Everton FFP- yes

[chinapig]

On 25/03/2023 at 19:43, Hxj said:

I agree - if Everton are relegated then the FFP fun really begins,

More so given the delays with the stadium and the fact that they still don't have the money to finish it anyway.

https://www.theguardian.com/football/2023/mar/31/new-everton-stadium-months-behind-schedule-guardian-analysis-suggests

[chinapig]

3 hours ago, chinapig said:

More so given the delays with the stadium and the fact that they still don't have the money to finish it anyway.

https://www.theguardian.com/football/2023/mar/31/new-everton-stadium-months-behind-schedule-guardian-analysis-suggests

... assuming they are even a going concern in any event. As the auditors put it “A material uncertainty exists that may cast significant doubt over the group’s ability to continue as a going concern.”

https://www.theguardian.com/football/2023/mar/31/evertons-survival-in-doubt-if-relegated-from-the-premier-league

[italian dave]

On 30/03/2023 at 20:31, Mr Popodopolous said:

Based on the EFL template they should've been charged in summer 2021 or 2022, see Birmingham.

Can only assume the League analysed the accounts in depth and found something eventually that they didn't like.

Burnley I'm sure will be instructing their lawyers to wait by the phone- unless they've waived their claim of course.

It is okay though, for Everton didn't spend anything in last few windows apparently.

So I missed:

Patterson and Mykolenko in January 2022, loans for Van De Beek, El Ghazi and the conditional loan and buy for Alli.

Sacking Benitez and hiring Lampard. All cheap, all free! Digne sold too granted...

Gueye, Garner, Onana, McNeil and Maupay summer 2022! Loans for Vinagre and Coady. Oh and Tarkowski on a free.

Spent no money however. Ha Premier League fans live in another world a lot of them. The EFL impose restrictions to the extent about paying fees, loan fees etc.

Richarlison was by 30th June so it seemingly fell into last season's books.

Based on net spend they perhaps have a point. Based on true profit and loss accounting for deals perhaps not.

They sold Gordon in January too if course, will be interesting to see what their accounts from last sesson look like in order to extrapolate. 

Sacking Benítez alone cost them £10m according to yesterday’s Guardian article. I guess that counts as nothing by PL standards today? 

[Mr Popodopolous]

Everton according to one report arguing that Covid cost them £190m, then mentions £195m in the article??

-£13m

-£111.75m

-£140m

-£120m

(Ave. -£130m)

-£44.75m

They're so so out of kilter with comparable clubs. Aston Villa was £56m, Leicester £50m, Crystal Palace okay not quite so comparable but £20-25m in two seasons.

They're the Stoke of the PL. Proportionally however Stoke are worse.

I remember their initial 2022 report made up to June 2021 said:

*£82m in direct losses

*A further indirect losses totalling £88m...

...*...Potentially rising to £138m!!

I mean come on! Then of those direct losses.

Seeking to include some £41m in Player Impairment and £11m in Provision for Onerous Contracts as Covid losses. Again come on! Same goes for Stoke mind you on the Impairment bit. Fulham too, £20.9m in 2020-21 Impairment attributed to Covid.

Edited April 3, 2023 by Mr Popodopolous

[Baba Yaga]

I see that Everton are really struggling now, pretty much confirmed that Everton were being bankrolled by Russian oligarch Usmanov and Moshiri was largely just a front man, now the money has dried up and they are seeking investment (from US groups, although its a risky climate to control a proportion of anything with current owners so not even sure its true).

https://www.bbc.co.uk/sport/football/65473716

https://www.theguardian.com/business/2023/may/03/oligarch-funded-everton-football-club-while-barred-from-uk-alisher-usmanov

Anyway my question is this... do you apply the ffp rules strictly and go after them asap or do you go soft to help ensure their half built stadium is completed before taking action?

 

[chinapig]

More detail, the key part being the following. A club managed this badly deserves to be relegated.

https://www.theguardian.com/football/2023/may/06/everton-sean-dyche-relegation-analysis

How ruinous would relegation really be?

Potentially catastrophic. Everton’s combined losses over the past three financial years stand at £305.5m and a staggering £417.3m over the past four years. The club is under investigation by the Premier League for an alleged breach of its profit and sustainability rules, owes about £150m to an opaque lender called Rights & Media Funding Limited and needs around £300m to complete the new stadium being built at Bramley Moore dock.

