

And then you will give a shit.

We can't afford to compete at the level we do and reduce the debt.. It's one or the other.

In some ways BK is supporting David Moyes by allowing him just to maintain the status quo and continue to send us in to the mire.

Perhaps in the context of these accounts this IS David Moyes last year and then he'll move on and BK will implement the austerity measures needed to get us back on an even keel.. Enjoy it while it lasts!

Spurs' cheapest season ticket is £730 ranging up to to £1830….. if we just increased our prices to be in line with Spurs cheapest, then this would generate an additional £6-7m per year, which would almost wipe out the deficit each year.

Spurs are a team we are expected to compete with and do better than, yet as supporters we give less to our team…..

Spurs directors do not put their hands in their own pockets, they just charge more, and subsequently have greater revenue streams!

We sold £10.6m net in cash terms, dumping millions off the 'wage bill', and all we repaid in loans was £0.9m of loans by increasing the overdraft by £2m (remember the sobbing over the overdraft - what did they expect a £15m increase?).

Wages spiralled by £5.3m despite shifting arteta, Beckford, yak, turner, Vaughan, billy, Saha. Yes some players came in, but how is that increase explained? Can you imagine the state on the accounts if they hadn't of been shifted?

Everton continue to sign up new partners, puff out chests, which translates to fuck all on revenue - £268k increase on sponsorship, and a £1m decrease on other revenue (player loan fees?).

Post accounts transfer business just £1.1m receivable - Rodwell, cahill, less Mirallas, oviedo, and possibly Naismith.

So the big question how will the £10.5m non player trading loss and interest get stemmed, can revenue increase? or will the loss increase with an unsustainable wage bill?

I have seen it and history shows it, that refusing to act because you can't or won't see there is a problem, only leads to it getting worse and that at best the eventual cure is a) a lot more drastic than if tackled early, or... b) there is no cure and you die.

The irritating lump in your guts or blemish on your skin that is the Board of EFC won't go away if you ignore it.

They are making such a fucking great job of making a profit aren't they? Just because they have the legal right to do what they see fit does not make it right for the club which may be a business but is built on 135 years of football players playing for Everton supported by generations of Evertonians. If you are happy to stick your head in the sand and say so be it well shame on you.

Obviously the reward has to at least match the investment if it is not to cripple the club even if we were successful (see Leeds Utd for cautionary tale).

It would most likely take a series of such advances to promulgate long-term success, but it is not the unreasoned charge into profligate spending that you have portrayed.

It's a tough one. Tony Barrett is basically saying that one of the directors should give Moyes cash to take a gamble in Jan and go for CL qualification. There is absolutely no guarantee that it will come off, then again there is a chance it may....I guess as one of the directors is worth 1.2bn(!), a cheeky 10-20m would not leave him in the poor house. Then again it would be a 10-20m gamble!

I would not like to see us borrow against the future TV money.

Couple of bits from the accounts, regarding our facility and how we plan to plug the £10.5 million loss:

"The Directors acknowledge the need for further discussion and agreement with the bank, thereby giving rise to a degree of uncertainty on the final out come regarding bank funding. However, the Directors consider discussions with the bank to be of appropriate comfort to them in the circumstances...

The Directors have considered the uncertainty surrounding the renewal of the facilities and other inherent uncertainties and, in the event that they would be required, have identified a number of potential mitigating actions to manage any resulting forecast shortfall against current facilities including the ability within the industry to securitise additional future guaranteed revenues and flexibility around player trading."

You cant say we aint been warned!!!

Just remember that when the big Goodison smokescreen goes into operation, as with Arteta.

You see, if I shop at Sainsburys and it goes out of business, I simply move my custom to Tesco, or Morrisons, or Asda, because there's no emotional tie. However, if Everton were to go out off business, do you think for one minute I'd simply move my custom, as in support, to those shower of shite across the park?

No fucking chance !!!!

Let's just look forward to good football and pushing for a Champions league place after all Moyes will ensure we don't last long again in Europe but we'll love it whilst it lasts.

The Directors can't guarantee the outcome of discussions (that haven't yet taken place) with the banks. Consequently the auditors require a Plan B which is secure funding from elsewhere or sell players. I'd say given the current caution of banks this is pretty standard in the accounts of most football clubs.

The release of Everton's 2011/12 accounts has drawn a predictably nervy reaction from the fans, concerned about the financial stability of the club. But just how bad are the numbers? Brian Lewis delves a little deeper....

