777 Partners – GAME OF THE PEOPLE

IF ANYONE wanted to know just why Everton are in such an economic mess, their latest financials underline the precarious position the club is currently in. And, as if to make matters worse, Everton’s prospective owners, 777 Partners, have revealed a certain lack of knowledge about the game. One of their investments, Brazil’s Vasco da Gama, is described in a 777 presentation as a “Spanish third tier side”. Worrying.

Everton made a pre-tax loss of £ 89 million in 2022-23, bringing their total losses over the past five years to a staggering £ 500 million. The club is in the eye of the storm at the moment, with so many factors conspiring against them: a major stadium project that is putting them under a lot of pressure financially; an ownership battle with a very questionable new owner waiting in the wings; under-performance on the pitch with the club’s Premier League status threatened by points deductions. No wonder Everton’s fans are so unhappy – this is a major club that has been badly managed for the best part of a decade. And, given the current circumstances, should they suffer relegation, it could trigger off an even bigger crisis.

In 2022-23, turnover reduced by around 5% to £ 172 million. This was attributable mainly to lower commercial income, which fell from £ 50 million to £ 39 million. This was largely caused by the loss of deals related to Russian company USM. Actual sponsorship revenues almost halved as the club severed ties with Russian sponsors at the outbreak of the war in Ukraine. Filling some of the gap created by this move were new partnerships agreed with gambling platform Stake.com, the Socios fan-token app and boiler repair company BOXT.

Both matchday and broadcasting were more or less static. Although player salaries went down slightly, the wage bill, which totalled £ 159 million is still consuming far too much money, the wage-to-income ratio was 92%, way off the optimal figure of around 70%. Everton’s wage bill sits around halfway in the Premier League, but revenues are not keeping pace with what they are paying out to players. This, along with the cost of the new ground is burning up the club’s reserves – in 2022-23, cash has dropped to £ 10.8 million, about one third of the total in 2021-22 and one sixth of the 2020-21 figure.

Everton’s profit from player sales fell by £ 20 million to £ 48 million. This included the sale of Anthony Gordon to Newcastle. In 2023-24, the club has generated £ 82 million from further disposals, presumably to ease player costs.

Everton’s net debt rose from £ 141.7 million to £ 330.6 million. Majority shareholder Farhad Moshiri provided an interest free loan of £ 70 million during the course of the financial year, bringing the total of interest free borrowings to £ 450.7 million. Moshiri also lent the club £ 22.5 million, a loan that does incur interest. Moshiri insists the 777 takeover is nearing completion, but will that ease the concerns of Goodison Park regulars?

The need to grow revenues will surely be helped by the move to the new stadium, but the journey to the Bramley-Moore Dock will remain painful until the club’s finances are stabilised. Everton’s new home will give them a capacity of just under 53,000 and the facilities to create new revenue streams. The club also needs regular European football to grow income; in the past decade, they have benefitted from just two European campaigns, and neither of those was particularly successful. They also need the right managerial appointment. In 10 years, Everton have had eight full-time appointments. Sean Dyche is the current coach and he’s been in charge for 54 games with a win rate of 31.48%. His seven predecessors have kept their job for an average of 59 games and including the former Burnley man, the average win rate for an Everton manager in the past 10 years has been just 37.5%. They have made a series of mistakes in their hiring process – the appointments of Rafa Benitez and Frank Lampard were not very well thought out.

The latest financial figures suggest more problems may be down the line for Everton and there is always the possibility of another points deduction. They have to avoid relegation because life in the Championship with a new stadium and the accompanying cost of its construction could be catastrophic – new owner or not.

IT’s a strong UEFA Champions League last eight and any team can come up against anyone of the other participants. The free draw aspect of the competition is welcome after the seeded nature of the group stage and round of 16. There are three Spanish sides (Real, Barca and Atléti), two Germans (Bayern and BVB), two English (City and Arsenal) and the sole representative of France, PSG. Italy’s last remaining sides, Lazio and Inter, were knocked out by Bayern Munich and Atlético Madrid respectively. Four of the eight teams have been in seven or more quarter-finalists in the last decade, with Bayern Munich appearing in nine. Arsenal are involved for the first time since 2009-10. The draw will be made on Friday March 15 at 12.00 CET.

The Football Association clearly doesn’t take the women’s club game seriously enough, judging by their plan to call up players three weeks before the international window in July. The July games are particularly contentious and have led to a resurfacing of the issues that affected preparations for the 2023 World Cup. Clubs are concerned players will be denied a break after a run of back-to-back tournaments in recent years. Although the women’s game has come on in leaps and bounds, the key to its growth in the UK is not necessarily the national team but club football. The WSL, for example, has already become very polarised and in order for the product to become more attractive and more professional, the top players must not be burned out by too many international commitments. The England women’s team played 17 games in 2023 and by mid-July will have taken part in eight fixtures.

The sale of Everton to 777 Partners looks to be stumbling after the Premier League called the prospective buyers in for a meeting to discuss funding. 777 has an extensive football portfolio that includes clubs in Germany, Italy and Brazil, but sceptics are questioning whether there is sufficient finance to buy Everton. In September 2023, 777 agreed to pay £ 550 million for the struggling Merseysiders, but doubts have been fuelled by a complaint made by Obra Capital, who called in a US$ 55 million loan after 777 extended it three times. The complaint alleged that 777, despite insisting they are adequately capitalised, failed to make payments under the third extended loan agreement, leading Obra to seek reimbursement through collateral placed by 777. The drama goes on.

Chesterfield are on the verge of winning promotion back to the Football League and a victory at the weekend against Oldham Athletic could send them up with games to spare. At the Spirerites’ recent AGM, Phil and Ashley Kirk were given the go-ahead to become majority owners of the club. They are set to pump £ 2 million into the club which will take their stake to around 80%. The community trust will still own around 15%. The owners have revealed that they will aim to have a competitive budget when they return to the Football League. Ashley Kirk commented: “We have started to put together a budget for next year. It is difficult to know until you get in there and you can see where you stand. We will do our best to give the lads a competitive budget. It could be that our feet land in the play-offs next year but it could be that our feet land at 10th but we will be better than we are this year, we will have learnt and we will be able to push on. It is about making sure the club is better on and off the field.” Chesterfield are 23 points clear at the top of the National League.