For all the talk of fresh investment from private equity firms MSP Sports Capital or 777 Partners, Moshiri has yet to secure the extra stadium funding while Everton are a Premier League club. In the Championship, Everton would suffer a huge reduction in income while having to meet tighter financial constraints than exist in the top flight.

The EFL has also shown itself to be far tougher in imposing sanctions for any financial breaches than the Premier League. An immediate fire sale of assets (Jordan Pickford, Amadou Onana, Calvert-Lewin) could be the least of their worries.

As Everton’s auditors reported in the accounts in March: “Should the club be relegated, it will require additional financial support from its majority shareholder, who themselves are reliant on support from their majority shareholder, who have indicated they are supportive of the group but the support is not legally or contractually binding. These matters indicate that a material uncertainty exists that may cast significant doubt over on the group’s ability to continue as a going concern.”

[Ska Junkie]

24 minutes ago, chinapig said:

More detail, the key part being the following. A club managed this badly deserves to be relegated.

https://www.theguardian.com/football/2023/may/06/everton-sean-dyche-relegation-analysis

How ruinous would relegation really be?

Potentially catastrophic. Everton’s combined losses over the past three financial years stand at £305.5m and a staggering £417.3m over the past four years. The club is under investigation by the Premier League for an alleged breach of its profit and sustainability rules, owes about £150m to an opaque lender called Rights & Media Funding Limited and needs around £300m to complete the new stadium being built at Bramley Moore dock.

For all the talk of fresh investment from private equity firms MSP Sports Capital or 777 Partners, Moshiri has yet to secure the extra stadium funding while Everton are a Premier League club. In the Championship, Everton would suffer a huge reduction in income while having to meet tighter financial constraints than exist in the top flight.

The EFL has also shown itself to be far tougher in imposing sanctions for any financial breaches than the Premier League. An immediate fire sale of assets (Jordan Pickford, Amadou Onana, Calvert-Lewin) could be the least of their worries.

As Everton’s auditors reported in the accounts in March: “Should the club be relegated, it will require additional financial support from its majority shareholder, who themselves are reliant on support from their majority shareholder, who have indicated they are supportive of the group but the support is not legally or contractually binding. These matters indicate that a material uncertainty exists that may cast significant doubt over on the group’s ability to continue as a going concern.”

Wow! I didn't know it was that bad. They really are in a dire situation if they drop then.

I can see the new stadium, which looks superb, being mothballed as their very existence comes into question.

 

[bcfc01]

3 minutes ago, Ska Junkie said:

Wow! I didn't know it was that bad. They really are in a dire situation if they drop then.

I can see the new stadium, which looks superb, being mothballed as their very existence comes into question.

 

Liverpool to rub it in and take it over for themselves.

[Ska Junkie]

6 minutes ago, bcfc01 said:

Liverpool to rub it in and take it over for themselves.

Then rent it back to the Toffees. OUCH!

[ExiledAjax]

4 hours ago, Ska Junkie said:

Wow! I didn't know it was that bad. They really are in a dire situation if they drop then.

I can see the new stadium, which looks superb, being mothballed as their very existence comes into question.

They also reportedly only have wage reduction relegation clauses in the contracts of players signed this season. If that's true then any player signed prior to last summer is entitled to their Premier League wages for the rest of their contract.

So a fire sale would be necessary in order to not have multiple Jack-Rodwell-at-Sunderland types on £50k a week.

[Lanterne Rouge]

Is it just me that thinks football needs a club like Everton to go to the wall to shake everything up for the better? No-one cares about the likes of  Macclesfield or Bury (apart from their poor fans) but Everton going bust would be seismic and may be for the good of the game going forward.

[Bristol Rob]

14 minutes ago, Lanterne Rouge said:

Is it just me that thinks football needs a club like Everton to go to the wall to shake everything up for the better? No-one cares about the likes of  Macclesfield or Bury (apart from their poor fans) but Everton going bust would be seismic and may be for the good of the game going forward.

Can see where you are coming from, but Portsmouth, Leeds, Watford, Bradford, Palace and Southampton have both gone from established Premier league sides, through a period of financial turmoil and somehow survived, a club the size of Everton will find someone somewhere who can prop them up.

Not saying the sentiment of what you are saying is wrong though.

[joe jordans teeth]

15 minutes ago, Lanterne Rouge said:

Is it just me that thinks football needs a club like Everton to go to the wall to shake everything up for the better? No-one cares about the likes of  Macclesfield or Bury (apart from their poor fans) but Everton going bust would be seismic and may be for the good of the game going forward.

