Everton report reduced debt but record losses

Tuesday, 14 January, 2020 47comments  |  Jump to last

Everton have announced flat revenue, significant reduction in net debt but losses of £111.8m for an extended financial year ending June 2019 at this evening's AGM.

The club's annual report shows turnover of £187.7m, very slightly down from the previous year thanks to merit payments of £24.9m and total broadcast income of £132.7m, with total commercial and sponsorship income rising 40.6% to £29.1m.

In addition, Everton's debt fell from £65.7m last year to just £9.2m but outgoings on player trading and wages, plus off-field investments in Goodison Park, Finch Farm and the Royal Liver Building meant that the club registered record losses for the 13-month period after interest and taxation.

That takes the club's losses over three years to around £94m, still under the £105m threshold mandated by Uefa's Financial Fair Play regulations.

Meanwhile, Commercial Director, Sasha Ryzantsev, said that Everton's owner, Farhad Moshiri, has increased his personal investment in the club to £350m.

A statement from CEO Denise Barrett-Baxendale said: “The set of accounts released today reflect our ambition and position as a Club in the early stages of an investment programme. We have been aware of and planned for the impact the investment would have on our short-term profitability and this is part of a long-term sustainable business plan that demonstrates our commitment to operating in a financially sustainable manner.

“Thanks to the support of our majority shareholder, Mr Moshiri, we have been able to invest significantly in our first-team squad.

“Looking forward, investment in a world-class new stadium at Bramley-Moore Dock offers us all an insight into the future of our Club and underlines our ambition to take the Club forward.”

The club's Annual General Meeting of Shareholders took place at the Liverpool Philharmonic Hall and it began with a challenge by Professor Tom Cannon to the re-appointment to the Board of Director of Football Marcel Brands. The Dutchman was duly-re-elected after a vote.

It was also announced that USM Holdings, the company part-owned by Moshiri, and his long-time business associate, Alisher Usmanov, have paid £30m for the option for the naming rights to the proposed new stadium at Bramley-Moore Dock.

Moshiri himself was absent from the AGM due to talks with a potentially significant financial backer of the stadium project.  


Reader Comments (47)

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Colin Glassar
1 Posted 14/01/2020 at 19:25:03
Peanuts!
Paul Hewitt
2 Posted 14/01/2020 at 19:26:55
How can a £111 million loss be peanuts?
Neil Copeland
3 Posted 14/01/2020 at 19:33:49
Colin, yes although the large ones I think!
Steve Ferns
4 Posted 14/01/2020 at 19:35:51
Don't worry Colin, hot on the heels of selling first option on the naming rights to the new stadium, for £30m to USM, Everton are set to announce they have sold an option to the naming rights to the new car park for £111.8m.
Jay Harris
5 Posted 14/01/2020 at 19:36:37
Wow,
That investment is looking a bit duious with Siggy worth less than half what we paid and Gomes and Gbamin could be finished at this level.

However the 30m from Usmanov will keep us in the FFP regulations and enable more "investment".

Lets hope its better done this time.

Sam Hoare
6 Posted 14/01/2020 at 19:42:31
Not good on this stuff but are the losses mainly because of the net spend that has been paid off?

Our net spend has not been enormous and we’ve cut the wage bill surely?

Steve Ferns
7 Posted 14/01/2020 at 19:45:45
Sam, wait for the Esk to write his article and ask him there. Moshiri has paid off the debts. This is as good as our creative accounting could do, so we need someone to pick through the bones and expose the real story here.
Colin Glassar
8 Posted 14/01/2020 at 19:48:47
In football terms, these days, this is nothing to fret about. We may have a clueless owner when it comes to appointing managers, but he’s a number cruncher so I’ll give him the benefit of the doubt.
Kevin Jones
9 Posted 14/01/2020 at 19:53:04
No idea either Sam, and don’t call me surely !!
Phillip Warrington
10 Posted 14/01/2020 at 20:44:02
£94m, still under the £105m threshold mandated by Uefa's Financial Fair Play regulations. So does this mean we can only spend 9m on players this season unless we sell players
Jonathan Tasker
11 Posted 14/01/2020 at 20:50:25
It’s one disaster after another
John Mckay
12 Posted 14/01/2020 at 20:56:10
Here is an idea for usmanov and Moshiri to put secret money into club. Why don't they give someone a shed load of money and get them to buy 100,000 Everton kits?
Geoff Williams
13 Posted 14/01/2020 at 21:34:45
30m doesn't seem much for the naming rights on the stadium
Jay Wood
[BRZ]

14 Posted 14/01/2020 at 21:43:40
Geoff, that's the price for the option, having first refusal, on the naming rights of the new stadium.

Not the all-in, total price USM will have to stump up.