Everton Football Club has released their financials for the 2011/2012 season, and they do not paint a pretty picture to the fans. Including debt interest and player transfers, the club lost 9.1 million pounds pre tax. This was up from a 5.4 million pound loss the previous year. The one good piece of news is that the outstanding debt only rose to 46 million pounds from 44.9 last year.

As usual these numbers have brought out the fans on both sides of the aisle, but the top-level numbers do not always tell the full story. For that we have to look at some of the smaller numbers to see just how dire Everton’s position is.

Taking a look at Everton’s turnover, it is very easy to identify the problem. Income was down by 1.5 million pounds partially due to attendance. Attendance dropped to an average of 33,209 from 35,157 the previous year. This drop in attendance was worth approximately 1 million pounds in just ticket sales if the average ticket price is assumed to be 25 pounds. Factor in concessions, merchandise sales, and other income from matchday, and the drop in attendance ends up being even more severe. Thankfully attendance seems to up during the current season. The average attendance through December is approximately 36,200.

To see just how much money the club is leaving on the table, the club has a highest attendance of 39,657 this season. If Everton sold out every game last season, they would have made an additional 3.5 million pounds based on 20 home games. I decided to account for at least one home game between the League and FA Cups.

That is simply too much money to leave on the table at Everton, and the club has to take immediate steps to help boost ticket sales. Just an additional increase in gate receipts is enough to cut this year’s loses by one third.

On the TV broadcast side, the total amount of money only decreased by 100 thousand pounds, but given the increase in money the EPL receives from television contracts; it was a much larger decrease. This decrease was mainly due to a lack of television appearances this season. Everton’s poor form early in the season resulted in fewer live TV appearances, which reduced their television revenue. This year the club has already improved this due to a fantastic start that has resulted in seven television appearances to date.

Frankly there is not much the club itself can do to rectify this situation. Other than quality performances each year, EFC cannot approach television executives and make offers for live TV appearances. Thankfully the club seems set for this season and the next based on recent performances.

The biggest concerns for the club come from sponsorship and other commercial interests. Sponsorship money increased from 6.8 million to 7.1 million pounds, but commercial activities decreased from four million to three million pounds. Unfortunately these financials do not break down what makes up each of these categories, but lumping them together we can assume it includes the following income: Chang Beer sponsorship, all other ads and sponsorships with the club, Kitbag deal for merchandise, any money from Nike, any income from the Australia preseason tour, any other sources of income for the club.

Getting 10 million pounds for all of this is frankly disappointing. Given the history and current success of Everton, I would think that the club could command a much more sizeable shirt sponsor deal. Everton is an internationally known club, and thanks to stars from countries such as Australia and the US, their profile will only continue to grow. The continued partnership with Chang smacks of a club that isn’t willing to do the hard work to bring in bigger sponsors. Looking at clubs like Spurs, Aston Villa, and others of similar size, Everton should easily command 10 million pounds a year just for the shirt sponsor. Add in all the other sponsors and the club would be in much better shape.

We also have to talk about the Kitbag deal. The club gets 3 million pounds a year from Kitbag, and possibly a slice of the profits based on sales. Whatever the exact deal is, it sucks. International distribution is pretty poor compared to other clubs, especially now that our jerseys are made by Nike. Here in the US I have yet to find an Everton kit in my local stores, but I can find every other EPL Nike jersey when I go in. This is simply inexcusable, but I don’t believe it is fixable until the Kitbag deal is up in six years or so. Hopefully by then we have someone with business sense actually running the non-football side of things.

A quick bit on expenses, the wage bill rose to 79% of turnover. Obviously this is a worrying number, but if fans want to see Everton continue to perform well then high wage bills will be a fact of life. Unless we can turn into a club like Lyon which is always looking to sell young talent and develop exclusively from our own academy we will be doomed to a higher wage bill than we’d like to see. It is nice to see we managed to reduce operating expenses slightly. Even though it was slightly less than 1 million pounds, every bit matters for the club.

Up until now I haven’t talked about player trading in expenses or turnover. This is partially because the money we get from buying and selling players isn’t as cut and dried as it would seem. For example when Everton sold Jack Rodwell this past summer, the club did not receive a 12 million pound cheque the next day. Rather a contract was drawn up and we will receive the money in payments over the course of a few years. This is usually when you add up net transfer spending and then look at a clubs books, the numbers can be off by millions of pounds.