Spot on.Everton and Man City need to be held accountable,tbf Everton have tried to sort it while Man City just carry on knowing the powers that be have no appetite for a long legal case 

[chinapig]

17 minutes ago, Lanterne Rouge said:

Is it just me that thinks football needs a club like Everton to go to the wall to shake everything up for the better? No-one cares about the likes of  Macclesfield or Bury (apart from their poor fans) but Everton going bust would be seismic and may be for the good of the game going forward.

I've long thought so. Let's face it when Bury went under there were 5 minutes of crocodile tears then it was forgotten. If a truly big club goes under maybe the penny will drop.

Though perhaps the independent regulator and UEFA's revised P&S rules will force change. The Premier League after all only discovered it had financial rules when the White Paper came along.

[Bristol Oil Services]

30 minutes ago, ExiledAjax said:

They also reportedly only have wage reduction relegation clauses in the contracts of players signed this season. If that's true then any player signed prior to last summer is entitled to their Premier League wages for the rest of their contract.

So a fire sale would be necessary in order to not have multiple Jack-Rodwell-at-Sunderland types on £50k a week.

Staying at Everton on wages they cannot afford running down their contract, refusing to budge, a large Winston Bogarde, while Everton burn and fold, will be like no other example. Their lives, and those of their nearest and dearest, will not be worth living. Not going to happen.

The level of anger will be off the scale. Can't see it happening. 

[ExiledAjax]

Just now, Bristol Oil Services said:

Staying at Everton on wages they cannot afford running down their contract, refusing to budge, a large Winston Bogarde, while Everton burn and fold, will be like no other example. Their lives, and those of their nearest and dearest, will not be worth living. Not going to happen.

The level of anger will be off the scale. Can't see it happening. 

If Everton cannot sell those players then you're essentially expecting a modern day version of our own Ashton Gate 8. Possible I grant you, but unlikely in the modern world of the rich and litigious.

[Bristol Rob]

4 minutes ago, ExiledAjax said:

If Everton cannot sell those players then you're essentially expecting a modern day version of our own Ashton Gate 8. Possible I grant you, but unlikely in the modern world of the rich and litigious.

The vultures will already be circling and eager to pounce. 

I'm sure there will be bargains to be had. Like what we got a few years back with that million quid we gave them for Liam Walsh.

[bcfc01]

1 hour ago, chinapig said:

I've long thought so. Let's face it when Bury went under there were 5 minutes of crocodile tears then it was forgotten. If a truly big club goes under maybe the penny will drop.

Though perhaps the independent regulator and UEFA's revised P&S rules will force change. The Premier League after all only discovered it had financial rules when the White Paper came along.

Who was the CEO of the EPL for years ?

[Port Said Red]

2 hours ago, chinapig said:

I've long thought so. Let's face it when Bury went under there were 5 minutes of crocodile tears then it was forgotten. If a truly big club goes under maybe the penny will drop.

Though perhaps the independent regulator and UEFA's revised P&S rules will force change. The Premier League after all only discovered it had financial rules when the White Paper came along.

Talking of Bury, this is good news.

https://www.theguardian.com/football/2023/may/06/bury-fc-gigg-lane-return-merger-agreed

[Mr Popodopolous]

On 06/05/2023 at 19:08, joe jordans teeth said:

Spot on.Everton and Man City need to be held accountable,tbf Everton have tried to sort it while Man City just carry on knowing the powers that be have no appetite for a long legal case 

I would say that Man City are historically sinning but now it's not so clear cut. Their commercial revenue will have legitimately grown with success, as their player trading has improved these profits are genuine, Academy sales pure profit as we know.

The question is how they reached this point. When did it go from dodgy to legit, the question then is if say £100m in FFP headroom between deficit and compliant in a 3 year period and sponsors inflated by I dunno £60m in 3 years...even that downward adjustment keeps them comfortably compliant. Just an example sure the real figures differ.

Success feeds off revenue, revenue feeds off success but the first 5 years minumum, maybe 6 or 7...very ropey IMO. Thereafter harder to say.

Everton have sought to put things right in later years a bit like at Stoke at our level but their Covid claims are very suspect. Both Everton and Stoke.

The most important point is that both very much need to be held accountable. Everton and Man City...and possibly Stoke at our level! Again legitimately putting it right now but I have questions and suspicions to 2021 or 2022. Maybe Nottingham Forest too.

