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The Swiss Ramble on Everton FC

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But an essential read nonetheless. Just posted this morning.

 

http://swissramble.blogspot.com/2011/09/ev...blue-skies.html

 

Some selected quotes and stuff of interest anyway.

 

Although Everton’s financial problems may not have attracted the media coverage of some other clubs, the fact is that their business model is bust. Essentially, their strategy has been to run the club at a loss every year in a gamble to achieve success and to fund this by steadily increasing their debt, but now the banks have stopped extending them credit. It is not too difficult to see why they have made this decision, as Everton’s profit and loss account looks simply awful. Even with healthy turnover of £79 million, they reported a loss of £3 million

 

2010premiershipmoneylea.jpg

 

This table is worth looking at properly, we should be coming in above Villa on that this year. Our matchday income in the championship was bigger than Everton's, we should come in just behind Spurs for matchdays.

 

The chairman was equally vague last year when discussing the club’s debt, “I do not understand why football clubs have such big debts, it is a mystery. Our debt is a big debt and a worrying debt, but it is manageable because of our performance on the field… but it is too much debt that every year is going to be added to.” That part’s certainly true, as the net debt has more than doubled from £20 million in 2005 to £45 million in 2010. It rose £7 million last year alone.

 

The debt has been rising because the club has been spending money that it does not have on strengthening the team. As Elstone put it, “our pursuit of success has stretched our finances.” The result of this risky strategy is clear to see, as the club is burdened with a 25-year loan from Bear Sterns (now at £25 million), which has the advantage of being long-term, but carries a high interest-rate of 7.79%, leading to annual payments of £2.8 million. The only way that Everton can manage to pay this is by increasing its bank debt, so the club has built up bank loans of £17 million and an overdraft of £5 million.

 

Although Everton’s debt is by no means excessive compared to other football clubs, the problem is that they appear to have no realistic way of paying it off. That is why the bank has capped the club’s overdraft at £25 million, which has meant that the £8 million received for the sale of Bellefield last December and the proceeds from this year’s player sales have gone directly to the bank

 

Anyway, he goes right into the problems facing Everton and they look fairly daunting for their fans but actually, most clubs will face this problem eventually, since financial fair play will impose cost reduction. So i thought the next part was worth a read. What does the financial expert propose as a way forward.

 

So is there anything that Everton can do? Is there a blueprint for success?

 

I can see five possibilities: (a) be successful on the pitch; (:razz: cut costs; © build a new stadium; (d) find a wealthy benefactor; (e) focus on youth

 

In reference to d. he says

 

Although Bill Kenwright might be a great bloke, as he admitted himself, he is “a pauper when it comes to other chairmen.” The harsh reality is that the current owners have not put any money into Everton football club, which is in stark contrast to other benevolent owners, e.g. £187 million at Fulham, £115 million at Sunderland, £85 million at Bolton, £52 million at Wigan and £43 million at Stoke.

 

Some food for thought.

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

 

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

It was exactly what i was thinking. If the debt market is that tough now and is putting that much pressure on Everton, where would we have been with over twice that level in 2007 and without a real plan to reduce it, just re-finance it.

 

What do you mean on that last bit? Sarcasm?

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

It was exactly what i was thinking. If the debt market is that tough now and is putting that much pressure on Everton, where would we have been with over twice that level in 2007 and without a real plan to reduce it, just re-finance it.

 

What do you mean on that last bit? Sarcasm?

 

Fisrt bit - It's what I've been blathering on about for ages.

 

Second bold bit - Aye just being a tad sarky. Seems to be the stock answer round here when any question about the source of money is mentioned.

Edited by Toonpack

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If Everton's loan is due to Bear Stearns then it's fair to say it's been there a while.

 

Would we have re-financed the stadium loan? In 2007 yes I think we probably could have done. And of course it would not have become due has the previous owners stayed put.

 

The club was quickly running out of cash, so the most likely answer to the 'what if' question (bearing in mind how many clubs have changed hands since) would be that the former directors would have been left with little to show from their investment and a new owner would have undertaken what Ashley did- a considerable working capital injection.

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If Everton's loan is due to Bear Stearns then it's fair to say it's been there a while.

 

Would we have re-financed the stadium loan? In 2007 yes I think we probably could have done. And of course it would not have become due has the previous owners stayed put.

 

The club was quickly running out of cash, so the most likely answer to the 'what if' question (bearing in mind how many clubs have changed hands since) would be that the former directors would have been left with little to show from their investment and a new owner would have undertaken what Ashley did- a considerable working capital injection.

 

What investment ??

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Quite, poor choice of words from me. For their shares, I mean. Rather than the best part of £130m that they somehow walked away with.

 

But they'd still have their £52 Million plus at least some "profit" from the shareholding at the sale, unless of course it went into administration and they'd just have been left with their £52 Million.

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

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£52m being dividends rec'd to date?

