Thoughts on Bramley-Moore Dock and the current financial conditions at Everton

A look at Everton's finances, some projections, the club's business plan and funding options as the consultation for Bramley-Moore Dock draws to a close

Paul The Esk 21/08/2019 36comments  |  Jump to last

Football has become a game of absolutes – almost everything related to football is either appallingly bad or amazingly good. Depending on which team you support, the result, how we played, who the opposition are, the performance of the referee, the atmosphere, and even the manager’s press conference usually falls into one of the two categories. There’s no middle ground.

A couple of signings, a couple of “clean sheets” and we are world-beaters. Miss out on a target and a slow start to the season, the reverse is true and both Brands and Silva are frauds.

It is in this context then that the proposed move to Bramley-Moore Dock should be viewed. The rather minimal information provided by the club has predictably been met with almost universal acclaim.

Rather like the huge political story of leaving Europe, we are being asked to buy into a whole new destination and a new commercial relationship with our club without any meaningful explanation of how we get there, what it will look like (I’m not talking about visuals) when we do, and what the costs are.

Is that harsh? Possibly, but let’s strip out the emotion for a few minutes and look at the reality. The reality of the club’s current finances, the potential cost of the Bramley-Moore Dock stadium, and the financing/funding options.

The club’s finances

Despite the £250 million invested into Everton by Farhad Moshiri, despite over £210 million of player trading profits (and still counting) between 1 June 2016 and present day, and projected accumulated revenues of over £720 million to the end of June 2020, we trade with significant losses.

Let me put some accounts and projections out there (projections for Financial Years 18-19 and 19-20. I have not adjusted the extended 18-19 Financial Year, other than to include the Vlasic sale in the 18-19 financial period. The accounts (when published) will look a little different as they will extend to the end of June 2019) The 19-20 figures use the current player trading profit which obviously could change with further disposals:

Profit & Loss (£’000’s)31-May-1731-May-1830-May-1930-Jun-20
Total income 171,330 189,159 175,000 185,000
Wages 104,655 145,479 145,000 135,000
Other operating costs 39,184 36,829 40,000 40,000
EBITDA  27,491 6,851–10,000 10,000
Amortisation 37,298 66,933 80,000 87,000
EBIT –12,302–64,050–94,000–81,000
Exceptional costs6,966 33,962 12,000 12,000
Profit on player sales 51,945 87,786 13,000 60,000
Profit before interest & tax 32,677–10,226–93,000–33,000
Net interest–2,017–2,844–2,000–2,000
Net Profit (loss) 30,660–13,070–95,000–35,000

Our current business model doesn’t work. Our cost base is way too high relative to our income. We are reliant upon player sales for our future sustainability.

Profit on player sales 51,945 87,786 13,000 60,000*

* All 2019 and 2020 figures are projected

Major permanent transfers out:

2016-17: Stones

2017-18: Lukaku, Deulofeu, Cleverley, Barkley

2018-19: Funes Mori, Klaassen, Browning

2019-20: Gueye, Lookman, Vlasic, Onyekuru, McCarthy – to date

I say that because, in the absence of a totally unforeseen change in our commercial performance, our two other principal income streams, broadcasting revenues and matchday income, will only see marginal improvements at best. Meanwhile, our wage expenditure and amortisation cost will continue to outstrip income.

Total Income 171,330 189,159 175,000 185,000
Wages104,655145,479 145,000 135,000
Amortisation37,298 66,933 80,000 87,000
Total  141,953 212,412 225,000 222,000
Squad cost to turnover ratio83%112%129%120%

*All 2019 and 2020 figures are projected

Despite all the attempts to reduce squad size, and to be fair, we currently have a net 18 players having left the club this summer, the majority have been junior players and loans. Much of the core “deadwood” inherited from the Koeman, Walsh and Allardyce era continue to provide a drag on the business. Schneiderlin, Bolasie and Walcott are contracted until 2021 and Tosun until 2022. Martina and Niasse until 2020. In terms of wages and amortisation costs, this fine cohort of players costs the club in excess of £40 million a year.

Bramley-Moore Dock Stadium

Bramley-Moore Dock - aerial night impression

So, against a background of broadly static income and huge squad costs, the club must fund a stadium with anticipated costs of between £500-600 million.

What do we know so far?

We know the stadium will be largely financed by debt, and that the proposed capacity is 52,000. Clubs move stadiums for many reasons. In Everton’s case, it is to replace the much loved but out-dated Goodison Park. It’s also a springboard for a new commercial world to operate in. Or at least, that’s how the theory goes. Commercial deals not available to us currently will become more likely with a brand new stadium in an iconic location. There’s also the “halo” effect making the club more attractive to potential new signings. However, the stadium must also be able to stand on its own two feet financially in order to be viable. Although I have spoken about this before, it is worth revisiting.

How do we generate considerably higher incomes in a stadium with a smaller capacity than might have been expected, a not entirely ambitious number of premium seats, seemingly with a commitment to affordability, yet with a substantial debt burden?