Evertonians often comment about the club having to sell players to balance the books, and while it is a factor, as explained above it isn’t as clear as you would expect. That said, the club spent 12.8 million pounds on player purchases this past year. A lot of that money undoubtedly went on purchasing Jelavic, Gibson, and Pienaar; but some of it could also have gone to paying off purchases of old players.

The good news is that the club made 14.1 million pounds on selling players. A large chunk of this came from selling Mikel Arteta to Arsenal, as well as money for selling Yakubu and Beckford. Some of the money also came from previous sales.

It has to be said that Everton’s finances aren’t great. A total debt of 46 million pounds is never a good thing for a club that only has turnover around 80-85 million pounds. The positive is that if push comes to shove, the board has the personal income to cover the debt in a worst case scenario. This isn’t like Portsmouth where the money doesn’t actually exist and it is all smoke and mirrors. The debt still should be paid down as quickly as possible. I’d say about 20 million pounds in debt is manageable for a club like Everton, and all businesses run with some amount of debt.

Thankfully the path forward seems clear even without real investment coming to the club. Improving ticket sales would cut our losses tremendously. Add in some improved sponsorship deals, and the club could actually turn a profit not even counting the uptick in tv money that comes from a quality season. The question is if the board will actually take these steps, or if they will just try to mortgage the future in an attempt to satisfy Moyes until we have to blow up the entire squad.

One born every minute.

I have a very different opinion to the more negative views. I have worked in professional sport (at the Rugby Football League – which is akin to a small Premier League team in many ways), I have a degree in Banking and Finance, and I run my own company. I consider myself relatively intelligent as well as very passionate about Everton.

My reading of the figures and the board in general is not far removed from the official line – basically that every penny possible is made available to make a team that competes as well as it can. My criticism would be that we actually spend more than we should because football is not like normal business so passion gets involved in decisions. But this has in turn led to more joy on the pitch so it's hard to criticise too strongly.

Everton is not a domestic or international brand like some other clubs, and I for one am actually grateful for that, even though it makes our commercial performance worse than some other clubs with a similar record and history. I am glad we have not sold our soul and do not have hangers on.

There are many negative commercial consequences of our being in the same city as Liverpool unfortunately, with their worldwide brand. Until we have achieved like them over a 20-year period, we will not achieve their profile. The only quick way to achieve this is the Man City or Chelsea model and I don't want that.

I think our current board are as sensible as they should be with their own money and the club's. We have to live with the fact that Everton don't have massive commercial clout. It's not the board's fault. I believe they work with what they have quite well. I wish Bill Kenwright was richer but he isn't. I don't particularly like the guy or trust him and would like to see him replaced by someone more wealthy but I don't think Everton are a commercial proposition.

You don't go in to football to make money hence why deals aren't that common. To take on a club like Everton and leave a lasting legacy will take hundreds of millions of pounds and the guys willing to do this are very few and far between (and historically the pool becomes smaller because we don't have the cache of Liverpool or Man Utd nor the worldwide reach for it to be motivated by support of Everton).

I'm not sure it's that complex anyway. In terms of transfer dealings we have to wait out things till deadline day. I've made the mistake of screaming too soon before and things worked out reasonably okay. But let's be honest, our version of okay is someone else's £30m spend in a month. I suspect this January will see two players leave, probably Gueye and Heitinga, raising just £6m or £7m at best. Moyes will get that money and along with a tiny £1m available from not getting the Belgium guy in the summer, he will perform minor miracles and we should see four, possibly five players arrive. It may not happen if the sales fail to go through. But whatever we will see a couple of loans. It's pathetic of course, it's shameful stuff when after 10 years of patient building, Moyes can see a real CL shot teetering on a knife edge.

I don't care if you're Blue Union or not. I don't care if, like me, you voted Yes for Kirkby then regretted it. I no longer care about who did what to cost us Kings Dock or who missed the fact that we didn't even fully control the land we announced we were building on at the Park End. The accounts and year-to-year finances are NOW and though I am not actually a BU member, I just don't understand how anyone thinks that we are not in desperate trouble? This is a football club and we can't shift allegiance like we can switch from Tesco to Asda. The accounts mean no real investment in the squad without a major sale in each of the next two years.

Those asking what we are going to do about the mounting losses are missing the fact that the club clearly has a plan. It will use the extra sky £70m over three years to reduce the debt to around £20m. It will cover the increase in wages and increased operating losses (offset in part by more TV game money and better ticket income) and what is left after that... probably little more than £15m.... might conceivably end up as a "war chest" of £5m pa plus sales income for player purchases.

