THE HALF DECENT FOOTBALL MAGAZINE

Financial demands keep rising at Everton but a new ground still hasn't been located. Simon Hart looks at a unique set of problems

The Mirror journalist David Maddock is a sympathetic chronicler of the Merseyside football scene but his blog on Everton on January 18 was unfortunate in its timing. With David Moyes's team underperforming and rumours circulating about the club entering administration, he sought to explain "why Everton's achievements under Moyes and Kenwright are far more impressive than anything Man City have done" – urging fans to "rejoice in the fact that the club is run prudently with no danger of going bust".

For those Evertonians who had witnessed the media-supported hoopla surrounding Liverpool's problems, this view was probably not what they wanted to read during a month that brought three departures from a struggling squad and not a single new face – the fifth transfer window running without a net spend on players – and left many supporters asking just how well run their club really is.

The subsequent evidence of the club's accounts for the year ending May 2010, published on February 7, was not wholly encouraging, despite chief executive Robert Elstone describing them as "healthy". Besides a pre-tax loss of £3.1 million, the cost of keeping together Moyes's astutely assembled group of players had taken the wage bill to £54.3m – 69 per cent of turnover – and the net debt had risen by £7m to £44.9m. Bank interest was £4.5m a year – roughly the annual cost of a Mikel Arteta.

That these results were released two months later than last year had prompted concern among shareholders and supporters. Everton said the delay was a consequence of the drawn-out sale of their former Bellefield training ground. However, the Directors' Report accompanying the accounts noted that this sale (for a reported £8m) and the club's January transfer window activities were factors in the agreement of a new overdraft facility with the bank to take Everton through to the season's end. This begged the question of whether Everton were forced to offload players in January to appease the bank.

What is certain is that Everton have stretched their finances to near breaking point to support Moyes and, given the economic climate, can no longer go to the bank for loans. Although income from sponsorship and advertising has increased during the last decade, revenue – TV money apart – has remained relatively static over the last five years, and last year's loss would have been £22m but for the sale of players, notably Joleon Lescott.

It could be argued that Everton's finances would not be under such a harsh spotlight had Moyes's "best-ever" squad (as the Scot described it) met pre-season expectations but, with outgoings exceeding revenue, the current business model does not appear sustainable indefinitely. The balance sheet shows £95m of liabilities and only £65m of assets, and the funds from Bellefield – money once earmarked for a new stadium – served to repay debts. The Directors' Report notes that they acquired "further funding" through the securitisation of future guaranteed revenues "post year end". Rumours about the possible sale of Marouane Fellaini or Jack Rodwell, and Moyes's own position, increase the sense of uncertainty about the future.

The club need fresh investment yet, sadly, are held back by two things which, ironically, we bemoan the absence of elsewhere in modern football: a traditional old stadium and a chairman who is truly a fan. Goodison Park generates a wonderfully raucous atmosphere at times but is less good at generating income – just £22.8m last season, compared with Man Utd's £100.2m. As for Kenwright, his journey from boys' pen to directors' box is well told yet the fact is that since becoming owner in 2000, he has twice sought to move Everton – first to a waterfront site at King's Dock, then to Kirkby – and failed both times.

A self-confessed "pauper" beside the new breed of owner, he has also been unable to bring any new funds into the club, and this failure was a notable gripe by Evertonians in a Liverpool Echo poll in February. Although Kenwright instructed Keith Harris – chairman of the investment bank Seymour Pierce and a long-standing adviser to football clubs – to help with his search in 2008, it is not the same as formally appointing somebody to find new owners, as Liverpool did last April when recruiting Martin Broughton.

This has drawn suggestions that Kenwright is not serious about selling; those close to the theatre impresario insist that he is, but not to just anybody, and that his caution over finding a safe pair of hands is commendable. The stability Everton have enjoyed since he appointed Moyes is also to be applauded. Yet Kenwright and his board should not be spared criticism – in particular for the fact that Everton are no closer today to solving their stadium quandary than they were on the day Kenwright bought the club (something that may well deter prospective buyers).

Kenwright's decision to do away with AGMs, meanwhile, has left some shareholders feeling disenfranchised. After the release of the 2009-10 figures, Elstone claimed he did not want "sterile debate", yet when the Liverpool Echo ran a series of balanced articles investigating Everton's finances (which included speaking to fan groups, shareholders and football finance experts) the paper's reporter was banned from attending the pre-match press conference for February's FA Cup trip to Chelsea.

Concerned fans have established an online group, Evertonians for Change, while Mike Owen, a shareholder, is involved in a proposal to create a supporters' trust (Trust Everton). These are uncertain times and, whatever the future brings, it is hard not to think how different life would have been had Kenwright realised his original dream of a waterfront home. In this alternative reality, the rumour that the Abu Dhabi United Group looked at Everton before buying Man City might have been more than just that, leaving David Maddock to write a rather different blog.

From WSC 290 April 2011

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