Everton’s latest financial results, released on Tuesday morning, offer a fascinating insight into the true cost of what has been an eventful year both on and off the pitch.
The club will understandably highlight the positives, particularly a record turnover of £189m, a 10% increase on last year. That was driven by a 45% increase in gate receipts, sponsorship, advertising and merchandising revenue.
Healthy season ticket and matchday ticket sales, Europa League football and new sponsorship deals with SportPesa and Angry Birds contributed to those figures as have the vast sums of television money that have flooded Premier League sides across the board.
But hidden amongst the blurb is a revealing insight into the costs involved in navigating what has been a turbulent 12 months for the football club.
Here are a few of our early takes:
Profit to a loss
Despite the millions swirling around the Premier League, Everton actually made a loss in the last year. The club were £13.1m in the red after tax compared to a post-tax profit of £30.6m in 2017 - a £43.7million swing.
The record breaking 2017 summer of spending - and subsequent jump in wage costs - is obviously a significant contributor to those losses. The club’s intangible assets have doubled from from £121m in 2017 to £240m in 2018, with staff costs up from £104.7m in 2017 to £145.5m.
The 2017-18 season saw Everton burn through managers and coaches like there’s no tomorrow. Out went Ronald Koeman and his coaching team in October 2017, Sam Allardyce and his army of staff arrived the following month but were gone within six months. Director of football Steve Walsh was also sacked at the end of the season.
All that hiring and firing is expensive. The club confirmed they spent £14.4m on “settlement costs” for employees and coaching staff. In total the club spend £34m on “exceptional costs” not present in 2017
New stadium financing
Though a spade has yet to be plunged into the ground at Bramley Moore, the cost of constructing Everton’s new stadium is already beginning to rise.
Everton revealed they spent £11.4m for design and other work relating to the new stadium. Architect Dan Meis, of course, is currently leading the design work for the ground, though we have yet to see any images.
The club have also just completed an extensive consultation process, with the hope of submitting a formal planning application next summer.
The bank of Farhad
Farhad Moshiri’s commitment to Everton is not in any doubt thanks to the enormous financial support he has given the club over the past two-and-a-half years.
He has already pumped £150m into the club, which has which is accounted for as equity. The latest figures reveal a further £100m had been loaned to the club, recorded as coming from Bluesky Capital Limited.
This is clear evidence that Moshiri is putting his money where his mouth is and helping to kick-start a rebuilding process - on and off the pitch - that will hopefully lift the club back amongst the division’s elite.
Such a chaotic and calamitous year was bound to have a negative impact on the balance sheet and so it had proved. However, thanks to rising revenues and the continued support from Moshiri the club have been able to ride out the storm relatively unscathed.
Those management costs won’t be there next season (hopefully!) though the cost of employ Marcel Silva and Marcel Brands are not included in this year’s figures.
Meanwhile Silva and Brands are already looking to employ a much more sensible approach to transfer spending after such a scatter-gun approach last time, including a signifiant reduction in wage costs.
The money spent on Bramley Moore is significant and only likely to increase, but is an encouraging sign as to the club’s commitment to the project and confidence of being able to see it through.