June (or January?) sales

A look at the Everton squad, who needs to be moved and the financial consequences of doing so

Paul The Esk 08/01/2020 33comments  |  Jump to last

“Clear the deadwood”

A charge that’s been made by many members of the press and even more Evertonians since Marcel Brands arrived from PSV Eindhoven in May 2018. It is the apparently obvious route to reducing Everton’s bloated, expensive and in many cases under or non-performing squad.

The need to clear is apparent from both a playing and a financial perspective. From a playing point of view having a large squad filled with under-performing players doesn’t assist the core players; it reduces the effectiveness of coaching, medical and other resources plus from a psychological point of view hardly produces that essential winning mentality throughout Finch Farm.

Financially, it makes little sense either. firstly there’s the issue of wages with several players on bloated contracts, resources that could be used more efficiently elsewhere. Secondly, there’s the cost of amortisation – that’s the cost applied to the accounts by spreading the transfer fee over the length of the contract.

To have some sense of the challenges facing Brands in clearing the deadwood it’s useful to break down the squad, looking at length of contracts, the cost (& therefore value) in retaining certain players, the potential player trading profits from sales and those that, absolutely, the director of football and Ancelotti want to retain.

Contracts expiring June 2020

Let’s start with those out of contract in June 2020. Players aged 23 or over are effectively free agents, permitted to seek new employment elsewhere in the final 6 months of their contract – benefiting from the Bosman ruling. Players under 23 are released free at the end of their contract (if not sold previously), subject to the club not offering a new contract to the player.

In the case of Everton, players entering the final 6 months of their contract are as follows; Baines, Niasse, Stekelenburg, Martina and Garbutt. Of these players only Baines has the potential to be offered a contract extension.

The club will benefit from losing the four remaining players off the wage bill. Niasse was moderately expensive, the others less so (Garbutt also being on loan).

From the U23 squad the following players’ contracts will expire in June 2020: Gibson, Feeney, Ouzounidis, Markelo, Evans and Phillips.

Players with contracts greater than 6 months but not featuring in the first team squad

Player Years left on contract Current Book Value £m
Kenny 2.5 0.00
Pennington 2.5 0.00
Dowell 1.5 0.00
Ramirez 1.5 2.00
Tarashaj 1.5 1.35
Bolasie 1.5 7.80

Everton still retain the registration of several players who either were purchased during the Koeman/Walsh reign or haven’t made the transition from promising youngsters to first team squad members:

All the above are currently loaned out and are due to return to Everton at the end of May 2020 (Tarashaj 2021). The obvious question will be who will be retained at the club, who will be offered for sale and who will be lent out again (if possible).

Kenny is clearly the stand out player in this list. He would command a sizable fee if sold (which would represent pure profit for the club in player trading terms) or if Sidibe is not retained, potentially brought back into the first team squad. The selling of Kenny and the acquisition of Sidibe would be a highly profitable trade.

Ramirez remains a significant expense in terms of wages and carries a relatively low amortisation charge. Given the nature of his contract it is unlikely to see him leave for a permanent transfer elsewhere, so a further loan and sharing of wage costs seem most likely. Bolasie meanwhile hits the P&L on both wages and amortisation. The annual cost of retaining him (amortisation and wages) must be greater than £9 million a year. Although Sporting of Lisbon have an option to buy it is most likely he will return to Finch Farm in the summer seeking one final loan before his contract terminates in 2021. Pound for pound one of our most expensive acquisitions relative to value ever (Sigurdsson may challenge that though).

Pennington and Dowell seem likely to be sold on the assumption neither are going to make the first team squad, although their transfer values will reflect their inability to develop once promising careers. Tarashaj’s loan is until 2021, the end of his Everton contract so is unlikely ever to return.

First team squad members

Contracts expiring in 18 months

Of the first team squad, two players have contracts expiring in June 2021. In the absence of offering contract extensions before entering the final year, the assumption must be that buyers would be sought for both players.

Schneiderlin has 18 months left on his contract and assuming someone is willing to meet his current expensive wages, with a current book value (cost minus amortisation) of £6.9 million, may still represent an opportunity to generate a player trading profit for the 2019/2020 financial year.

Walcott similarly is on high wages and has a relatively high book value of £8.68 million. The January window, which is largely a seller’s market, maybe the right time to move him on, again in accounting terms generating a useful profit for the club.

