Financial Fair Play and Everton's transfer spending

Monday, 9 August, 2021 25comments  |  Jump to last
Football finance expert Kieran Maguire, author of The Price of Football, explains to the Echo why money is so tight this transfer window for Everton, yet how Manchester City and other Big 6 clubs are still able to splash the cash:

“If you take a look at Everton's accounts over the last few years they've had significant losses.

“While I think Farhad Moshiri has the cash to spend, it's not a case of won't spend it's more that they can't spend.

“They are very much constricted by Financial Fair Play (FFP).

“They've had some very generous sponsorship deals from Alisher Usmanov's empire which have helped them to stay within FFP but ultimately that catches up with you and they're now in a position where they've got next to no wiggle room.

“Even in a good season, Everton's matchday income is probably round about £17-18M compared to £80M for Liverpool or £100-120M for the likes of Arsenal, Tottenham Hotspur and Manchester United.

“They start off the season a long way behind and of course they have committed themselves to some fairly extensive player signings with the wages that go along with that.

“I think they've got to get people off the wage bill before they can bring people in and that's why it's made a difficult task that much harder.

“They're not the only club in this situation by any means. There are plenty of other clubs that are taking a very cautious approach to transfers this summer.

“The coronavirus will not have hit them from a FFP point of view. What the Premier League will have said is that they will effectively factor in the loss of matchday receipts and the additional costs that clubs have incurred.

“Clearly they've had to do testing and pay for the testing, and certainly at the start of the pandemic, instead of travelling on one coach they probably split them into four or five because of social distancing while where there had previously been two players in a hotel room, it became one player.

“Coronavirus costs will be taken into consideration from a Financial Fair Play point of view so I don't think that's a major issue in terms of the club's ability to sign players.

“If you're trying to sign somebody who is in the last year of his contract or potentially available on a Bosman, getting Bernard's salary off the wage bill is the perfect way of dealing with that because it's a revolving door situation, if you get one out then you can bring one in.

“Looking at the numbers, they've not got a huge amount of leeway to go out and sign big money players but if they sign a player on a long-term contract it shouldn't be too much of an issue.

“For example, if they were to sign a player for £20M and stuck him on a 5-year contract and then it's amortised over the span of the contract, working out as £4M a season.

“I think they can spend modestly but getting someone like James Rodriguez, who effectively came on a Bosman, off the wage bill would free them up to recruit elsewhere.

“They'll be doing their sums and Everton pretty much play it by the book in my opinion, they're not like some other clubs who sail a bit closer to the wind, and I think they're just trying to do the right thing.

“There's also the factor of the new stadium and while that's not ‘an iceberg on the horizon' as it's potentially a really good thing for the club, it is an ongoing issue in that they have to set money aside for that as well.

“While clubs who have moved grounds say ‘it won't stop us spending' it will stop them from spending huge sums and we saw that with both Arsenal and Spurs in terms of their periods of moving towards their new stadiums and once they got there they could move from spending modestly to a much larger scale.

“Manchester City have actually moved an awful lot of costs off their books. Sergio Aguero was on about £250k a week so, with Jack Grealish, it's one in, one out.

“Grealish is on a 6-year contract so that works out at £16M a year.

“They've also sold Jack Harrison and Angelino and I think they even got £11M in a top-up from Jadon Sancho moving from Borussia Dortmund to Manchester United.

“So they've got money coming through their transfer budget and also they've inherited the fact they won the Premier League last season and in doing that you get additional money from a) The Premier League and b) their sponsors, when doing that while they also got to the Champions League Final which is probably worth around £80M in terms of UEFA money.

“They've got a fairly big pot and to date so far this summer they've spent less than Manchester United who as well as signing Sancho, have also brought in Raphael Varane while Chelsea are about to spend around £98million on Romelu Lukaku.

“There's a focus on Manchester City because there's a bit of resentment from other clubs about their issues to do with FFP and there's also an element of jealousy because, at the end of the day, we'd all like to be able to sign Grealish!”

» Read the full article at Liverpool Echo

Reader Comments (25)

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Justin Doone
1 Posted 08/08/2021 at 23:59:43
Many clubs are financially far worse off than us.