There’s a common misconception that matchday revenues are not so important given the huge broadcasting deals, European revenues, and commercial income growth. If that’s the case, why is it that the two most successful Premier League clubs from a commercial growth perspective (Tottenham and Liverpool (to a lesser extent)) have invested heavily in a new stadium and increased capacity and facilities? Both clubs are seeing huge income growth from their stadiums over and above the cost of a new build or partial redevelopment. For example, Tottenham will have a current interest cost on their existing debt of approximately £16 million per annum. That compares to an increase in matchday revenues of more than £60 million. Plans to reduce the debt to £400 million by 2022 will further reduce the interest cost of funding their development.

How likely is it that Everton can do the same?

As mentioned previously, Everton expect to borrow £350 million from a financial institution or group of institutions. The remaining funds required (£150 + million) is expected to be provided by Farhad Moshiri through equity or some form of mezzanine funding, the detail of which is not in the public domain.

Whilst interest rates are extremely low and are likely to remain low for the considerable future, it’s difficult to see Everton attracting initial funding below a rate of 5%. If that is the case, then simple maths suggest an interest cost of £17.5m a year. I will assume we make no capital repayments but look to refinance the stadium in a similar manner to Arsenal and Tottenham through a bond issue.

Current matchday receipts at Goodison Park are less than £20 million a season.

Matchday Income £000’s 17,900 17,600 14,100 16,300

Matchday income for 2017-18 is a fraction over £18 per head.

Taking the interest cost of £17.5 million, adding the last matchday income figure of £16.3 million gives a figure just under £34 million in total matchday revenues to stand still. But we surely want to increase revenues? The Kirkby stadium proposals back in 2009 only suggested even then a paltry £6 million increase on the then Goodison revenues.

Assuming that remains the base case for the new Bramley-Moore Dock stadium, what impact does that have on paying spectators to reach the figure?

I’ve argued consistently that a lower capacity Bramley-Moore Dock leads to significantly higher ticket prices. In the above scenario, matchday revenues would be £40 million per annum, less than £23 million after financing costs.

As I demonstrated, at length, here even to reach £40 million would require ticket price increases in excess of 40%.

Simply put, affordability and a relatively low-capacity stadium, funded predominantly by debt, provides marginal improvements in revenue at considerable cost to the paying spectator. As Dave Kelly said in his excellent contribution to The Athletic article earlier this week: “The fans will pay for it.”

There’s two other points I’d like to make about capacity. I’ve heard the explanations about the last X thousand seats being the most expensive and the lowest yielding. So how does that sit with a vague suggestion that capacity could at some point reach 62,000?

Surely in order to do so, much of the expense in putting in extra capacity will occur at the time of building? The size of the concourses, the number of entrance and exit points, the number of toilets etc would all have to be planned for the larger (unspecified) future capacity? Thus we will have sunk scarce resources into building a size of infrastructure which may never be used?

Secondly, what is missing from the business case for 62,000 now that will become apparent at some time in the future?

Finally there’s the point about demand. There’s huge evidence from other stadium moves of the growth in demand by moving stadium. I could argue that innovative ticket-selling strategies such as used in other sports elsewhere in the world would attract more fans to the stadium. There’s also the latent demand from Evertonians who will not go to Goodison to sit in some of the worst accommodation and with the worst views in top class professional sport.

I know the club are adamant that their professional advisors believe 52,000 to be adequate, but I’ll ask the question that I’ve asked previously – on what basis was this analysis done? Who was asked? What pricing points were tested to see when demand falls off because of affordability issues? I don’t know a single Blue that has been asked these questions despite the consultation processes.

I started by talking about football now being a game of absolutes with almost no middle ground. Whilst I am critical of the club, I’m certain they have their justifications and answers for the questions I pose.

My point is, though, that – just as all is not bad – it’s not necessarily the case that all is good.

There’s a huge weakness in our business plan that necessitates the constant trading of players to remain sustainable in the future. As things stand, Brands’s comment on 2 or 3 players coming in and out each year are largely accurate, I believe, but it will be the case of 2 or 3 significantly valuable players being sold and less expensive players bought, in order to balance the books.

Against that background, it’s difficult to see a smaller than could be Bramley-Moore Dock Stadium, largely funded by debt, making a significant financial contribution.

The club looked for as many comments on the Bramley-Moore Dock venture as is possible. There are positives of course, such as the exterior design and the bringing of life back to a desolate part of the City. The consultation will demonstrate huge public support for what is proposed. But, to conclude, I believe the current business continues to suffer from the poor decisions made in the recent past and needs serious improvement. Finally, the capacity and funding model combined will not bring the financial benefits enjoyed by our peers following their new stadiums and/or redevelopment.