Players not wanted by Brands/Ancelotti?

Of the current first team squad those most likely to be sold or those that have proved possibly unsuitable include Tosun and Sigurdssun. Both have had disappointing Everton careers, both were expensive to acquire and continue to enjoy hugely rewarding contracts:

Player Years left on contract Current Book Value £m
Sigurdsson 2.5 30.00
Tosun 2.5 11.39

The question for Tosun is whether he is prepared to move to another club at a fee which suits Everton whilst also matching his current contract. Interest in the player from oversees also seems to stall which suggests meeting both requirements is a difficult task.

Sigurdsson may or may not be wanted by Ancelotti. There is growing frustration from Evertonians as to Sigurdsson’s effectiveness. However the size of his transfer fee and therefore his retained book value might mean there are few buyers at the value Everton would expect to attract. Sigurdsson maybe a player we need to take a loss on in order to move on. Alongside Bolasie, a hugely expensive acquisition.

Both Tosun and Sigurdsson appear to offer little in the way of player trading profits although clearly their disposal would free up value funds in terms of wages.

From all of the above it is clear that from a financial perspective, “clearing the deadwood” apart from reducing wages (thereby benefiting the P&L) does little for Everton’s player trading account.

Not the deadwood

The remainder of the squad are unlikely in anyone’s book to be considered “deadwood”. However, from a financial and possibly playing perspective there’s some opportunities to move players effectively and profitably.

Player Years left on contract Current Book Value £m
Pickford* 4.5 15.20
Keane 3.5 18.00
Mina 3.5 23.34
Holgate* 2.5 0.28
Digne 3.5 13.16
Gbamin 4.5 20.95
Gomes 4.5 20.25
Delph 2.5 7.13
Richarlison* 4.5 24.82
Iwobi 4.5 25.47
Keen 4.5 23.04
Calvert-Lewin* 3.5 0.68
Davies* 3.5 0.00
Bernard 2.5 0.00
Coleman* 2.5 0.00
Lossl 2.5 0.00
Baningime 2.5 0.00

players with contract extensions (for the purposes of calculation book value)

From the list above (and this assumes replacements are lined up, replacements which improve the squad position for position) I’d suggest Pickford, Keane, Bernard and even Tom Davies (I know….) might be attractive options to release. All it could be argued have not quite met the expectations made of them at Everton. All would command significant profits – for example Pickford at £35 million, Keane £30 million, Bernard £20 million and Davies at £25 million would produce a player trading profit of approximately £87 million. In the case of Bernard and probably Pickford substantial wage reductions also.

A thin squad requiring significant replacements & up-grades

In the event of the above we’d clearly have a very thin squad and would need significant in-comings and assuming Ancelotti wants more than just potential within his replacements, some expensive acquisitions. Profit and sustainability concerns would probably still impact the latter, but the player profits and wage reductions anticipated above would provide the room to re-shape the squad in the image of Ancelotti and Brands, and finally remove the vestiges of the disastrous 2016-2018 transfer windows.

Whatever happens, the need to dispose of players is paramount, then it’s down to the skills of Brands & Ancelotti to execute their plans well. I suspect it will be the summer before we see the fruits of their thinking, certainly on the purchase side of the ledger.

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Reader Comments (33)

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Rob Young
1 Posted 08/01/2020 at 23:19:19
Bring Kenny back, don't bother with Sidibe. Let Coleman go for free as a thank you for years of outstanding service.
Then put in a cheeky offer for the young Liverpool lad that played last Sunday.
Or, get Norwich City's right back that played at Goodison this season.
Rob Dolby
2 Posted 08/01/2020 at 23:54:00
Not an easy task moving on the unwanted players when put down in black and white.

I can't see anyone buying Sandro or Bolase. We may get peanuts for Schneiderlin, Tosun and Walcott. God knows who would buy Sigurdsson.

Regardless we need to add to the squad before selling. The midfield is non existent.

Liam Reilly
3 Posted 08/01/2020 at 23:57:21
Paul,.
Always interesting analysis but:

"Pickford at £35 million, Keane £30 million, Bernard £20 million and Davies at £25 million would produce a player trading profit of approximately £87 million."

Would be nice but, other than Pickford, I can't see any of those other players coming anywhere near those sums.

