[Finance] Everton finances v those of the Albion

[El Presidente]

It would have been 'odd' to negotiate deals with the club so clearly focused on PL without clauses for achieving PL status. Seems absurd that the commercial income is so low given the crowds, stadium etc and when comparing against clubs with so much less in their favour. There must be more to it given Bloom's backing/support of Barber

There are step ups for promotion but also step downs for relegation, but when these were being negotiated with the likes of American Express the probability of promotion and then survival in the PL was quite low.

In terms of the deals with other sponsors, I suspect the club is trying to promote itself as family friendly, and is taking a long term view as opposed to signing up deals with the first Asian/African/Maltese generic gambling company that offers a couple of mill more than they get under the present deal with Amex.

 

[El Presidente]

Really good read. Thanks! btw you left a reference to West Ham in the section on amortisation.

Thanks for the spot, have corrected the error.

 

[Not Andy Naylor]

Elsewhere in those figures is the revelation that Swansea's average weekly wage was £10,000 higher than ours last season, Stoke's £8,000. Not great value for money in the circumstances.

 

[Stat Brother]

There has to be a way of keeping weekly wages down for the middle of the division teams.

£70k a week for players who will never play in the Champions League and is too good for a relegation scrap has got to leave teams with an awful lot of not quite 100% motivated players

 

[Pondicherry]

EBITDA is popular because
(a) It strips out one off items which won't necessarily arise in future years (in the case of Everton, £14 million in sacking two managers and consultancy costs for the stadium)
(b) It removes non-cash costs such as depreciation that are to an extent arbitrary (should a stadium be depreciated over 20 years, 30, 50 etc? There are no rules for these figures)
(c) It is funding model agnostic, as it shows the profit regardless of whether the club is funded by interest bearing debt, interest free debt or shares. This is useful if someone is looking to buy a club, and they might be planning a different funding model to that of the current owners.

EBITDA therefore gives a proxy of a cash profit figure, based on recurring, sustainable income flows, which can then be used to pay for transfers, finances costs and infrastructure spend, and as such it is more comparable between clubs.

It is imperfect as some clubs do have a business model of selling players to fund other costs, but this is a very risky approach, because if the production line of players stops for a season or two the club can find itself in the plop plops.


BTW I'm not an accountant!

Ok, thanks for the explanation. It the sort of answer I have heard before and I think you are saying its useful as a comparison tool in certain circumstances. Why does it strip out one off items like sackings and stadium consultancy? Which category do they fall into? I would also argue that manager sackings and stadium consultancy are not one off costs in modern football!!

 

[Couldn't Be Hyypia]

Clubs like Everton and many of the newly promoted sides
Usually pay too much to players,
Not knowing what the future holds.
(which) puts them at risk in the medium term, doesn't it?

 

[liverpool_one]

Libellous comment edited by mod

 

[SeagullDubai]

Any explanation of the commercial income for Brighton? Seems painfully low, around the Burnely/Swansea level and below Palace. Seems very odd - Barber needing to up his game or were those figures from previous non PL years?

Actually not surprised. Nothing really exciting in the store. Loved the Nike and premier-league polos. Would love to see some albion branded day wear.

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[redoubtable seagull]

Actually not surprised. Nothing really exciting in the store. Loved the Nike and premier-league polos. Would love to see some albion branded day wear.

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I suspect this has more to do with revenue earned from sponsorship deals rather than sales via the shop.

 

[Goldstone1976]

BTW I'm not an accountant!

Is that so?

Nice article EP, as ever.

 

[Greg Bobkin]

Figure for 2017/18

Income EFC £189 million BHAFC £139 million
Average weekly wage EFC £70,000 BHAFC £37,000
Player signings EFC £215 million BHAFC £57 million
Loss pre player sales EFC £64 million v BHAFC profit £9 million.

If you want to read the full story on the website that Bozza and I run (and an exclusive as to why Allardyce was sacked...if you know how to look for it) then the details are here

http://priceoffootball.com/everton-2017-18-the-long-and-winding-road/

Great insight, cheers. One question about the PL payments table - what comes under 'facilty fees'?

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[LlcoolJ]

Pretty sure that's correct about BFS. [emoji23][emoji23][emoji23]

 

[Horses Arse]

There are step ups for promotion but also step downs for relegation, but when these were being negotiated with the likes of American Express the probability of promotion and then survival in the PL was quite low.

In terms of the deals with other sponsors, I suspect the club is trying to promote itself as family friendly, and is taking a long term view as opposed to signing up deals with the first Asian/African/Maltese generic gambling company that offers a couple of mill more than they get under the present deal with Amex.

Interesting - I did wonder about the gambling ads of other clubs but seemed strange given Tony's background and current business. There's clearly difference with the likes of Leicester where the sponsorship is a created one and hence artificially increases the revenue but that's not the case with the gambling backed Palace, Swansea etc. So maybe it is as simple as creating a brand over short term revenue. Would imagine there'd be a big step up next time round though if we can keep current levels of performance up.

 

[El Presidente]

Great insight, cheers. One question about the PL payments table - what comes under 'facilty fees'?

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The facility fee is linked to the number of appearances on live TV. Each club is paid £1.2 million per appearance and are guaranteed payment for at least ten (even, if like Burnley, Huddersfield and Watford, their actual number of appearances is fewer than this). This means that the more popular clubs with TV audiences are rewarded for their popularity.


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[AmexRuislip]

Figure for 2017/18

Income EFC £189 million BHAFC £139 million
Average weekly wage EFC £70,000 BHAFC £37,000
Player signings EFC £215 million BHAFC £57 million
Loss pre player sales EFC £64 million v BHAFC profit £9 million.

If you want to read the full story on the website that Bozza and I run (and an exclusive as to why Allardyce was sacked...if you know how to look for it) then the details are here

http://priceoffootball.com/everton-2017-18-the-long-and-winding-road/

Do you ever advise Deloitte on facts and figures?
I mean as a separate entity to your website.

 

[Paulie Gualtieri]

Figure for 2017/18

Income EFC £189 million BHAFC £139 million
Average weekly wage EFC £70,000 BHAFC £37,000
Player signings EFC £215 million BHAFC £57 million
Loss pre player sales EFC £64 million v BHAFC profit £9 million.

If you want to read the full story on the website that Bozza and I run (and an exclusive as to why Allardyce was sacked...if you know how to look for it) then the details are here

http://priceoffootball.com/everton-2017-18-the-long-and-winding-road/

Thanks for the link

Interesting that palace spend 78% of their income on wages!


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[El Presidente]

Do you ever advise Deloitte on facts and figures?

No, think we’re not popular with them as they charge £100 for their annual report and £1,000 a month for access to their database but Bozza and I just blog it on Priceoffootball.com. They’re good guys though in the main, apart from being mainly Manchester United fans.


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[El Presidente]

I have to say it's not interesting.

Soz it’s not an interesting site.

 

[AmexRuislip]

No, think we’re not popular with them as they charge £100 for their annual report and £1,000 a month for access to their database but Bozza and I just blog it on Priceoffootball.com. They’re good guys though in the main, apart from being mainly Manchester United fans.


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Thanks that's interesting to know.
It's like Robin Hood and the Sheriff of Stats

 

[LlcoolJ]

Thanks for the link

Interesting that palace spend 78% of their income on wages!


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Worse than that. If you include player amortisation then Palace spend more than they generate just on those costs (like these Everton accounts).

That's based on old figures though obviously as Palace don't file recent accounts.

I for one am looking forward to the 2018 ones even though it's going to be a long wait. I predict a massive car crash, a big loss and no "ringfenced" money for their new stand.

All good fun.