So I can't see us going belly up any time soon. Just like I can't see us getting a good buyer in those three years. I hope I'm wrong about the good buyer but truth is that Moyes could well walk without a cup win this year or Euro qualification, preferably CL. I know people will say, "Walk where too?" And it could be that Ferguson stays or the Glaziers want Jose. And I can't see him at Chelsea or Man City so it's down to Arsenal sacking Wenger and going for Moyes rather than a foreign boss.

Without the investment, from either the current board or a buyer, it is crazy to think that we can compete on an annual net spend of £5m when nearly all other EPL clubs will somehow get more than that transfer budget from the increased Sky money. There remains just one impossible looking hope. That Moyes does it again and somehow makes it all work and we get into the CL and from there kick on and actually have at least a group stage in Season 13-14. It still feels like a daft dream but that's all we have left and dreams do come true, rarely but it happens.

God I hate January.

The figure I find disturbing is the £57m to be repaid to creditors in one year (i.e. THIS financial year. This has increased from £23m last year, where is this money going to come from?

Dennis #889, 'profits on the sale of player registrations' is just an accounting figure, I remember reading how City made a profit in their accounts from the sale of Robhino who they bought for £30m and sold for £16m. I have the link at home and will dig it out when I get back next week.

Then who's fault is it? The fans? The players?

Just who IS responsible for the commercial management of the Club if not the board or their appointed professionals?

http://www.evertonfc.com/assets/_files/documents/jan_13/efc__1357208599_Everton_Financial_Accounts_201.pdf

Obviously the balance sheet looks a little unbalanced, but this is perhaps because of the UK rules on reporting intangible assets. The Everton official report mentions something on this... "it is important to remember that the balance sheet attributes little value to home grown players such as Jack Rodwell, Leon Osman, Tony Hibbert, Victor Anichebe and Ross Barkley, and to players we have amortised over a period of time such as Baines, Jagielka and Fellaini."(pg 5.)

As can be seen in your report the intangible assets are considerably down, which I assume is the amortisation of the purchased players. The point here is what are those players worth as an intangible if valued today, for example Rodwell was sold after May 31st 2012 at $12m or something similar. That means he really should have been sitting on the balance sheet as an intangible asset at (for the sake of simplicity) about $12m.

I just wanted to point out that the UK rules on intangible assets, in a business that relies on those intangible assets, tends to mean the balance sheet is not truly representative of the business.

As far as the P+L goes it would be nice to see them at least start creating some value that can be used to invest in things such as a new stadium.

I know virtually nothing about the business world so the problem may well lie with me but Kenwright always seems to talk in terms of finding 'investment' for the club and I do wonder exactly what he means by that term. I understand that it could mean investment via a purchaser of the club like happened with City or Chelsea or it could be investment via some football philanthropist who turns up with a barrowload of dosh for Bill to give to Dave and a stadium builder. However, he never actually (to my knowledge at least) specifically states that he is looking to find a buyer. He carefully avoids any mention of finding a buyer and always speaks in terms of finding investment and I would like to know exactly what he means because if he is expecting to find an 'investor' prepared to tip over a load of dosh yet leave the whole structure (such as it is) in place he is going to have a bloody long wait.

Maybe I am putting too much emphasis on the precise words he employs but, aside from the occasional answer to a direct question, the word 'sell' does not seem to be in his vocabulary.

Perhaps you did not include the manager's salary...

The Biggest of them all!!!

But I cant think of another business that has 75% of its income paid in salaries to the staff, but I guess that's why football is so different to any other business.
I have no idea how you reduce your wage bill without selling your best players as obviously they are the highest paid employees. Now seeing the manager works miracles in the transfer market I cant believe he would stay if the club sold one of his better players.

So I don't know how to solve the problem, unless the board dispense with Moyes and sell their best players to reduce the debt completely and buy Finch Farm outright. Although how many of us would tolerate that, not many I guess and something the board couldn't even contemplate.

So for example you pay £25m for a player on a 5 year contract, instead of taking a £25m hit in the accounts as payments out you're allowed to book £5m each year over 5 years and it helps the outgoings look rosier and at the same time you get to book a £25m asset into the accounts.

Amortisation should still be included in your liabilities though so they are still in the accounts and as transfer fees are paid in installments anyway it probably represents a wash in net terms over the years, for high value players at least.