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Reader Comments (36)

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Lee Paige
1 Posted 22/08/2019 at 00:35:52
A new stadium will also have a sponsorship deal that will no doubt also be bringing in a fair whack. As for seating, 52,000 is not necessarily a final figure, it's a starting point and that could very well change in the coming months once the planning permission is submitted.
Andrew Presly
2 Posted 22/08/2019 at 01:49:17
Any new stadium smaller than 60,000 in that venue is wasting everybody’s time. We can keep finishing 8th at Goodison rather than a 52k Ricoh arena.

The article highlights the sad reality that the people building this stadium don’t truly have the football club’s best interests at heart. It’s a real estate deal for them.

Karl Masters
3 Posted 22/08/2019 at 02:07:30
Usually you can go onto Stubhub a few weeks before a home game and pick from about 200 tickets for a game at Goodison.

When I looked for the Wolves game on Monday there were just THREE tickets available - family enclosure ones, so two were kids tickets, priced optimistically at £151 each!

Demand is already sky high. I have said it before and I’ll say it again, no way will 52,000 be enough for the vast majority of matches. It clearly needs to be 60,000 or very close to it. There are loads of Evertonians who don’t go now because of the poor views. There are plenty like me who don’t live close or have busy lives who only go occasionally, but would if the stadium offered better tickets and matchday family experience.

Demand will skyrocket. If the plans are to substantially raise prices, to dampen demand and get more £ per visitor, this will change the demographic of supporter and I think it’s safe to predict will change the atmosphere. After going on about replicating Goodison’s atmosphere and steep banks of seats and creating an intimidating effect to opposition players, this would be ironic to say the least.

There’s an obvious gap in the design we’ve seen so far at the back of the Away end that would easily accommodate another 4,000 or so seats. I’d suggest filling that glass wall in with seats.

Finally, it’s obvious the squad is still bloated with 4 or 5 overpaid players of no real use to Silva’s plans. I’m pleased that our net spend this Summer may come in at virtually nothing if we can offload some of these players. We can’t afford any more Klaasen, Sandro, Rooney type financial madness. With that in mind I’m still puzzled about the Zaha thinking. £80m???? Where is this money coming from?

Alan J Thompson
4 Posted 22/08/2019 at 05:44:02
Being an occasional optimist, I wonder would regularly finishing in the "Top 4" and qualifying for, not to mention being successful in, the Champions League have a great effect on income?

It may be asking a lot but that surely should be the aim of any football club, success on the field at the highest level. Or is that more than occasional optimism?

James Ebden
5 Posted 22/08/2019 at 12:14:51
The same old drivel churned out yet again. Borrrrrringggggggg

Utter speculative nonsense by someone with no access to any hard facts from inside the club, trying to undermine the club's decisions which are based on far more information. Time to retire from ToffeeWeb, just like you did from GoT.

Amit Vithlani
6 Posted 22/08/2019 at 15:07:50
Paul, I think you deserve credit for devoting time and energy to understanding the club's finances.

But I can't agree with a few of your viewpoints.

A) "Our current business model doesn't work. Our cost base is way too high relative to our income. We are reliant upon player sales for our future sustainability."

Define sustainable? For a business, it has to be first and foremost solvency and thereafter profitability. Our losses do not automatically make us sustainable; but being insolvent (assets worth less than liabilities) would. We do not have assets worth less than liabilities. Furthermore, your focus on Player Sales as a source of income provides a negative hue. Two things I would point out:

i) Everton are one of many Premier League Clubs making losses before Player Trading. In addition, the club has been doing so for the best part of 3 decades. That suggests to me that losses before player trading should not automatically raise sustainability concerns. You need to remember, the club spends a significant amount on its Academy each year. We have started to see a recoupment on that cost – the sales of Joe Williams and Antonee Robinson, although small, point to a source of valuable income and a recoupment of these costs. I expect us to sell Kieran Dowell for a reasonable sum too, whilst Jonjoe Kenny could fetch a decent price if Silva makes the move for Sidibe permanent.

ii) Ajax and PSV, amongst others, have made a habit of selling players for good profits. Both Clubs have over the years remained competitive. My belief is Brands will almost certainly pursue this model – indeed, he has crafted his reputation as someone who could sell at a profit and replace players without weakening the team. The disposals of Lookman, Vlasic and Onyekuru were an indicator that he is happy to take profit where it will not weaken the team.

iii) In real terms, we have lost money on player trading in recent times. We have, factually, been net spenders in each of the last 3 years. It is only the nature of accounting principles – which does not require the entire purchase price to be reflected – that results in a different result. Since your conclusion is based an accounting-based player trading profit, it is in fact a misleading judgement.