 

Salaries (£10Mill), Dividends (£22Mill) and sales of shares during the tenure (£20Mill sold back to the club and to NTL) .

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

 

I woke up and smelled the coffee, you've been castigating me for my view for many years, no crystal ball about it.

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Quite, poor choice of words from me. For their shares, I mean. Rather than the best part of £130m that they somehow walked away with.

 

But they'd still have their £52 Million plus at least some "profit" from the shareholding at the sale, unless of course it went into administration and they'd just have been left with their £52 Million.

 

"No, football clubs never go into liquidation. Apart from the time when SJH rescued the club when it was about to go into liquidation." To paraphrase one of my favourite 'cake-and-eat-it' lines. :razz:

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

 

I woke up and smelled the coffee, you've been castigating me for my view for many years, no crystal ball about it.

So when will Everton cease to exist then?

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

It was exactly what i was thinking. If the debt market is that tough now and is putting that much pressure on Everton, where would we have been with over twice that level in 2007 and without a real plan to reduce it, just re-finance it.

 

What do you mean on that last bit? Sarcasm?

 

maybe he meant to say "But anyway, they'll just cut their costs, simple really"

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Quite, poor choice of words from me. For their shares, I mean. Rather than the best part of £130m that they somehow walked away with.

 

But they'd still have their £52 Million plus at least some "profit" from the shareholding at the sale, unless of course it went into administration and they'd just have been left with their £52 Million.

 

"No, football clubs never go into liquidation. Apart from the time when SJH rescued the club when it was about to go into liquidation." To paraphrase one of my favourite 'cake-and-eat-it' lines. :razz:

 

obviously a Halls/Shepherd bandwagon jumper, as if being a complete clown and know-nowt isn't enough :lol:

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

 

I woke up and smelled the coffee, you've been castigating me for my view for many years, no crystal ball about it.

So when will Everton cease to exist then?

 

maybe he's looking into his crystal ball again :lol:

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

 

I woke up and smelled the coffee, you've been castigating me for my view for many years, no crystal ball about it.

 

so you said at the time if we don't replace the Halls and Shepherd we will go bust in a few years time, but nobody else with "unsustainable debts" will go bust in a few years time ?

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

 

I woke up and smelled the coffee, you've been castigating me for my view for many years, no crystal ball about it.

So when will Everton cease to exist then?

 

When did I ever say they would (or we would for that matter).

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Toonpack sounds like macbeth, who used to tell us all on NO how the club was going to the wall, and somebody else needed to take over the club, anybody other than the Halls and Shepherd, because they took a few million quid in divis and rented out a warehouse for a few hundred grand. He also spouted the same bollocks in "The Mag" on a fairly regular basis.

 

He said nobody else would go to the wall, just NUFC, and denied he had an agenda against the Halls and Shepherd because they wouldn't allow him or one of his "rebel" group a seat on the board. :razz:

 

Since Mike Ashley bought the club, he has disappeared into thin air.

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I'm sort of wondering if this is a 'look what you could have won' moment' in that the business model as described by SR is sort of what we were doing pre-Ashley. There are of course big differences, we have the bigger potential, our matchday income in the premiership dwarfes theirs and we dont need a new stadium. However, when i was reading it, i couldnt help but think of the 2006 to 2007 state of the club.

That wasnt the point of posting it though, its sobering reading and just goes to show the importance of maximising every possible income stream and reducing the interest payments on loans. That 7.79% looks prohibitive in today's debt market. If you want to bring up the SD signage in this thread, feel free, its a mystery to me why he isnt using every legitimate means to raise revenue as that revenue table tells you exactly what drives success, as if there was any doubt about that.

 

Everton need a buyer, going to be interesting seeing what they do next as something has to give.

 

There but by the grace of God etc etc The big differences are somewhat mitigated by the fact their "now" debt is just over half of what our "then" debt was.

 

But anyway, they'll just raise their revenues, simple really.

 

I like the way some people pretend they looked into a crystal ball 5-6 years ago and pretend this is why they wanted rid of the Halls and Shepherd, at the time.

 

:razz:

 

I woke up and smelled the coffee, you've been castigating me for my view for many years, no crystal ball about it.

 

so you said at the time if we don't replace the Halls and Shepherd we will go bust in a few years time, but nobody else with "unsustainable debts" will go bust in a few years time ?

 

Just illustrates your lack of comprehension. If the debt at the time had been stable it would have been sustainable, the ONLY way to service the debt, because it was growing, was by more debt, that model (in the real world) is NOT sustainable. Who else had a model like that, with no owner to bail it out ??? Maybe Portsmouth, and that's all (and perhaps Everton it appears).

 

That's what you fail to grasp every fucking time, our debt was like no-one else's, there wasn't an owner to support it or underwrite it, it was 100% financial institution debt to the max.

Edited by Toonpack

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