Forget FFP – I'll take a season's absence from European competition if it means we are good enough to qualify.

Barca are in trouble. Same with many Spanish and Italian clubs. Loan a few of their players for the season with a purchase option in our favour.

I can't believe PSG have not bought the amazingly talented Kean off us. I mean... Messi, what has he ever done?

Barry Hesketh
2 Posted 09/08/2021 at 00:14:01
Justin, it's not the European FFP that's currently an issue for Everton, rather it's the Premier League's Profitability and Sustainability rules which are most pressing. I'm guilty of using the short-hand FFP in some of my posts, when I should be using the PL P&S shorthand to be more accurate.

I've just read a couple of links put out on another site that lists the players we have purchased since 2017 and it makes for extremely depressing reading for any Evertonian.

Walsh Signings

Signings After Brands appointed

How did the club manage to get things so badly wrong?

Steve Brown
3 Posted 09/08/2021 at 03:09:16
Barry, we all just have to suck it up as a club this season. The contract expiries of Delph, Tosun and the Nameless One will free up almost £250k a week in June 2022, by which time the mess of the Walsh-Koeman era will finally be cleared up.

Unless we sell Calvert-Lewin, Richarlison or Kean, or persuade a club to loan one or two of our big-earning players (we'll still have to pay part of their salaries), we are stuck in the transfer market this summer.

Alan J Thompson
4 Posted 09/08/2021 at 05:32:52
Will PSG be interested in Kean now that they look like signing Messi? Hardly likely given that Messi trousers about £2M a month which, over a year, would probably end Everton's financial problems with the Premier League.

I'd like to know how PSG's wage bill compares to Everton's reported 85% of income – or are the "Super League" clubs accounts above reproach, have they and/or Covid frightened off Uefa?

Justin Doone
5 Posted 09/08/2021 at 09:30:31
FFP and PL P&S are all trumped by Covid.

If we were to spend £500M without putting the club into financial difficulty (Director Loan) as a result of Covid and not being able to conclude transfer deals in normal market conditions we will not get punished.

This is a special season where we should be smart, brave and take advantage of our rich owners by splashing the cash on quality players.

Sometimes you need to do what's best for Everton long-term. At worst they may say we need to cut the spending next season but as long as we buy quality this season that should be easy and matter very little.

Let's write off the financial losses this season rather than writing off the team's season.

Our finances are unlikely to change that much so we will be in a similar position next.

Surely I'm not the only one who thinks this? Take advantage whilst we can.

Barry Hesketh
6 Posted 09/08/2021 at 13:16:19
The link below is obviously penned by a disgruntled Barcelona fan, but the question as to why PSG isn't being reprimanded or investigated for possible FFP breaches is a fair one.

While on the topic of PSG’s grand spending, it is also important to take a look at their revenue record. In the recently concluded 2020-21 season, the side were expected to make a net loss of 204 million euros in revenue.

This reflects poorly not just on PSG as a club but on UEFA as a governing body. Over the years, several clubs have been punished or reprimanded for far less expenditures and more comfortable figures in the accounts

Why No Sanctions for PSG?

Neil Thomas
7 Posted 09/08/2021 at 14:33:26
Oh well... another season competing with Burnley, Southampton and Crystal Palace then.
Neil Thomas
8 Posted 09/08/2021 at 14:36:17
We have gone from signing James, Allan and Doucouré, to Gray, Townsend and Longstaff. Well, I can't wait for this season to start.
Brian Wilkinson
9 Posted 09/08/2021 at 14:48:41
Justin@5, said the same myself, after the petty punishment handed out to the super league dirty dozen of just a small fine, no transfer ban or points deduction, I would go all all out to bring in 5 to six top quality players.

Worse case scenario, a seasons Euro ban, or transfer ban.

We are not in Europe, and if we get those top players in, could take a hit on a 12 Month transfer ban.

In effect we will not be doing much buisness, so this twelve Months could be written off anyway, so rather than sit back and do nothing, I would certainly go all out and land those players we need, not next season, or the season after, I would do it now, while other teams are selling at a lower price.

Take what ever hit afterwards, but once we have those players in, we can start to at least try to compete.