Jay Harris
4 Posted 08/01/2020 at 00:07:58
Liam I think they re very fair valuations but the question is who would buy them and can they afford them.
Steve Ferns
5 Posted 09/01/2020 at 00:23:38
Great article Paul. Very informative.
Jim Harrison
6 Posted 09/01/2020 at 04:51:46
Liam 3

I would bet we could get 20 mil for Bernard.

Davies 25 million? Dream land. Keane? Lucky to get 15 million.

John Zapa
7 Posted 09/01/2020 at 06:29:57
I would expect major player sales this January/summer in order to avoid another £100m loss making season. The sellable player assets are few, players who can generate a decent amount and can be replaced by better quality. In that bracket, I would put Davis,Bernard, Keane, DCL and Pickford. They would raise around £80 net profit accounting for losses incurred in selling others like Tosun, Bolasie and Walcott. With the ones leaving on a free transfer or out on loan to save some wages, I could see a situation with up to 8 new players coming in. The club would balance the books, at the cost of a much higher payroll. However you try to skin the cat, it's a really unsustainable situation to be in.
Stephen Campbell
8 Posted 09/01/2020 at 06:33:01
Good article Paul. but one other player who is still on the books and whose contract runs out this summer is Mo Basic.Doubt we will get anything for him probably another one to go an a free.
Stephen Campbell
9 Posted 09/01/2020 at 07:12:22
Another player out on loan whose contract runs out this summer is Mo Besic. Doubt we will get much for him. Possibly £1-2 million?
Kunal Desai
10 Posted 09/01/2020 at 08:22:10
We are stuck with these players until there contracts expire or an agreement can be reached by all parties to an earlier termination. We have over the last half a dozen windows, seen players on huge salaries, are not going anywhere other than on loan where the salary is still subsidised by Everton.
Unfortunately these reported losses will presumably be a lot more next year.
It's going take two to three seasons to wipe the slate clean
Conor McCourt
11 Posted 09/01/2020 at 09:28:58
This mess clearly wasn't created by Marcel but I feel he needs to be more creative in getting some of the squad out. Some will be difficult to move but we need to play it right.
1- January is a time for desperation for many clubs i.e. they need players to avoid relegation, surely Tosun and Niasse could be saviours for these types of teams.
2-Normally why we haven't tried to sell players is because the manager will be left 'short'. I'm thinking about Walcott and the CM particularly. If we can get these players out just do it regardless of reinforcing.
3-when we wanted Zaha for example we had at least four players Palace have shown an interest i.e. Mac,Tosun,Walcott and Lookman. We could overpay for the right acquisition by clearing deadwood. Very few will fork out big sums for our cast offs but they could be desirable in the right team/league so part exchange for players we desire should be the way to go.
Stan Schofield
12 Posted 09/01/2020 at 11:12:34
It's possible that Everton don't have the financial problems that many on here appear to assume they have. We're a midtable club, and very likely to remain so if the current squad were broadly maintained as it is.

That said, with the appointment of a top class manager in Ancelotti with experience in getting the best out of players he has at his disposal, it's possible that we will finish higher up the table than we have done on average since Moshiri came here, if not this season (because of the poor start prior to Ancelotti arriving) then next season and onwards.

Then, any player sales and new signings based on Ancelotti's plans would reflect further efforts to advance the club further.

These are just possibilities, and of course in reality we don't know how the future will unfold, although there are always many assumptions, particularly on this thread. In truth, nobody knows.

Peter Neilson
13 Posted 09/01/2020 at 11:19:04
While Brands isn't responsible for the majority of the players we need to offload he must shoulder the blame for Iwobi. Unless he has deliberately kept his talents hidden up to now and Carlo can get a tune out of him he could soon be recognised as one of the most expensive mistakes we've made.
John Zapa
14 Posted 09/01/2020 at 11:19:31
Stan, the financial reports will be released anytime in the coming days, its already prepared, they were just waiting for the right moment to release the disastrous results. There is no hiding from just how poor the financial results are, which is a true and accurate reflection of the way the club has been run for years.
Rob Dolby
15 Posted 09/01/2020 at 11:35:49
We aren't alone with this dilemma most clubs have the same issues with players on big contracts not performing.

It's all relative Utd have Sanchez, Bournemouth have Solanki, Villa Wesley, Newcastle Carroll and the other big money striker to name just a few.