Bobby Mallon
15 Posted 14/01/2020 at 21:53:43
Jesus stop fretting worrying will you. It’s not your money. We wanted investment we have got it it’s just been spent badly till now. Look he is not going to walk away from £350 million. The glaziers have Utd hocked to about 1.2 billion but they don’t care. We got what we wanted be happy
Jamie Crowley
16 Posted 14/01/2020 at 22:03:54
Colin @8 -

In football terms, these days, this is nothing to fret about. We may have a clueless owner when it comes to appointing managers, but he’s a number cruncher so I’ll give him the benefit of the doubt.

Now jump into your time machine and travel back to 2007:

In banking terms, these days, this is nothing to fret about. We may have a clueless CEO when it comes to [insert financial product], but he’s a number cruncher so I’ll give him the benefit of the doubt.

Cue crash.

Let's hope my cynicism is silly and ill-founded.

Jerome Shields
17 Posted 14/01/2020 at 22:21:00
As expected, we are told that Evertons expenditure is necessary to progress in the Premier League and that there is a Bright Blue Future with a news Stadium. Surprised that Ancelotti was not touted out, but with Moshiri and Usmanovs largesse, why cares if you are a Director.

Aleast Paul the Esk will be able to factor in the Moshiri paying of debt and Usnanovs input into the Stadium. Normally Paul the Esk is blind sided, by such information not being available.

No chance of them answering Paul the Esks questions, that we would all like answers too.

It's increasing looking that the larger Story that those astute enough , have put forward, that what we are looking at is a Major Development investment and policy of increasing Evertons asset value, is correct.

The money being pumped in is staggering , with a Board composed of four, with some Directors of questionable ability.

The statement that 'Thanks to the support of are majority shareholder, Moshiri, we have been able to invest in our first team squad' beggars belief as far as accountability and performance is concerned.

Fans concerns are of secondary importances.

Jay Harris
18 Posted 15/01/2020 at 00:16:11
Fret not, boys, as soon as planning is approved for the stadium development costs assumed to be around £50m can be capitalised out of that £94m so will leave us comfortably inside FFP rules.

However that is based on the assumption that planning is straightforward and does not encounter some difficult "rednose" officials.

Denis Richardson
19 Posted 15/01/2020 at 00:57:52
I guess the large loss was not unexpected given the number of duffs we've overpaid for. The profit from before was presumably thanks to the Lukaku sale in 2017.

Owners have deep pockets but our wage bill being 85% of revenue is scary. That's got to be one of the highest percentages in the league. That's simply not sustainable. Either we need to trim it down asap or start getting into Europe and finishing higher up the league.

We have so many players on massive contracts who don't even play for us costing us tens of millions a year. Only time will improve things but I wonder if we've got the capacity to sign players on high wages in the short term.

Don't think Moshris going to see most of his £450m again anytime soon.

Bill Watson
20 Posted 15/01/2020 at 01:47:59
Denis. That's why Tosun was shipped out. I expect Niasse and a few others to follow.
Kieran Kinsella
21 Posted 15/01/2020 at 03:55:58
Who is Tom Canon and why did he challenge Brands? I mean I assume he doesn’t rate him but did he elobarate?
Jay Harris
22 Posted 15/01/2020 at 04:54:30
Kieran Tom Cannon is a longstanding Evertonian who used to be Professor of Economics at Liverpool University and still may be for all I know.

He has been a critic of the club since Kenwright took over but does seem to harbour some bitterness about the way the club is run.

Alan J Thompson
23 Posted 15/01/2020 at 04:54:53
Kieran (#21); I too wonder what the grounds for objection were and assume that a lot think there is a conflict of interests if the DoF is also a Board member as it may mean him being answerable to himself.
Steve Shave
24 Posted 15/01/2020 at 08:32:36
Anyone else hear the comments made by Kenwright about how Ferguson was selected as stand-in manager? Cringe!!
Clive Rogers
25 Posted 15/01/2020 at 09:54:56
Steve, 24, yes it was all about how Bill swung it for Dunc and Bill’s excellent judgement.
Denis Richardson
26 Posted 15/01/2020 at 10:00:35
Brian 20, no doubt. And I’m sure Brands has been working none stop for about 12-18 months trying to offload a ton of deadwood. However, we’re at a stage where the low hanging fruit is gone and we now can only wait for the likes of Bolasie, Sandro, Walcott, Schneiderlin etc to run down their contracts. No other club is going to take them on the same wages.

Getting players out on loan helps but only a little as often the loanee club still pays a large chunk of the wages. We’ll still be paying some of Tosuns wages no doubt. Hopefully he bags a few for palace so we can sell him.

Given the size of the current wage bill I’m not sure how Ancelloti will be able to sign quality players In the near term (who’ll no doubt demand £100k+ /week wages), maybe in the summer when a few more are gone but will be difficult in this window. I can see the club maybe loaning in a player or two but telling Ancelloti he’s got to use what he currently has and wait till the summer for new players. He’s also not been able to see Gomez or Gbamin so both will be like ‘new signings’ for him.