Roger Helm
10 Posted 09/08/2021 at 14:56:53
Neil, we are a mid-table club and have been for years. We will be competing with the clubs you mention for a good few years yet at least. If you are waiting for us to be playing at the top of the league, "where we belong", it will be a long wait.
Alan McGuffog
11 Posted 09/08/2021 at 15:02:11
Brian, I agree up to a point. However, the "game" is as bent as a dog's hind leg. Sure, the Sky Six would never be docked points. Heaven forbid!

But who better to be made an example of? Yup... the team the media hate!

Paul Smith
12 Posted 09/08/2021 at 15:08:01
TBH Neil, those first names you mention we're inconsistent last season – just what we don't need.

Having no money to spend is different than having no money at all but might work out well in giving Moshiri some space to take stock of the last 5 years. Throwing dosh about has lost us our identity and a rethink is needed, starting with a common goal and hard graft. No more projects and dreams of Champions League next year with a team that literally can't pass to each other.

A dose of realism is needed and not self-defeatism and victimising ourselves. For the first time in 5 years, I have no expectations of Top 6 and l feel calm about it. I've not given up on us taking our seat at the top table again but what we have been doing has failed, so our hand has been forced by FFP – a godsend maybe – at least Moshiri can't spunk more millions on crap.

Now all we need is someone who can actually spot a good footballer before we move in to our new home and hopefully revenues can improve, our wage bill goes down and we can spend some of Alisher's dosh.

Daniel A Johnson
13 Posted 09/08/2021 at 15:11:44
When we had money we spent £40M on Alex Iwobi.

Alex fucking Iwobi!

Let that sink in... £40M!!

For that reason alone, I don't know how Marcel Brands is still earning his millions at EFC.

Probably a good thing we have returned to the frugal buys of the past because, as a club in its current set-up, we can't be trusted to spend wisely.

Sam Hoare
14 Posted 09/08/2021 at 15:15:11
Bad recruitment was always likely to catch up on us. Buying bad players and overspending on decent players. Another season of mid table awaits probably.
Brian Williams
15 Posted 09/08/2021 at 15:33:53
Daniel #13.

The club didn't spend £40M on Iwobi, mate. They paid an initial fee of between £27M and £28M with performance, success and appearance-related add-ons.

So, if the initial fee was £27M, that will now be up to £27M and a fiver!

Phil (Kelsall) Roberts
16 Posted 09/08/2021 at 15:39:58
A number of years ago, I wrote to Sir Philip Carter in support of moving out of Goodison Park because the amount we received from gate receipts was so low especially in comparison to the prices charged by the London clubs and their corporate boxes.

He was good enough to reply and agreed and that the planned new stadium (Kings Dock?) would significantly increase the corporate income and that would allow us to compete.

The problem has been around for a long time.

Jay Harris
17 Posted 09/08/2021 at 16:07:13
Thanks for that research it does highlight the extremely poor transfer business done by Walsh and the relatively successful business done by Brands with the only questionable Brands acquisition being Iwobi.

My only question is do the Prem take into account any current cost cutting that can be demonstrated or is it strictly the previous 3 years filed accounts.

Brian Harrison
18 Posted 09/08/2021 at 16:11:28
I think there are 2 issues at play first is as stated in the original post our gate receipts per game are between £17 and £18 million, compared to £80 million per game for our neighbours and £120 million for Arsenal, Spurs and Man Utd. So we get £102 million less than these 3 per game then that's multiplied 19 times for home games, so trying to compete with these clubs financially is going to leave us exposed.

Moshiri has indeed allowed his managers to spend somewhere in the region of £450 million, but all we have done is pay massively more in transfer fees and wages than these players were worth. So when everyone realises we are paying massive wages for a lot of mediocre players its quite obvious why we cant shift these underperforming overpaid prima donors. Many of our squad earn similar wages to what the top 4 clubs are paying their players, but nowhere near the same quality. So we have ended up in a position were Tosun, Delph, Iwobi, Gomes or Allan will only leave if they are offered similar amounts to what we pay them but thats extremely unlikely, so they will stay till practically the last day of their contracts.