Even if we did move out the driftwood there are players lining up to become the next deadwood. Iwobi takes Suggurdssons place, Delph takes Sneiderlins, walcot takes Bolases, It happens everywhere.

Results mask over a lot, City have a lot of average players but also have the most talented.

We have to find a way of recruiting and not let ffp impact us. Other clubs seem to be able to do it.

Stan Schofield
16 Posted 09/01/2020 at 11:36:11
John@14: In business, a poor financial report does not necessarily equate to 'disastrous' or similar hyperbole.

ToffeeWeb is a great site, but at the same time is often beset by folks making assumptions (and exaggerations arising from them). The devil is in the detail, and most people don't know the detail or can't assess it even when they do know it.

Conor McCourt
17 Posted 09/01/2020 at 13:38:59
Stan I think that's an ironic post in predicting us to move up the table as Ancelotti "has experience in getting the best out of his players at his disposal", then preaching about exaggerations,assumptions and details on another post.

Since his great achievement of the decima 5.5 years ago he has not got the best out of his players at his disposal.
He couldn't win the title with Real and in his two subsequent posts didn't get close to the points tallies of his predecessor.

Stan Schofield
18 Posted 09/01/2020 at 13:49:22
Conor@17: What you say would be true if I'd made the prediction you say I've made. But in fact, I didn't make any such prediction. I merely presented possibilities for consideration.
Dennis Stevens
19 Posted 09/01/2020 at 14:11:51
Is Besic still our player? I lose track of all the players sent on loan, some of whom never return!
Paul Tran
20 Posted 09/01/2020 at 14:43:24
Nothing disastrous. An interesting article showing how we'll need to box clever regarding transfers to ensure we stay compliant with FFP. All our own doing. All the more need for patience.
Jeff Holt
21 Posted 09/01/2020 at 14:51:22
£20m for Bernard? no chance!
Bill Gall
22 Posted 09/01/2020 at 15:29:14
The problem I see looking at what is going on in the transfer market, it is not only looking at get ridding at some of these so called deadwood players it is signing replacement quality players.
Everton over the last number of years has lost its reputation as an ambitious top 6 club and it is only in the eyes of its supporters who believe that just because we offer the money for top international players they will automatically come.
Quality players want recognition, as in European competitions and cup finals, none of which Everton can provide. So Everton are competing in a poor position if another club in a better position bid for a quality player that Everton are after.

It is going to take a huge turnaround of play to even reach the top 6 this season and as cup finals are out, we need to get into a position to compete in Europe to attract quality professionals or rely on the hiring of our new manager Ancelloti with his reputation to attract the type of player we need to become a top 4 club.

I don't expect to see more than 1 maybe 2 players coming in this silly January transfer month, but would like to see some movement on certain players being moved on. We cant transfer to many of the first team players named by Ancelloti as who it is rumored he would like to sell, as we don't have any one to replace all of them.

Moshiri with his financial backing was welcome and would be more welcome if his former partner joined him, but the way the league has been set up with its FFP rules it is not easy to just spend it on players, we will have to sell, mostly at a loss to buy quality.

Pat Kelly
23 Posted 09/01/2020 at 16:55:42
Never was so much owed to so many by so few.
Gerard McKean
24 Posted 09/01/2020 at 18:30:56
Paul, as always a thoughtful article and one that gives rise to much concern. The scale of the wasteful profligacy of the last few years is coming home to roost and gives the lie to those who shrugged and worried not because it was not their money.

Paul, as you write from the perspective of your own expertise in accountancy/ finance I try to draw upon my knowledge of how the club is run. Dysfunctionally is one word that springs to mind.

While LFC operate as a business with the same stealth as the Everton of the 1960’s, today's EFC is all show. John Moores’s ruthless dedication to being the best in all aspects of the club has been replaced by a vacuous embrace of a showbiz mentality.

How many RS could name their Chief Exec? In contrast we have a Chairman who could preface public meetings with “it’s showtime, folks!” as he introduces our CEO as “Li’l Miss Dynamite!” Even the shy, reserved owner can’t resist a phone-in spout on national radio.

Where is the decorum? Where is the business head to provide a check and balance on some of these crazy transfers that Paul highlights? A lot of these buys were vanity purchases and in a culture of “my way or the highway” there was no sane voice of opposition.