Edited May 10, 2023 by Mr Popodopolous

[Mr Popodopolous]

On 04/05/2023 at 22:26, Baba Yaga said:

I see that Everton are really struggling now, pretty much confirmed that Everton were being bankrolled by Russian oligarch Usmanov and Moshiri was largely just a front man, now the money has dried up and they are seeking investment (from US groups, although its a risky climate to control a proportion of anything with current owners so not even sure its true).

https://www.bbc.co.uk/sport/football/65473716

https://www.theguardian.com/business/2023/may/03/oligarch-funded-everton-football-club-while-barred-from-uk-alisher-usmanov

Anyway my question is this... do you apply the ffp rules strictly and go after them asap or do you go soft to help ensure their half built stadium is completed before taking action?

 

I'm for go hard simply as the rules must apply to all equally if they are to have any merit. Their wider financial situation is neither here nor there I believe and in any event self-inflicted.

The other key point well IMO anyway is that all those clubs who have sold players, held back in the market, shown restraint at the expense of on the pitch, they have effectively sacrificed their on pitch interest to comply with the rules such as they are.

Any equivocation or go slow is a slap in the face to them and I believe could cause them ie the 3rd bottom side if they have complied legitimately genuine detriment. Burnley in effect hugely compliant went down at the expense of a side in alleged breach of the financial rules. I suspect it cost them a number of players as well as all the cash.

Now it may well turn out to be that it was a blessing in disguise for Burnley but is well beyond the point.

Edited May 10, 2023 by Mr Popodopolous

[downendcity]

3 minutes ago, Mr Popodopolous said:

I would say that Man City are historically sinning but now it's not so clear cut. Their commercial revenue will have legitimately grown with success, as their player trading has improved these profits are genuine, Academy sales pure profit as we know.

The question is how they reached this point. When did it go from dodgy to legit, the question then is if say £100m in FFP headroom between deficit and compliant in a 3 year period and sponsors inflated by I dunno £60m in 3 years...even that downward adjustment keeps them comfortably compliant. Just an example sure the real figures differ.

Success feeds off revenue, revenue feeds off success but the first 5 years minumum, maybe 6 or 7...very ropey IMO. Thereafter harder to say.

Everton have sought to put things right in later years a bit like at Stoke at our level but their Covid claims are very suspect. Both Everton and Stoke.

The most important point is that both very much need to be held accountable. Everton and Man City...and possibly Stoke at our level! Again legitimately putting it right now but I have questions and suspicions to 2021 or 2022. Maybe Nottingham Forest too.

In the Godfather, Michael Corleone sought to make the "family's" business legitimate.

I didn't erase or legitimise how they got to that position.

[Mr Popodopolous]

8 minutes ago, downendcity said:

In the Godfather, Michael Corleone sought to make the "family's" business legitimate.

I didn't erase or legitimise how they got to that position.

Yes, agreed. If Man City are found guilty then the strongest possible sanctions should be pushed for.

Though lesser alleged offences, same goes for Everton, Stoke and potentially Nottingham Forest. Maybe Fulham too although less sure if they have breached tbh.

Edited May 10, 2023 by Mr Popodopolous

[Mr Popodopolous]

Burnley the unfortunate side btw sold/lost and again it could work out for the best with Kompany etc.

Pope- Sold

Collins- Sold

Mee- Free

Tarkowski- Free

McNeil- Sold

Cornet- Sold

Weghorst- Loan x 2

Plus several more released.

Some may have left anyway but I'm sure if Burnley had overspent they may well have stayed up.

To make matters worse and I would still be legally powder dry surely, Tarkowski free and McNeil £20m went to Everton...the very team who possibly cheated them out of a PL survival place.

If Everton are found guilty, Burnley should be looking at some kind of well claim maybe.

Edited May 10, 2023 by Mr Popodopolous

[Sir Geoff]

15 minutes ago, Mr Popodopolous said:

Burnley the unfortunate side btw sold/lost and again it could work out for the best with Kompany etc.

Pope- Sold

Collins- Sold

Mee- Free

Tarkowski- Free

McNeil- Sold

Cornet- Sold

Weghorst- Loan x 2

Plus several more released.

Some may have left anyway but I'm sure if Burnley had overspent they may well have stayed up.