I'm sure you're right that DM knew what the published accounts would say shortly after they were prepared in May last year, why do you think he hasn't renewed his contract?

Now if only we had the money to waste on players with that level of involvement!

Point 2 goes into some depth to suggest how we could actually see a 30% increase in revenue next year.......surely if (eds??) there is credence here, then perhaps us fans need to be less defeatist and start to put pressure against some pull down as suggested in other thread.

Also, perhaps given the split about 'our bill', perhaps at some stage the protests need to start thinking about earl/woods out instead. These people are NOT blues, and are perhaps the real blockers to a sale......

But 12.1 will be an overstatement. Felli, for instance has signed a new deal so his market value actually did the opposite to what the accounts say..

Does anyone know exactly which players' values were written down?

Is it really that simple? I don't know but the reality is, if we do the unthinkable and reach the champions league group stages, then we should in one season be able to clear our debts.

Even if it means being knocked out at that point we should surely be able to increase our income streams way beyond our current levels...

Which part of £57m to be repaid to creditors by April is not clear to you?

I understood what they meant, I understood that there were trends, strengths and weaknesses. Tangibles and Intangibles and that at the end of the day a Balance Sheet was merely a snapshot of the business's activity on a particular day.

What is not shown though is what lies behind the Balance Sheet and most importantly the people running the business. They are what drives the business – its key people. The workers are obviously an important factor and it is always better to employ competent people!

At the end of the day this business that we call Everton will sink or swim as a result of good or bad management – yes, the team management is a factor but most importantly the CLUB management, ie, Bill Kenwright and his Board.

I was always told that a fish rots from its head – let's hope the HEAD at Everton is not rotting and that it's screwed on the right way!!

Time will tell.

I think our current board and management are doing quite well actually with Everton's relatively limited commercial reach. I think I have a more realistic view of the club and its management than a lot of the more vocal posters on Toffeeweb and I have real experience from my time at the Rugby Football League of the commercial workings in sport. There are not hundreds of companies out there just waiting for Everton to call them so they can hand over hundreds of millions of pounds to piggyback on our "success" and "reach". The deals Everton gets are actually punching above our weight in my opinion.

I would simply ask the question do we really want a billionaire to take over and do a Man City with us? If we do then don't hold your breath as there are only a handful of strange human beings out there that might do this (and if I was in their shoes I would pick other teams before Everton). If we want someone just a bit richer than our current board to come in and waste their personal wealth on a football club then again don't hold your breath (not many Everton fans are that rich and not many are stupid or rich enough to waste the sums needed on a hobby).

Other than those two options what are we left with? Is there anyone out there that really thinks if we had a new chairman and chief exec we could suddenly become a worldwide brand overnight and sell millions of shirts and merchandise around the world (in competition with Juventus, Real Madrid, AC Milan etc) and obtain sponsorship deals worth hundreds of millions? That is not within our reach maybe EVER.

What in my wildest dreams (bearing in mind my realism) we could have is a club that stays in the top half of the Premier League and occasionally pushes for Champions League or a trophy — and WOW, we have that at the moment because of David Moyes (with all his faults).

So basically you're telling us we're fooked, well and truly fooked.

‘The figure I find disturbing is the £57m to be repaid to creditors in one year (i.e. THIS financial year. This has increased from £23m last year, where is this money going to come from?’

Where do you get this from? The accounts show for the year before £55m (not £23m) was to be repaid to creditors within one year… So only a £2m increase (not the £34m you are trying to portray) which has come from increasing the overdraft.

How much time there is is anyone's guess. But, if you know more than me, then we're cooked, as you put it, well and truly cooked!!

We shall see!

Anyway Eric either way if the books are cooked then, as you say, we are well and truly fooked.

I am not so optimistic about the impact of the new television money. Everybody will get more money, not just ourselves, so the relative positions will be more or less the same, in terms of the English game.

That said, and taking account of the shortcomings described above regarding our "reach" and so on, it is bewildering and frustrating that clubs smaller than Everton in terms of support are able to spend more money than Everton in the transfer market. That has to be put down to "shyness" on the part of people like Robert Earl. But then again, if I weren't running the club, I doubt I would put any meaningful money into it.

As for Lord Grantchester, whose name tends to pop up in this sort of debate every once in a while, he may have 8% of the shares, and a great fortune to boot, but I think most of his money is in a trust. Besides, no-one ever saw him show much enthusiasm for the club his grandfather did so much for.