B) "Despite the £250 million invested into Everton by Farhad Moshiri, despite over £210 million of player trading profits (and still counting) between 1 June 2016 and present day, and projected accumulated revenues of over £720 million to the end of June 2020, we trade with significant losses." — Your analysis focusses on EBIT and not EBITDA to reach this conclusion. This is a flawed approach for a number of reasons:

i) Depreciation and Amortization are non-cash costs. These are accounting measures used as a method of valuing assets on the balance sheet. The impairments taken are then posted as a loss on the Proft & Loss. But, as they are non-cash charges, they are not reflective at all of the cash generated from operations.

ii) EBITDA, not EBIT, is the profit measure typically used to value a business (where a multiple of EBITDA represents enterprise value). EBIT is less commonly used. Why? As EBITDA is the closest measure to operating cashflow generation, that is what ultimately drives valuation. If I look at your EBITDA trend, the club is doing fine, even before taking player profits into account.

iii) You do not analyse the value of the club's assets – its players – based on market price. Digne is probably worth £50M in this market? Yet the accounting principles require Amortization of his transfer fee (based on the life of his contract), meaning his value REDUCES in our financial statements. As you know, derivatives, financial instruments and property can be devalued based on a mark-to-market approach. Due to the increase in the value of many of our players, that would create the opposite of an Amortization charge and mean we have a positive EBIT.

C) My conclusion on the portion of your article that focusses on sustainability of the club is that it is still not properly reflective of the reality. I think you need to consider the difference between non-cash costs and cash when assessing solvency, the value of the club and sustainability. You also need to factor that the club has accumulated assets whose market value exceeds its liabilities.

D) If you adjust this view, then the analysis on the stadium looks different. Furthermore, is the £500M cost of the stadium including or excluding interest? I have not seen an exact cost break down – have you? If it were included, the equity portion financing the stadium could in fact cover interest, reducing the burden on the matchday income.

E) On the revenue side of the new stadium, I think you ignore ancillary revenues from match-goers. There will be more catering facilities (for example) and, with a larger average attendance, matchday revenues should go up. A proper analysis of projected revenues would break up the streams into tickets, catering, matchday ancillaries (club merchandise etc). My feeling is it will be higher.

F) "Taking the interest cost of £17.5 million, adding the last matchday income figure of £16.3 million gives a figure just under £34 million in total matchday revenues to stand still."

i) This is again a misleading comment to make without full insight. The interest cost the club bears is towards the stadium – an asset. It includes the property value and future revenue-generating potential.

ii) So the club would not be "standing still" as a result of paying interest costs; it would be spending money on servicing debt which helped it purchase an asset whose value could likely grow.

iii) A reminder – businesses are valued on the basis of EBITDA – ie, earnings BEFORE interest (and depreciation and amortisation).

John Raftery
7 Posted 22/08/2019 at 15:10:18
Karl (3) As I understand it, the club never bid £80M for Zaha. A bid of £52M plus players was made but, after Palace made it clear they would not sell for less than £80M we did not pursue the matter. Instead, we bought Alex Iwobi, three years younger and a lot less expensive.

Buying young players and selling them at or near their peak value will continue to be part of the strategy. Increased ticket prices must also enter the equation along with additional revenues from the corporate world.

Don Alexander
8 Posted 22/08/2019 at 16:43:24
Paul makes a point that's worthy of exploration in that he knows NOBODY who's ever been "consulted" by the club in planning the new stadium. I just wonder if any TWer has ever been consulted or knows of anyone who has?

I find your reports very interesting, Paul, and your reticence to gleefully lap up the waffle coming out of the boardroom perfectly understandable. After all, we today read that Kenwright's allegedly been meaningfully re-embedded into the way the club's run.


Mike Gaynes
9 Posted 22/08/2019 at 17:00:00
Amit #6, a very thoughtful and detailed post, and as a business consultant I find much of it persuasive. I look forward to Paul's response.

Karl #3, I don't think the presence of "4 or 5 overpaid players of no real use to Silva's plans" makes the club "bloated". I think you must look at the situation in relative terms – every football club inevitably has players on their payroll who aren't contributors, because everybody makes bad signings. There's no way to avoid it. I think if you compare Everton's situation in this regard to other clubs of similar size, particularly after the offloads this summer, you might find that comparatively speaking we are not bloated at all. And, as John said, we did not go to those ridiculous heights in our Zaha pursuit – our one bid was perfectly rational.

Alan J #4, I was curious about that myself so I looked it up. The 32 clubs qualifying for the Champions League group stage collected €15.25M. Each of the 12 reaching the Champions League playoffs received €30M. These are the direct payouts from Uefa – I have no idea what kind of marketing rewards a club can generate from reaching the Champions League.

Craig Walker
10 Posted 22/08/2019 at 17:20:07
Brilliant analysis again, Paul.

I think it would be a shame if the cost of the stadium is largely passed on to the match-going fans. The club has done a good job trying to maintain ticket prices to a reasonable level and some of the club's initiatives, like the ability to spread payments for season tickets, are welcome. I think I'm right in saying that Everton were the first club to introduce such a scheme. They've also done a decent job keeping prices low for young fans who are the future paying spectators.

On capacity, I'm not too concerned with a 52,000 capacity and a view to expand this in future. I think Man City's capacity is somewhere around 55,000. Their fanbase is very similar to ours in that they share the city with illustrious neighbours. For all of City's recent success, they struggle to fill their stadium on a regular basis. I would rather see us have a sold-out stadium for all games and a flexible pricing structure for cup games if required. For me, it's the atmosphere inside the ground that is paramount rather than a nominal figure of how many seats we have sold. I think an increase of around 12,000 on what we can hold now is okay.