To make matters worse and I would still be legally powder dry surely, Tarkowski free and McNeil £20m went to Everton...the very team who possibly cheated them out of a PL survival place.

If Everton are found guilty, Burnley should be looking at some kind of well claim maybe.

Wasn't that a bit of an overpayment 'sweetener' deal to stop your last line from happening ?

[Mr Popodopolous]

12 minutes ago, Sir Geoff said:

Wasn't that a bit of an overpayment 'sweetener' deal to stop your last line from happening ?

Possible although a bit of a false economy from Burnley if so. However perhaps yes.

[Mr Popodopolous]

https://www.dailymail.co.uk/sport/football/article-12090845/Everton-face-sued-300m-Leeds-Leicester-Forest-Burnley-team-losses.html

Mixed news.

On the one hand it seems that the verdict won't be until next season.

Otoh it seeks that the lawyers are primed for action! Provided of course thst Everton are found guilty.

[W-S-M Seagull]

22 minutes ago, Mr Popodopolous said:

https://www.dailymail.co.uk/sport/football/article-12090845/Everton-face-sued-300m-Leeds-Leicester-Forest-Burnley-team-losses.html

Mixed news.

On the one hand it seems that the verdict won't be until next season.

Otoh it seeks that the lawyers are primed for action! Provided of course thst Everton are found guilty.

What reason do Everton give for being 100+ million over the allowed losses after the Covid allowances? Stadium? 

It just feels really dirty for me that they could stay up this season at the expense of clubs who have complied but then in a few months be found to have breached ffp.

 

[Mr Popodopolous]

42 minutes ago, W-S-M Seagull said:

What reason do Everton give for being 100+ million over the allowed losses after the Covid allowances? Stadium? 

It just feels really dirty for me that they could stay up this season at the expense of clubs who have complied but then in a few months be found to have breached ffp.

 

In a word? Covid! I totally agree with you btw.

Obviously the accounting losses are not the final losses, Academy, Infrastructure etc. Remember too that for ALL clubs 2019-20 and 2020-21 were aggregated and halved owing to Covid-19. Okay here goes.

Everton and their losses- pre tax, pre Allowable.

2017-18...-£13m

2018-19..-£111.9m

2019-20..-£140m

2020-21..-£120m

(Average-£130m).

Think with rounding etc the final loss to 2021 was £255m. Everton however have argued that £170m was lost owing to a combination of direct losses (Gate Receipts, TV Rebates etc) and indirect losses (Transfer market profits and cost savings lost etc).

Remember too that this is in total so the £85-110m would be than one to subtract.

That they have been sought to argue could rise to a whopping £220m!  Bulk of it will be indirect losses, believe that their usual FFP costs are some £20-25m per year, this may fall to £15-20m per year once the Stadium capitalised.

By way of comparison, sides such as Aston Villa, Crystal Palace, Leicester, Newcastle, maybe some others had Covid losses argued at maybe between £30-40m, £60m tops across the two years. These are clubs in a similar income range to Everton so £170--220m is incredible.

Then you take the following and the good news for Everton is that the £13m pre tax loss of 2018 drops off...

...To be replaced by a £44.75m pre tax loss! £286m now the new loss to 2022 give or take a bit either way. They also said they lost £8m last season due to the ongoing impact of Covid.

Yeah the indirect losses included nonsense items like Player Impairment attributable to Covid, post transfer profit and or wage/amortisation savings.  Total fakery, by all means include it but it doesn't seem right to be able to attribute it to Covid whatsoever to me. As in include but all of the cost goes through the accounts in the conventional manner.

It also if excluded for Covid means that not only is it excluded from the annual results but also removes future costs entirely as it has been accelerated and been deemed a Covid item.

Edited May 16, 2023 by Mr Popodopolous

[Mr Popodopolous]

Have just read the article again and I am unsure if Matt Hughes is conflating direct losses and indirect losses that I outlined above because I recall £82m in the Covid years and £8m in last season for the former. Maybe I should re-read their accounts but that seems very low compared to what I've read before.

He also possibly has not mentioned the merging of 2019-20 and 2020-21. In the sense that he is taking straight 3 Year figures when it's actually Year 1, Year 2 and 3 combined then Year 4.

Found a relevant section of the Everton accounts about losses and indirect/uncrystallised losses.

The latter being £88-138m so Everton claim across those two years averaged at £44-79m in the so called indirect/uncrystallised losses.

Edited May 16, 2023 by Mr Popodopolous