We are in this for the long haul unless some super accountant (isn’t that Moshiri?) can find some clever loopholes in FFP. Paul, a recent post on TW suggested that Usmanov could buy the naming rights for Goodison as a way of injecting massive revenue for (hopefully 3 or 4 years). Would that work?

Ian Smitham
25 Posted 09/01/2020 at 20:57:44
Hi, just wondered if there are any legal requirements around the timing of receipt of a companies accounts and when the AGM can take place?
Don Alexander
26 Posted 09/01/2020 at 22:30:10
From taking over and then taking yonks to dispose of Kenwright's prat Martinez, to go on to hiring Koeman and Walsh without referencing the opinion of either on the other, to then go on to hire Silva without any reference to Brands tells me only one thing; Moshiri is a footballing eejit.

He has always employed Kenwright as his one football guru, in effect. Hell, he even announced Kenwright's "enhanced" role as chairman recently. Moshiri's board also features folk of no discernible football know-how at all, just Kenwright, the greedy self-centred pseudo everyone on the planet knows him to be.

And some of us seemingly still wonder who's to personally blame for our increasing predicament.

Jerome Shields
27 Posted 10/01/2020 at 09:47:49
A very informative article which shows how difficult a job Brands has. But I have a unlying feeling that the problem is bigger than Brands remit.

This causes me not the have confidence in the current overall Management team to turn Everton around as a Club.

If Paul the Esk did a similar evaluation of infividuals who make up the overall Management team, greater effeciencies and results would become apparent and achievable.

The Culture of Everton FC will not change enough, without changes in all areas of the Club.

James Marshall
28 Posted 10/01/2020 at 10:40:15
The bottom line here is that nobody really knows whether a player is going to be a success at any club. As mentioned by some people above, we're not alone in having a bloated squad, but we do have seemingly more deadwood than some. Having said that, I don't pay as close attention to other teams squads as ours, as most of you probably don't either.

We keep changing managers, and each one of them keeps trying to cobble together a team, changing the lineup every week - we haven't had a settled team for several years now and it shows.

We lack a common goal, a sense of purpose, and that goes for supporters as well as players & management. It's time Everton put a flag in the ground and set out to play a certain way, with a certain set of players and stick to a philosophy.

What is the Everton way? I haven't got a damn clue, and I suspect neither does anyone else. Money is meaningless if you don't know what to do with it.

Iain Johnston
29 Posted 10/01/2020 at 12:59:32
Stan 16#, Yes in terms of annual turnover we are mid table club, in terms of matchday revenue, ours is less than Brighton and Southampton.

Look at Spurs, a club in terms of silverware, are not successful and are the least cash rich of the top six clubs in England. Their annual turnover even before their new stadium is twice that of ours.

Our spending reflects a club such as them rather than say Newcastle which more or less mirrors us.

This is where the problem lies. Approaching Moshiri's 3rd anniversary we have grossly overspent on wages and on the volume of journeyman players bought for huge fees.

It worried me in the summer when we pursued Zaha for the ridiculous fee we were willing to pay, for me it showed that the club hadn't learnt from both the Schniederlin, Walcott & Sigurdsson deals.

Hopefully now that we have Ancelotti, a wiser more experienced head will prevail.

I also have a very sad feeling that we'll be stuck with Sigurdsson, Schniederlin, Bolasie & Walcott until their contracts expire as their wages more than whatever transfer fee can be generated will be the stumbling block to moving them on. We'll probably wave goodbye to Richarlison before these players leave as we'll need to sell him to cover the losses.

Being linked to players such as Rodriguez and Rabiot is pie in the sky. Combined these two players earn nearly £485k per week... that would be jumping out of the frying pan and into the fire.

The new stadium is crucial for raising our profile and significantly increasing turnover only then can we realistically sustain £50m transfer fees & £145m wage budgets.


Steavey Buckley
30 Posted 10/01/2020 at 15:44:25
Players valuations are way off the mark. Valuations are largely based on demand and a bidding war.
Paul Hewitt
31 Posted 11/01/2020 at 22:32:12
Financially, we are in shit street.
Andrew Merrick
32 Posted 12/01/2020 at 21:07:35
Pat 23, very true, how times have changed.
Andy Crooks
33 Posted 13/01/2020 at 18:36:27
Keane £ 30 million. I don't think so.

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