I know nothing on financial matters but one thing I've not managed to find out is how much money we would earn from the Goodison Park legacy initiatives. Would this earn the club revenue or would it cost the club? For example, if the land is sold to developers, then could the club return a profit from this which can then be used to fund some of the Bramley-Moore Dock project?

David McMullen
11 Posted 22/08/2019 at 20:21:04
I'm not so educated on the business side. I will say one thing though: simple maths tells you that if we had a bigger gate, say 62,000 for example, the match receipts would be more than 52,000. The only way to equal that is to charge more per head on 52,000.

I think who ever advised the club on 52,000 just haven't got it right. Other big clubs appear to make 60k the benchmark. Why are we always slow on the uptake?

As for Bramley-Moore Dock current plan. The north/south stands are limited but has no one asked, why can we not have the side stands triple tiers? Dan Meis has this in his locker – Lincoln Financial Field and Paul Brown stadiums. Also, throw a tier on the north stand.

This stems from Elstone trying to create a tight intimate (& intimidating ?) stadium, Meis has gone for small is bigger or better. Fill the survey in – tell them size matters!

David Pearl
12 Posted 22/08/2019 at 20:40:00
Walcott, Schneiderlin and Tosun are still involved in the squad. Sandro could have an accident so we can claim on the insurance... wink, wink, say no more.

Increased sponsorship, corporate hospitality, increasing prize money, young players with ever increasing values, better pies.

I'd say Moshiri knows what he's doing. With Brands and the appointment of Dan Meis, l recon we are going to be fine.

On top of that, it's conceivable that 10 or 11 players from today's squad or first 11 even could still be playing a lot of games for us when we are at Bramley-Moore Dock. Give Brands another window or two. No amount of the Olde Blue Union can make me doubt we are on the up. To the top, fellers!

Paul [The Esk]
13 Posted 22/08/2019 at 20:52:47
Amit, thank you for taking the time to respond. Without going into details of how, believe me I am very much aware of the process of valuing businesses and the uses, advantages and disadvantages of various accounting measures and techniques.

I'll answer a couple of your points. Firstly, the purpose of the article is to point out three main points:

1. The business (because of the last few years' recruitment policies) is reliant upon the sale of players to meet Premier League profitability and sustainability rules, particularly in this financial year. This scenario will continue for the foreseeable future given the likelihood that income will not increase significantly and costs will not decrease significantly.

2. The accumulated operating losses and amortisation charges are so great as to potentially break the profitability and sustainability regulations. Brands has operated well given other clubs will recognise our need to sell in order to become compliant. I also wanted to point out that the “deadwood” are likely to hang around until the end of their ludicrous contracts. Loans are as good as we can realistically hope for.

3. The stadium – the combination of a relatively low capacity, a high build cost (due to the technical requirements of the site), the affordability policy (unless there is a major U-turn) which seems very unlikely will not generate significant levels of extra revenue. Even the laughable increase promoted for Kirkby of £6m would require a 40% increase in ticket prices when the financing costs are taken into account.

If you recall in the letter Usmanov and Moshiri sent to the Arsenal Board regarding the financing of their stadium, they accused the Arsenal board of using debt as a means to increase shareholder value whilst burdening the club with interest costs (and restrictive covenants – something that no-one at Everton has yet confronted publicly), all of which would impact Arsenal's ability to compete financially with their peers.

I too, am making the simple observation that low or non-existent operating profits, low or non-existent income growth versus huge costs (cash and non-cash items), plus a stadium that does not provide the income growth enjoyed by our peers, plus a requirement to continue to sell players, is not a great business plan.

I used the word 'sustainability' in the context of becoming a major competitive force in English football and then Europe, because ultimately that's where I think we ought be. The state of the business and the model makes that event somewhat improbable in my eyes.

Thomas Lennon
14 Posted 22/08/2019 at 21:46:20
Part of the plan is clearly to add Champions League footy, which raises a significant sum as prices can rise, stadium will be full, sponsorship at a different level?

We can't guarantee participation every season, of course, and we can only see competition to get there increasing in future, but this is where we must aim. The alternative, to some risk, is mediocrity.

Steve Hogan
15 Posted 22/08/2019 at 22:17:50
I've read some interesting comments on here from people somehow casting doubt's on Paul's financial analysis, and how the proposed future expenditure outlay by EFC, will impact on our ability to spend on player recruitment.

I too, lack an in-depth knowledge of current accounting procedures, but it's fairly obvious, even to laymen like me, that we CANNOT continue to spend more than we continue to generate in real terms, either via media income or gate receipts.

As far as 'naming rights' for the new stadium goes, forget it, those halycon days are over, just ask Spurs, their stadium is up and running with no-one beating a path to their doors to pay them millions for the 'Pukka Pie' stadium.

