EVERTON recovered some of their early season swagger in beating highly-fancied Chelsea at Goodison Park, but their fans will remain concerned about the current financial position of the club.
On the eve of their game against the Londoners, Everton revealed they made a loss of £ 139.8 million in 2019-20, their second successive annual deficit of over £ 100 million. Like many clubs, a significant percentage of that loss can be attributed to the pandemic (in Everton’s case around £ 67 million), but it is clear Everton’s expenses, including player wages, are still too high.
It doesn’t help the club that on their doorstep, they have a resurgent Liverpool generating three times as much cash, but Everton’s lack of European football also plays a part. spite of the pandemic and behind closed doors football, Everton’s revenues declined by 1% to £ 185.9 million. Prior to the pandemic, Everton claimed they were on track to generate record revenues of around £ 220 million.
Inevitably, matchday income fell due to the absence of crowds, with Everton’s revenues falling from £ 14.2 million to £ 11.9 million. Equally, broadcasting income was down from £ 132 million to £ 98 million. The club has a strategy to reduce its reliance on broadcasting – in 2020, this represented 53% of total income versus 71% in 2019.
Offsetting the drop in matchday and broadcasting, Everton derived some consolation from their commercial activity, which increased to a record £ 76 million from £ 40.8 million. The club’s commercial revenues have more than trebled in the past five years.
Wages, which totalled £ 164 million in 2019-20 consume a concerning 89% of income and since 2015-16, the ratio has risen by 20 percentage points, almost doubling the amount paid out in 2015-16 (£ 84 million). The club insists the increased ratio was inflated by the loss of revenue due to covid-19.
The increase in wages since 2016 has not yielded significant success for the team, which finished 12th in the Premier League in 2019-20 after three years in which they were placed seventh, eighth and eighth. Everton have had five full-time managers in five years, Carlo Ancelotti was appointed almost a year ago, succeeding Marco Silva (who was sacked with £ 6.6 million of compensation), and is the first manager since Howard Kendall to have a win-rate in excess of 50%. Everton started this season well, but lost momentum after winning their first four Premier League games.
Everton have to thank owner Farhad Moshiri for his continued support. He injected a further £ 100 million into the club, taking his total outlay to £ 400 million since acquiring 77.2% of the club in February 2016. The club is also set to issue £ 250 million of new shares to Mishiri’s Blue Heaven Holdings Limited. Thanks to Moshiri, Everton’s net debt also decreased from £ 9.2 million to just £ 2.3 million. The club has also secured a new £ 80 million credit facility with Rights & Media and raised £ 20 million from Metro Bank.
The financial downturn among football clubs hasn’t stopped Everton spending – in 2019-20, £ 113 million was spent on players, but the club posted a profit of £ 40.5 million on the disposal of player registrations. With the arrival of Carlo Ancelotti, Everton modified their strategy around transfers with an emphasis on the acquisition of experienced players, but the club has also announced the restructuring of their recruitment department, creating a number of new roles across Europe.
Everton’s hopes of competing with the Premier League’s top six depend, to a large degree, on their proposed new stadium at Bramley-Moore Dock, a project that aims to be completed by 2023. In preparation, the club spent around £ 20 million on planning in 2019-20. The new ground will cost approximately £ 500 million and will seat 52,000 people. Moving will be a wrench for some people, for only Burnley have been at their home ground longer.
Everton is a club with a fine history, but their last trophy was won in 1995 – 25 years ago. Their current finances highlight the challenge they face in moving the club into the very top bracket in English – and European – football. Ultimately, much will depend on that new stadium.