Bill Watson
27 Posted 15/01/2020 at 10:16:58
Steve #24

You weren't the one cringing. You should have seen DB-B's face when she was again referred to (at least 2 or 3 times) as Little Miss Dynamite.

Heightism, sexism and patronisism all in three words!

Jimmy Hogan
28 Posted 15/01/2020 at 10:46:34
So much money invested, such little progress.
Bill Watson
29 Posted 15/01/2020 at 10:54:16
Steve #24
Only one (cringing)
James Flynn
30 Posted 15/01/2020 at 11:45:02
Bolasie, Sandro, Walcott, Schneiderlin, Besic, and Tarashaj are up in 2021, which is just about 20 million off.

Incoming players will eat up some of that, of course. As long as they are contributing, they're worth it. We're getting just above nothing from the above paycheck-eaters. For me, only Walcott contributes at all, and he's simply not that good a footballer.

An indicator of how poorly we've been run since Moyes left:

Roberto - Besic, Tarashaj

Koeman - Schneiderlin, Bolasie, Sandro

Allardyce - Walcott

Kieran Kinsella
31 Posted 15/01/2020 at 14:04:37
On the FFP is it in three year increments or is it a rolling three years? In other words does it start fresh this year or will last years losses burden us for the next two years also?
Mike Benjamin
32 Posted 15/01/2020 at 17:16:57
James. For Allardyce you missed Tosun. At least Walcott is a regular first teamer. Every club has it’s dud signings. We’ve also made some good ones, Not everyone has been doom and gloom.
Kunal Desai
33 Posted 15/01/2020 at 18:56:14
Here's a question. What is the make up of our scouting network and how does this fit into the Brands world?

With the exhorbitant costs over the last few seasons, does the whole scouting setup not need revisiting? Surely there has got to be a review of the whole scouting network and structure.

Tony McNulty
34 Posted 15/01/2020 at 21:07:28
Thinking about one or two players, the phrase "not worth a carrot" came to mind from my Merseyside youth.

Can anyone tell me if this expression still has currency on Merseyside?

Dave Abrahams
35 Posted 15/01/2020 at 21:10:21
Tony (34), Yes Tony, “ Not worth a carrot” is still top dollar on Merseyside.
Tony McNulty
36 Posted 15/01/2020 at 21:14:25
Thanks Dave. And my top carrot award goes to Schneiderlin.
John Boon
37 Posted 15/01/2020 at 21:18:10
Not completely relevant to the topic but I just have to know. Steve Ferns seems to have significant information on the inner workings of Everton's financial comings and goings. Perhaps even more than Paul The Esk, who always provides Evertonians with valuable and interesting information. I appreciate what each has to offer to keep us up to date.

As a run of the mill Evertonian who are these two knowledgable guys affiliated to? Everton Staff, ToffeeWeb, News media or some other organization. I need to know so when I give non-ToffeeWebbers information about Everton they don't give the usual cynical response such as, "Who on earth told you that?" HELP!

Daniel Thomas
38 Posted 15/01/2020 at 21:29:58
Very good question John, I’d like the answer too.
Eric Myles
39 Posted 16/01/2020 at 06:26:26
Phil #10, I believe it's a rolling 3 year loss figure, so we'd have the losses from 3 years ago plus the 9 million shortfall to play with.
Dave Abrahams
40 Posted 16/01/2020 at 13:52:55
Tony (36), just seen your post and your award couldn’t have gone to a more deserving player!!!
Brian Williams
41 Posted 16/01/2020 at 16:53:15
Interesting: https://www.liverpoolecho.co.uk/sport/football/football-news/everton-finances-stadium-ffp-news-17577483
Steve Ferns
42 Posted 16/01/2020 at 16:55:49
Brian, the problem is that we have to make a profit like the one in 2016/17 otherwise we breach FFP and this has to be next year. That's why FFP has a tight grip on us.
Dennis Stevens
43 Posted 16/01/2020 at 17:13:01
Aye, Steve. But won't planning permission being granted have an impact there?
Steve Ferns
44 Posted 16/01/2020 at 19:33:35
Not sure Dennis. All I know is we need to post a profit so the combined loss doesn’t dip below that 3 year figure. I’ll leave the intricacies to the creative accountants.
Dennis Stevens
45 Posted 16/01/2020 at 19:56:14
I thought expenditure on the new ground could be capitalised once planning permission is received, i.e. moving from one bucket to another.
Brian Williams
46 Posted 16/01/2020 at 20:04:10
It can Dennis. Money spent on infrastructure ( i.e building a new stadium) doesn't count the same as player purchases for the purposes of FFP.
Dennis Stevens
47 Posted 16/01/2020 at 20:07:46
Aye, Brian. I thought I'd read something like that.

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