Craig (10) sorry to dash your hopes, but the Goodison legacy project, won't earn us a cent in additional revenue I'm afraid, instead it will add even more strain on an already tight expenditure budget over the next five years.

Why on earth Everton feel the need to leave a 'lasting legacy in L4' is beyond me.

At a time of probably the most important development in the club's history, we choose to add even more financial burden, because of a policy driven by our CEO, DBB.

This at a time when ALL focus should be on building the new stadium, and the many issues we face (many of them unknown at this stage), before a brick is laid.

DBB, clearly has the 'ears' of Uncle Bill and Farhad.

Joe Corgan
16 Posted 22/08/2019 at 22:35:12
Same old article rehashed and dressed up as an “analysis”.

In actual fact it's nothing more than a repeated whinge that Bramley-Moore Dock stadium isn't bigger.

Alexander Murphy
17 Posted 22/08/2019 at 22:47:22
Presently, what we are witnessing at all levels of everything Evertonian appears to this "Common Joe" as a "Joined-Up Model". As compared to an "Kenwright's Open All Hours Cornershop".

About bloody time.

I'm delighted to see Amit respond to Paul's food for thought (I ALWYAS await Amit's comments in such matters, because he can talk technical and then translate it into terrace talk); this thread has potential to become VERY interesting. Providing it doesn't become just an accountancy jousting tourney.

For blokes like me (a Plumber), please keep using examples of how particular acccounting and financing practices can limit/benefit our club and our "Brave New World".

Would it not be really something if our Current Owner, a Accountant of some track record, would comment? Or at least have "an urchin" comment upon his behalf?

And Joe @16, 52k – Bramley-Moore Dock really is NOT big enough. That's not a whinge Joe, it's the bloody truth. Dan Meis admitted that the footprint of BMD would better suit an East-to-West pitch and stadium. So that is a major factor in the capacity. Despite the fact that there is another derelict dock to the south. And that games are staged any time between midday and almost 23:00 hours in daylight, floodlight or a combination. So actually, our plot & TV are bigger factors in the ground capacity than the current or future fanbase.

Consider, that at 52k, hosting major football events (Europa League Final, Champions League Final, Nations League Fixtures, World Cup Fixtures, European Championship Fixtures) will go to considerably bigger grounds nearby... depriving Everton Football Club Co Ltd of these possible revenues and publicity, thereby reducing our sponsors' exposure etc.

Don Alexander
18 Posted 22/08/2019 at 00:55:46
If we only build for 52k max, we'll only have to compete for events outside of our participation (huge gigs, football finals - probably and regrettably sadly – and the like) with the already bigger UK stadiums such as Wembley, Twickenham, Cardiff, Old Trafford, Murrayfield, Celtic Park, the Etihad, West Ham, Spurs, Arsenal, Newcastle and Anfield.

Maybe the appeal of a thirteenth smaller, but riverside, stadium even with almost definite difficulties in egress of any event will be alluring to folks though (despite the proposed relative modesty of the extent of lucrative corporate facilities in BMD) surrounded as it currently is for well over a mile (or two, realistically) by zero social amenities where any sane person would want to celebrate whatever caused their visit to BMD in the first place (and yes, Anfield shares that characteristic, admittedly).

Farhad Moshiri is now 64. He's squandered three years and Lord knows how much of his actual wealth (and that's not much in my jaded opinion) in his bid to personally reap huge financial rewards by acquiring our club.

My take on his alleged ambition isn't from a Press release admittedly, but why would a "very modestly" (my italics) wealthy billionaire, living in Monaco, born in the Middle East, grown wealthy beyond imagination in servicing the accounts of a major Soviet "entrepreneur", seek out lil' ol' Everton (and that's what we are in the wider world) as a place to try to make his fortune?

The guy's obviously been badly stung financially by the faith he placed in Koeman, and Allardyce, and Kenwright as far as I'm concerned, so from hereon it's a damage limitation exercise to his pocket, understandably.

Build it cheap, market it big with a few paid-for immediate mega gigs and the like to persuade a buyer as gullible as him, Moshiri, and he'll karoake Goodnight Vienna all the way to the bank (or as they say in Monaco, "Bon Nuit Vienne").

Football is so depressing isn't it, especially to Evertonians?

Terry White
19 Posted 23/08/2019 at 03:26:39
Don (#18), let me be the first to say it: "What a Sad Post".

And what a sad life you must lead to come up with it.

Tony Hill
20 Posted 23/08/2019 at 07:06:08
I agree with Paul @13 but I still think Usmanov is a factor.
Laurie Hartley
21 Posted 23/08/2019 at 12:39:28
My take on the whole stadium issue is that, if in three years time we have a new 52k stadium at Bramley Moore Dock full of Evertonians cheering on a team competing for the European spots and challenging for the domestic cups, the only people complaining will be Evertonians who can't get a ticket to the game.