To sum it all up, I very much doubt there aren't people around who support Everton and have the business acumen – and the money – to take over the club and run it better than it has been run for the past 12 years or so. And, like many other Evertonians, I do think Bill Kenwright is a stumbling block on the road to progress on these shores.

Like somebody said in this thread, he never talks of selling his shares, just of finding 'investment'. That says it all. He wants to stay put and have somebody else foot the bill. The relative success of David Moyes's tenure has helped him along that dismal road... but, when Moyes leaves – and I fear that could be soon – he may be exposed... and the Merseyside derby may become Everton v Tranmere Rovers in the Championship.

http://www.keioc.net/index.php?mact=News%2Ccntnt01%2Cdetail%2C0&cntnt01articleid=398&cntnt01returnid=15

They would be / will be, asking the club to reduce its exposure to debt and thereby reduce the banks risk, through the sale of a player or two and evidence of tighter fiscal managment over this season. Problem being of course that any bank and any CEO / Chairman would know about the status well before the accounts are issued. We are half way through a season and the constraints will come on. Somehow any incoming players will have to be offset by some leaving and from the banks perspective if its positive then any extra monies will go to payments.

Even loans have to be paid for... who is next on the sacrificial alter?

The £23m figure comes from a post another accountant made on the accounts at the time in which he stated that there were £14m of bank loans due and £9m overdraft. A figure which stuck with me as I concluded that we would have to sell players to pay some of it back, especially at a time when the banks were concerned that our overdraft would rise to £25m.

Although some of this £57m will be rolled over courtesy of our friends in the BVI, my bet is the banks will want some money back from the sale of Rodwell, as they did with the sale of Arteta, and if we sell someone in this window.

And I also bet that the expected £20m windfall from new TV money will also be borrowed against, again courtesy of our friends in BVI.

Looking back through the accounts, the amount requiring repayment within a year has increased slightly over the last few years — 2009 (£52m), 2010 (£52m), 2011 (£55m) and 2012 (£57m) — but it is important to note the amount requiring repayment after more than a year has also fallen: 2009 (£37m), 2010 (£41m), 2011 (£32m) and 2012 (£27m).

So, if the status quo on the operation side remains the same, no additional pressure from the banks should be levied unless we take additional borrowings to facilitate increases in wages or additional transfers .

I know from my own experience that a financial institution would look at profit before tax, interest, depreciation and amortisation are deducted to get a better idea of money left to service debt. Surely that figure is needed when trying to ascertain the profitability of the club and not the loss due to deduction of depreciation and amortisation which is not cash lost to the club?

Again, I am no expert here just wondering whether we should all be hung up on the headline loss – like RBS' losses the headline figure is what is used for media purposes but when you look behind the figures things are actually a little rosier?

I'm now convinced the entire accounting process is actually a scam to make the business of EFC Co Ltd look like it is always losing money. This has become an acceptable mechanism for avoiding the payment of tax.

The task of the accountants is to come up with ways of making it look like profitable operations are actually making a loss. And as a result, we all jump up and down with angst, fearing the bubble is going to burst.

It's certainly true that the accounts of any company are full of a load of nonsense like Depreciation, Amortisation, Profit from selling players etc and that most analysts would ignore them totally.

However, when stripping these things out, Everton's accounts still show a dreadful picture. Purely from operating the business, i.e., gate + Tv income less wages and operations we lost £5m even before we look at servicing our debt and player trading i.e., our EBITDA was -£5m.

This is driven by us throwing 79% of our turnover away on wages. No business can operate in this way.

We were forced to fund this £5m deficit by borrowing from the banks and selling players. This will carry on unfortunately until we either reduce our wage bill or increase our turnover.

Happy days.

The point around the loss being real is semi valid. For those who can't make head nor tail of the accounts, look at the cash flow and net debt statement. This tells you that the basic operations and interest is being propped up by player sales, where as debt is stable, or has increased over a period of time without selling any playing staff.

They appear to be the two options open to this board to keep ticking over/standing still.

Loan sharked by one of your own directors, some say.

However, in the absence of any investment in the club whatsoever........................

The club could easily be run on a break even basis if the debt/finch farm lease was cleared, and if we had some decent revenue from a kit manufacturer and sponsor (or 2 a home sponsor and away sponsor is that possible?). A modest investment on and behind the park end again could boost revenue by a couple of million. And then there's the increase in tv money next season.

However, we behind the scenes simply just bob about on the premiership ocean waves, rudderless.