Then they will demand a signing on fee from the buying club, which will then offset the loss of wages they will get from their new club. Quite simply we will struggle to get rid, until these players decide to leave, and I am sure in Iwobis case he wont get offered anywhere near the money we pay him so he will be here for a few more years just like Besic and Bolasie did.

Barry Hesketh
19 Posted 09/08/2021 at 17:40:33
I agree that we have given too many players far too much in salaries, however, I disagree that we are paying similar amounts to the top four, but I do agree we've moved closer to them, unfortunately, we haven't the necessary income to support such outgoings.

2021 Everton Wages

These figures aren't necessarily accurate, but give a good guide to the costs.

Charles Brewer
20 Posted 09/08/2021 at 17:54:33
I realise that this is likely to bring down the roof on my head, but I think that, with the departure of Sigurdsson, and the sidelining of Delph, we may be in for a better midfield than for some time.

Gomes began very well, but was then crippled by Son's horror tackle and has not looked even nearly the same since. I wouldn't be deeply surprised if he got his nerve back and we saw the old Gomes back again.

I have always struggled to see what Sigurdsson brought, he was slow, his passing was OK to mediocre, his famous 'dead ball' ability seemed completely absent - has he scored any goals from free kicks? -, and he regularly disappeared from matches leaving the team with 10 players, thus making the likes of Tom Davies have to do two jobs and hence look incompetent.

Charles Brewer
21 Posted 09/08/2021 at 17:54:34
I realise that this is likely to bring down the roof on my head, but I think that, with the departure of Sigurdsson, and the sidelining of Delph, we may be in for a better midfield than for some time.

Gomes began very well, but was then crippled by Son's horror tackle and has not looked even nearly the same since. I wouldn't be deeply surprised if he got his nerve back and we saw the old Gomes back again.

I have always struggled to see what Sigurdsson brought, he was slow, his passing was OK to mediocre, his famous 'dead ball' ability seemed completely absent - has he scored any goals from free kicks? -, and he regularly disappeared from matches leaving the team with 10 players, thus making the likes of Tom Davies have to do two jobs and hence look incompetent.

Jim Lloyd
22 Posted 09/08/2021 at 18:03:14
I don't think your post is anything but logical, Charles. Sigurdsson is a luxury player that w can't afford. He always seems to be chasing after players; but never quite cartching them!

I hope that Gomes proves us wrong but we'll have to wait and see. With him and Sigurdsson in the team, we've got two luxury players and two expensive sets of wages.

Delph? He's been out so long I wonder if we will ever get a run in the team. Because of the situation we're in though, he might just be a useful squad player. He's got talent as he was a useful memeber of the Man City squad. Whether he intends to use it is another matter :)

Danny O’Neill
23 Posted 09/08/2021 at 18:25:04
I don't think that's a bad call Charles.

Personally, and again, I'll claim consistency, It's about the options in front and being closer to the attacking players.

Maybe (and just maybe), with quicker players and more natural width (we now how Townsend, Day and Richarlison), plus Gbamin hopefully fit, it isn't as bad as many think.

Midfielders need outlet when they look up. Liverpool's full backs don't even look for their midfielders or forwards, they hit space in the knowledge their forward players will be on the end of it.

And we could yet still have players coming in as well as some going out. Business will go to the wire this season due to Covid and the Euros. We may still be pleasantly be surprised.

John Chambers
24 Posted 09/08/2021 at 18:34:46
Brian, #18, I think that those gate receipts are actually per season. For Everton to get £18m per game would be an average approaching £500 per head!
Charles #21 Have I missed something re Sigurdsson? At the moment he is surely just a drain on resources as I would assume the club are obliged to continue paying him unless he is found guilty of committing an offence?
John Zapa
25 Posted 09/08/2021 at 18:43:57
I don't think the financial restraint now has much to do with FFP or Premier league rules. Usmanov could easily sponsor the corner flags for £25m each and cover all the losses and bypass the rules, but that's not going to happen as they have realised that it's much harder and more expensive to compete than they initally thought.

I still have my doubts that they would be able to raise funds for the stadium. Someone mentioned that the council once offered to loan the amount, others mentioned about various financial institutions who would like to be involved, however that was all pre Covid and before the heavy losses of the last few years.

A season of battling to try and earn a top 10 finish awaits.

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