Don #18 - As far as the financials are concerned, I am sure Farhad Moshiri has his eyes on a prize that doesn't involve selling the club after going to all the trouble of building a new stadium. What it is I don't know but there will be one. Men like him work on a risk versus reward basis.

Paul, about that letter from Usmanov and Moshiri:

Alisher Usmanov's letter to the Arsenal board, 5 July 2012

It seems to me they had a different plan for funding the Emirates Stadium other than long term debt. As yet, none of us know how the new stadium will be funded but I can't see Moshiri doing a complete about-turn on the principles they set out in that letter.

I am looking forward to Amit's next post on this one.

Dave Evans
22 Posted 23/08/2019 at 14:27:53
Don #18

Wealth generates an asset which brings a return. How else can a stunning new stadium be built? A whip-round in the Bullens Road?

Paul [The Esk]
23 Posted 23/08/2019 at 18:28:07
#21 Laurie thanks for your comments. The stadium will be funded in the exact manner that Usmanov and Moshiri criticised the Arsenal board for.

Approximately £350 million of senior debt, perhaps some sponsor/naming rights funding and the rest met by Moshiri either through straight equity or mezzanine funding.

Paul [The Esk]
24 Posted 23/08/2019 at 18:49:47
#21 Laurie thanks for your comments. The stadium will be funded in the exact manner that Usmanov and Moshiri criticised the Arsenal board for.

Approximately £350 million of senior debt, perhaps some sponsor/naming rights funding and the rest met by Moshiri either through straight equity or mezzanine funding.

Laurie Hartley
25 Posted 23/08/2019 at 22:53:12
Well, Paul, if that is the case, and after reading the letter again, I have to admit that is quite a turnaround.

Jerome Shields
26 Posted 24/08/2019 at 12:48:18
Paul the Esk's analysis is a true reflection of Everton's financial situation and the Stadium project in the context of the overall financial picture.

The Club is being poorly run and revenue and expenses reflect this. The whole Stadium PR project is an attempt to flush out money available, just as the development of the Everton project was after Moshiri first came on board.

Both are similar in that the decisions were and are not taken in terms of revenue and expenditure in an overall financial plan.

We all now are familiar with the fallout of the Everton development plan and this is clear!y reflected in the figures presented by Paul the Esk. His projections regarding the Stadium project are correct and the course taken by the Club in regard to the Stadium, as has been already pointed to in decisions taken, will result in a similar fallout as the Everton development plan.

It is the same people involved in the Everton development plan and the Stadium development plan, therefore the outcome will be the same.

There are only one set of figures, they can only add up one way.

Karl Masters
27 Posted 24/08/2019 at 18:10:22
Jerome - you have a real downer on this new stadium. Why?
Jerome Shields
28 Posted 24/08/2019 at 21:28:40

I think that Everton need a new Stadium like everyone else, but there are a lot of things that don't add up in the proposals that are being put forward, to make a serious attempt at providing one.

Firstly, the development of the revenues of Everton football Club are non existent, other than Premier League money and sponsorship. The gates receipts are affected by Baxendale Davies policy of affordable tickets. This has resulted in some qualifying season ticket holders getting tickets of £29. 00 per game. Overseas revenue development is neglegible. The increase in Stadium revenue on the capacity proposed will not redress , the shortfall by significantly increasing increase revenue.

The purchased site was part of the Peel Group site, the Peel Group still retain ownership of two areas in that site. The existing area could be a restriction on Stadium size and the development of the Stadium will significantly increase the value of the Peel Group s retained parts of the site. The purchase was not properly negotiated.

The site is actually a dock and probably has been piled. To prepare the site it will have to be dug out and re-piled. £100 million is the allocated cost. It will be significantly higher in cost, double that cost in my opinion.

The actual Stadium at 52, 000 capacity is way below the capacity necessary for the future funding of finances and Everton FC.

The Management of the project is currently being managed by consultants. The initial leaked plans were of some German Stadium and the recent plan with balloons and waterside vista where the original plans sexed up.

The financing of the projects is vague, Moshiri finance arrangements and the Head of Liverpool Council, who has gone quiet. No actual figures exist and no financial. plan has been provided in the context of Everton's overall financial plan.

The provision of the necessary infrastructure is vague.

The Director responsible for the Stadium Development has been announced as Ryazanter, reporting to Baxendale Davies. Pretty lightweight for a multi-million-pound building development. There is no overall Financial plan provided with the Stadium Development as part of it.

The operation of Everton s development plan after the Moshiri takeover ; Managers, Director, transfers and contracts, which wasted millions, does not inspire confidence in the present team and their ability to deliver a multi-million pound project.

I want a new Stadium built, but I am not confident, given the above and the direction Everton are heading in, which is reflected in Paul the Esk's figures. I know that many will think I am using conjecture to justify my claims, but these provide Windows on the development, which I find, happen to coincide with Paul the Esk's analysis of his projections.

I wish I could come up with a different conclusion, but my experience tells me different.

