Goodison Park – GAME OF THE PEOPLE

EVERTON’s defeat at Anfield was a reminder that Sean Dyche and his team have a considerable amount of work to do to avoid relegation this season. They are in a precarious position, but as the victory against Arsenal showed, they are capable of producing something better. But against Liverpool, a team that has struggled to live up to the standards set by Jürgen Klopp, Everton fans were sent a message.

Should they suffer relegation, it will only be the third drop through the trapdoor in their long history; the last time they went down was in 1951, when both Everton and Sheffield Wednesday were victims of the goal average system. This method must have caused all sorts of problems on the final day of a season as flat-capped terrace dwellers scribbled their calculations on the back of cigarette packets. Thank heavens for Mr Casio’s calculator and the development of goal difference.

Only Arsenal have been relegated less, their only demotion coming in 1913 when they were a South London club from Woolwich. Liverpool have gone down three times, the most recent being in 1954 before the days of Bill Shankly and the rebirth of the club.

Relegation for such a big club would be a major shock in English football, as it was when Manchester United fell into Division Two in 1974, just six years after winning the European Cup. It was actually a blessing in disguise, for United had been in something of a freefall on and off the pitch and needed to wipe away the shabby conclusion of the George Best era. United went back a better team and regained their place among the top clubs. Chelsea went down a year later, spiralling into financial chaos and by 1975-76, had lost around 20,000 fans at home games since 1971. Tottenham and West Ham followed in the mid-to-late1970s. Manchester City’s relegation in 1983, which seems a once-in-a-lifetime event now, was a dramatic event, decided by a late goal and celebrated in true dad-dancing style by David Pleat.

As football has changed, the financial rewards of the Premier League have cushioned the likes of the big six and others from struggling for any length of time. There’s also the rise of billionaire owners that have propelled clubs to a new level – Newcastle United are the latest. It has become unlikely for a Chelsea, Arsenal or Tottenham to fall into the relegation zone and stay there.

And if they do, the elite clubs generally have the power to climb out of the hole in a year or two. Manchester United went straight back up in 1975, Chelsea took two years (although it was a false dawn as their finances got worse and they were relegated again in 1979) and Tottenham eased their way back in a single, goal-happy season. Now, the parachute payments give the relegated clubs some advantages and they can mount a recovery campaign, hence Burnley are ploughing away in 2022-23 at the top of the Championship.

Although Everton are just outside the “bulge bracket” of clubs, possible relegation need not be the end of the world because they are certainly strong enough to return immediately. When a club does suffer a setback, it is vital the management does not allow things to fall apart. Sometimes, a club on a downward spiral starts to splinter when relegation comes – there have been a number of calamitous double relegations that have been difficult to overcome.

Three clubs have had a notable number of relegations: Grimsby Town have gone down 17 times in their Football League history, Bolton Wanderers 16 and Doncaster Rovers 15. Of the current Premier League, Leicester City have been relegated 12 times, Manchester City and Wolverhampton Wanderers 11.

The financial impact of relegation is what really drives the fear of clubs in the Premier. The broadcasting money, the commercial potential and the huge crowds have created a way of life for the clubs that they cannot contemplate losing. Even though a successful promotion bid will maintain public interest and possibly increase crowds at some clubs, the economic consequences are very clear. With Everton in the process of a new stadium project, avoiding relegation will be doubly important if they are to avoid the threat of a financial crisis. The times may be very different, but Chelsea’s collapse in the mid-1970s was a combination of macro-economics, financial decline, an under-performing team, and the debt incurred by a stadium rebuild. There is a lesson to be had there.

IF THERE is a club that seems to have the walls closing in on them it is surely Everton, who are not only fighting for their Premier League lives but continue to lose vast sums of money. On top of that, the club has been badly affected by the sanctions on Russian oligarch Alisher Usmanov and, consequently, has a gap in sponsorship income.

There’s also continued lack of stability on the management front, with Carlo Ancelotti surprisingly leaving at the end of 2020-21 for Real Madrid, Rafa Benitez sacked after just a few months in charge and now former Chelsea manager Frank Lampard presiding over a run of poor results that have pushed Everton to the fringe of the relegation struggle.

Everton’s 2020-21’s financials show a third consecutive £ 100 million-plus pre-tax loss. Although revenues rose by 4% to a record £ 193.1 million, Everton lost £ 120.9 million, admittedly better than 2019-20’s £ 139.8 million and 2018-19’s £ 127.3 million, but still worryingly high. In four years, Everton have lost close to half a billion pounds, but investment made in infrastructure and academy football should help them keep below fair play and sustainability limits.

Everton’s wage bill has caught up with them and despite the big loss, players’ salaries increased by 11% to £ 182.6 million, representing 95% of earnings. In five years, the wage-to-income ratio has gone up from 61% to 95%, and Everton have little to show for their generosity. The club’s last major trophy was won in 1995, 27 years ago and the longest stretch in Everton’s history without a single piece of silverware.

Everton have been among the biggest spenders in the last five years, their gross outlay amounting to £ 483 million, making them the Premier League’s fifth biggest spender. In 2020-21, they had a net spend of £ 62 million, their biggest signings being Allan of Napoli (£ 21.7 million), Abdoulaye Doucouré (Watford £ 20 million) and Ben Godfrey (Norwich £ 20 million). Everton’s record in the market is questionable, witness the write-down of the book value of the squad and the increased provisions for burden-heavy contracts. The club also saw profits on player trading decline from £ 40.5 million to £ 14.8 million.

Despite making a strong start to 2020-21, Everton faded miserably and finished 10^th, enduring a dreadful home record in the Premier League. The malaise has continued into 2021-22, the 4-0 thrashing at Crystal Palace in the FA Cup being the latest setback.

The 2020-21 season was characterised by an almost complete lack of fixtures involving spectators, hence Everton’s matchday revenues fell 98% to £ 0.2 million. Only three of the club’s Premier League home games were played before a crowd. Fortunately, broadcasting bounced back by 49% to £ 146.4 million but the commercial stream was down by 38%. In response to Russia’s invasion of Ukraine, Everton have had to sever all connections with Usmanov’s companies USM, Megafon and Yota. This has cost the club some £ 20 million. The pandemic has been responsible for around £ 170 million of lost earnings although this figure could eventually head north of £ 200 million.

Everton’s net debt went up from £ 2.3 million to £ 58.2 million which was attributed to the investments made in the first team squad and the new stadium. The club has had to be buoyed by a £ 100 million share issue, providing new funds from the major shareholder and since the 2020-21 year-end, another £ 97 million was made available. The club has also secured a five-year facility with Right and Media (£ 90 million drawn), which includes a charge on club assets, and has also taken out a £ 30 million government-backed loan, repayable over three years.

The future revolves around the new Everton stadium at Bramley Moore Dock, but the situation in Ukraine means the original plan to name the ground after Usmanov has been shelved. The club insists its financial position is very secure thanks to stringent cost-cutting and the unwavering support of Farhad Moshiri, but they still has a very heavy cost base. All the more reason to ensure Premier League status is retained for 2022-23 – relegation would surely be a significant blow to their plans.