[Finance] Everton finances v those of the Albion

[El Presidente]

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/

 

[Dick Knights Mumm]

Great site chaps.

Not heard that for a while.

 

[Uh_huh_him]

Very interesting.

Thanks for posting.

Possible error though:

"According to the accounts West Ham spent over £215 million in 2017/18 on player signings, and on top of that Wayne Rooney was recruited on a free transfer. "

 

[Cozzy]

surely Everton must be close to FFP rules as they are spending way more than income ... and they cant put it all down to advertising income

 

[Sussex Nomad]

I have to say it's not interesting. They're just another bunch of northern monkeys with entitlement. They can do one.

 

[CoachVealie]

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

 

[Saladpack Seagull]

Very interesting. I thought there would be an enormous imbalance between us and them but I suspect many other Club v Club comparisons would come out in our favour. Thank goodness for a financially-adept Chairman with a tight grip on the reins of the business. So many other Clubs sail very close to the FFP wind and will suffer for it long-term.

 

[wellquickwoody]

IMO unless one of the big six come calling, Chris H is ours for as long as we/he wants. The only one of those likely to is Spurs if they are in deep doo doo. Everton long term have no more money than us and far more fan expectation, same as Wet Sham. In theory we are in a VERY strong position.

 

[Horses Arse]

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/

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?

 

[Pondicherry]

Interesting read. I was wondering if El Presidente or any other accountants could comment on EBITDA a bit further as they quote it at the company I work for as well. I understand what it means but I just don't understand why it it continually quoted as a measure of profit. Companies (including football clubs) do have to pay tax and interest payments. Their physical assets do depreciate. Their intangible assets (football player values and intellectual property) do depreciate. To me its like saying, 'here's the money we would have made if we don't include these other real costs'.

 

[Butch Willykins]

Love the mention of Daniel Levy’s bonus!

 

[Me and my Monkey]

If that's true, you'd expect a peak in managerial sackings around Christmas time. Have you considered exploring this interesting possibility?

 

[Hampster Gull]

Interesting read. I was wondering if El Presidente or any other accountants could comment on EBITDA a bit further as they quote it at the company I work for as well. I understand what it means but I just don't understand why it it continually quoted as a measure of profit. Companies (including football clubs) do have to pay tax and interest payments. Their physical assets do depreciate. Their intangible assets (football player values and intellectual property) do depreciate. To me its like saying, 'here's the money we would have made if we don't include these other real costs'.

Welcome to the world of accounting. A good account and tax advisor will get you the answer you want, within reason. For the real measure cash is king

 

[Cheshire Cat]

Liverpool City Council frequently advertise discounted tickets to staff for Everton home games usually against "smaller" clubs, so they clearly can't sell out most home games.

How they will fill a new stadium at Bramley Dock is anyone's guess?

 

[Cheshire Cat]

Interesting read. I was wondering if El Presidente or any other accountants could comment on EBITDA a bit further as they quote it at the company I work for as well. I understand what it means but I just don't understand why it it continually quoted as a measure of profit. Companies (including football clubs) do have to pay tax and interest payments. Their physical assets do depreciate. Their intangible assets (football player values and intellectual property) do depreciate. To me its like saying, 'here's the money we would have made if we don't include these other real costs'.

https://en.m.wikipedia.org/wiki/Earnings_before_interest,_taxes,_depreciation,_and_amortization

 

[timbha]

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?

Suspect some of the longer term commercial contracts eg stadium naming, were signed from the outset (championship) and therefore much lower value. We have upped our commercial game considerably in past 12 months - could never have envisiged that we would be sending delegations to India, New York, etc.

 

[PILTDOWN MAN]

Interesting read. I was wondering if El Presidente or any other accountants could comment on EBITDA a bit further as they quote it at the company I work for as well. I understand what it means but I just don't understand why it it continually quoted as a measure of profit. Companies (including football clubs) do have to pay tax and interest payments. Their physical assets do depreciate. Their intangible assets (football player values and intellectual property) do depreciate. To me its like saying, 'here's the money we would have made if we don't include these other real costs'.

Simple, have you got any real money available or is your profit a figure on a screen. When I had businesses my accountant would come and do my books once a month, often telling me how great the books looked. Wonderful, never had much dosh in the bank though.

 

[Super Steve Earle]

Interesting read. I was wondering if El Presidente or any other accountants could comment on EBITDA a bit further as they quote it at the company I work for as well. I understand what it means but I just don't understand why it it continually quoted as a measure of profit. Companies (including football clubs) do have to pay tax and interest payments. Their physical assets do depreciate. Their intangible assets (football player values and intellectual property) do depreciate. To me its like saying, 'here's the money we would have made if we don't include these other real costs'.

It's continually quoted a) because accountants know they are throwing in a word that most people don't understand and b) it's just such a lovely word to say, sounds a bit welsh.

 

[Horses Arse]

Suspect some of the longer term commercial contracts eg stadium naming, were signed from the outset (championship) and therefore much lower value. We have upped our commercial game considerably in past 12 months - could never have envisiged that we would be sending delegations to India, New York, etc.

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

 

[El Presidente]

Interesting read. I was wondering if El Presidente or any other accountants could comment on EBITDA a bit further as they quote it at the company I work for as well. I understand what it means but I just don't understand why it it continually quoted as a measure of profit. Companies (including football clubs) do have to pay tax and interest payments. Their physical assets do depreciate. Their intangible assets (football player values and intellectual property) do depreciate. To me its like saying, 'here's the money we would have made if we don't include these other real costs'.

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!