Andy Crooks
29 Posted 24/08/2019 at 22:03:22
I and a few mates would like to go to a few games a season. I have been lucky enough to have been helped by Tony and Dave but a 52,000 capacity will not make a difference to many. To me, it lacks confidence and ambition.
Jerome Shields
30 Posted 25/08/2019 at 10:00:55
Andy #29,

When they actually go about building the Stadium, it will have to be different. You could not undertake to build a Stadium with this shambles, reality will bite quickly. People who will be able to build it will take charge and the overall Finances of the club will be looked at and changes made in the Management of the Club.

What we have at the moment is the start of a site build up and Everton in the Community tours lead by Barrett-Baxendale with a blue hard top hat on and blue balloons in her hand.

Hope you get to more matches and see some improvement every time you go.

Laurie Hartley
31 Posted 26/08/2019 at 03:46:24
Jerome # 26, 28 & 30 - you wrote “I know that many will think I am using conjecture to justify my claims” - well - I do.

Now I don’t mind a bit of conjecture myself either as long as it has a positive slant, but all your “claims” seem to be directed at sabotaging the whole project and undermining the key people charged with the responsibility of delivering it.

I feel your most outrageous piece of conjecture is this one:-

“The initial leaked plans were of some German Stadium and the recent plan with balloons and waterside vista where the original plans sexed up.”

I watched the YouTube video of the presentation at the Titanic Hotel during which Dan Meis described the evolution of, and his contribution to, the current design.

If what you assert is true that would make him a plagiarist and or a liar depending upon whether the “German Stadium” design was his or some other architects. I cannot accept that that unless you can prove it with cold hard evidence.

You also question the ability of the people charged by the owner to deliver the project two of whom are Alexander Ryazantsev and Colin Chong.

Now Ryazantsev is a billionaires finance man with an impressive CV Link

In the course of a discussion I had with Paul (who's opinions I respect) on another thread Ryazantsev was one of two board members that he rated the other being Marcel Brands.

Colin Chong - Project Director
has a similarly impressive track record in civil construction which includes involvement in major sports arenas. (The Etihad and redevelopment of Old Trafford)

In my experience major construction projects are rarely delivered on time and on budget and generally speaking it is the client who bears the cost. This is usually because the builder has identified loopholes in the tender and/or contract documents through which they can claim a variation.

Given Colin Chong's experience in the construction industry I feel quite confident he would be an expert in such contractual matters and so he looks to me like a very prudent appointment to me.

Jerome Shields
32 Posted 26/08/2019 at 05:30:58
I refer you to Paul the Risks article, for a true reflections on the Stadium, The project management team is as announced in the back of beyond of the Everton FC website , with Baxendale Davies being reported to by all. Little financial information has been released on the project as Paul the Esk has said and his projections are correct. This is the only official information to go on. I give you there is alot of PR and official club announcements at the same time , but still scant financial detail or plans to increase revenues.
Peter Warren
33 Posted 26/08/2019 at 07:34:08
Andy 29# I think EFC are banking on standing areas being legal
Tom Hughes
34 Posted 27/08/2019 at 07:15:53
What Paul describes is the eternal stadium relocation conundrum for the bigger clubs.

It is the reason why to date, only 2 of the larger clubs have relocated (excluding City and to a lesser extent WHU who both got freebies). Arsenal and Spurs had the relative luxury of a vast corporate sector on their doorsteps, and a massive floating vote in the capital and home counties. So much so that both clubs could have whole corporate tiers, with multiple lounges serving these and rows of high-earning executive boxes. These on there own have been able to fund the bulk of those constructions. We don't have that luxury.

As regards judging the finances, it is very difficult as there is so little transparency. The numbers are very broadbrush, and can be quite deceptive. The externals of the proposals are smart, and the internal arrangements are clean and reasonably imposing, but it is difficult to see how it all adds up at present, as I don't really see anything that shouts £600m imo. However, there are so many unknowns that it isn't entirely inconceivable, but at that cost it does make me begin to question the viability of this site for our club.

For that outlay and at that capacity, I would be expecting a closing roof and/or moving pitch, as at Lille, which was only completed a few yrs ago at less than half that price.

The site itself can easily fit more than a 52k capacity stadium, whether or not access is sufficient might be another matter, and may yet be of much greater concern.

If the club had bought a whole development site, with a view to building multiple enabling projects to help fund the stadium, then we could perhaps begin to see the financial logic, but no-one is making those noises thus far.

£100m just to get the site "to grade" and £500m for a 52k stadium requires a few leaps of faith imo.

Brian Wilkinson
35 Posted 28/08/2019 at 00:31:48
Anyone know if we have a Boys Pen pencilled in for the new stadium?
Tony Abrahams
36 Posted 04/10/2019 at 13:58:09
There are more and more rumours circulating within the city, that Bramley-Moore Dock is not going to happen. Only rumours, possibly being spread by Liverpudlians, but a death-knell to Everton if true, because I'm not sure how the very long-suffering Evertonians would get over this, if the ground wasn't built on the docks now.

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