| Everton finances 06:43 - Jan 21 with 7288 views | Wilkinswatercarrier |
Just finished reading an article in the Guardian regarding the troubles at Everton. They have posted a combined loss of £372.6m from its past 3 sets of available accounts.
The new stadium being built is not fully funded to complete it either yet.
FFP is not my strong point, but if they are relegated I'm assuming they will fall into administration immediately.
|  |
| |  |
| Everton finances on 08:22 - Jan 21 with 5509 views | distortR |
There's a kind of reverse 'father Ted and the cow' psychology about FFP and football clubs though. Hence
'big' club - ffp far away
'little' club - ffp near.
Hope that helps. | | | |
| Everton finances on 09:59 - Jan 21 with 5322 views | SimonD |
Without looking at the accounts it is always hard to know. There maybe significant building costs which would be outside of the scope of FFP.
Everton were claiming huge Covid related costs to counteract some of their losses. They were claiming that Covid had reduced the value of their players in the transfer market and, for FFP purposes, offset dropping their value (which would show as a loss).
As a Premier League team they are allowed to lose an average of £35m a season, not the £13m that applies to Championship clubs.
If they were found guilty the punishment in the EFL would be a points deduction. The EFL could not put them into administration.
Without properly investigating it is very hard to tell, but it certainly doesn't look good! | | | |
| Everton finances on 11:03 - Jan 21 with 5195 views | PinnerPaul |
| Everton finances on 09:59 - Jan 21 by SimonD |
Without looking at the accounts it is always hard to know. There maybe significant building costs which would be outside of the scope of FFP.
Everton were claiming huge Covid related costs to counteract some of their losses. They were claiming that Covid had reduced the value of their players in the transfer market and, for FFP purposes, offset dropping their value (which would show as a loss).
As a Premier League team they are allowed to lose an average of £35m a season, not the £13m that applies to Championship clubs.
If they were found guilty the punishment in the EFL would be a points deduction. The EFL could not put them into administration.
Without properly investigating it is very hard to tell, but it certainly doesn't look good! |
Wouldn't reducing the value of their players, just reduce the value of their assets on the balance sheet?
Don't see how that would affect the operating P & L? | | | |
| Everton finances on 12:44 - Jan 21 with 4994 views | stanistheman |
The FFP rules don’t make sense. Look at how much Chelsea have spent over the past few seasons in fees wages and compensation for managers and their staff.
How are they managing this? | | | |
| Everton finances on 15:09 - Jan 21 with 4873 views | Toast_R |
| Everton finances on 12:44 - Jan 21 by stanistheman |
The FFP rules don’t make sense. Look at how much Chelsea have spent over the past few seasons in fees wages and compensation for managers and their staff.
How are they managing this? |
Apparently they sell a lot off players |  | | |
| Everton finances on 16:32 - Jan 21 with 4786 views | themodfather |
it sucks. so many clubs owe the taxman and have huge debts, reality doesn't seem to come into football clubs. | | | |
| Everton finances on 17:08 - Jan 21 with 4752 views | ted_hendrix |
Equal bottom of the table, same amount of points as the dreadful Southampton.
It beggars belief how Lampard hasn't been sacked. |  |
| My Father had a profound influence on me, he was a lunatic. |
| |
| Everton finances on 20:18 - Jan 21 with 4620 views | SimonD |
| Everton finances on 11:03 - Jan 21 by PinnerPaul |
Wouldn't reducing the value of their players, just reduce the value of their assets on the balance sheet?
Don't see how that would affect the operating P & L? |
If we take a couple of steps back this probably makes more sense. When a club buys a player there is no initial entry in the profit and loss. The whole of the purchase price is entered into the balance sheet as an asset. However, as an expense, all of that cost has to be charged to the profit and loss eventually.
Thanks to Bosman, we know that a player can leave for free at the end of his contract, and therefore at the time has no residue value. If a player is bought for £8million and signs a 4-year contract, a cost of £2million (£8m / 4 years) is charged to the PnL every year each reducing the asset (the player’s net book value) by the same amount. This is called amortisation. If a club choses to reduce the player’s nbv (called impairment), the equivalent cost has to be charged to the PnL and further amoritsations are based on the revised nbv. If the impairment cost wasn’t charged to the PnL, the whole of the player’s initial cost would not be accounted for. | | | |
Login to get fewer ads
| Everton finances on 20:38 - Jan 21 with 4569 views | SimonD |
Apparently Chelsea have generated more than £600million profit in player sales in the last 8 years, the last couple being Abraham and Tomori who together realised a profit of £77m.
They are also offer very long contracts spreading the cost of their purchases thinner.
This may all come home to roost once they fail to qualify for the Champions League this season and their income drops significantly as a result. | | | |
| Everton finances on 20:58 - Jan 21 with 4522 views | Esox_Lucius |
| Everton finances on 20:38 - Jan 21 by SimonD |
Apparently Chelsea have generated more than £600million profit in player sales in the last 8 years, the last couple being Abraham and Tomori who together realised a profit of £77m.
They are also offer very long contracts spreading the cost of their purchases thinner.
This may all come home to roost once they fail to qualify for the Champions League this season and their income drops significantly as a result. |
I believe this is known as player/ asset amortisation which explains 8.5 year contracts being given out. |  |
| The grass is always greener. |
| |
| Everton finances on 15:42 - Jan 23 with 4223 views | Juzzie |
Frank Lampard sacked!! |  | | |
| Everton finances on 15:47 - Jan 23 with 4197 views | Phildo |
| Everton finances on 15:42 - Jan 23 by Juzzie |
Frank Lampard sacked!! |
enormous savings incoming on the sausages budget |  | | |
| Everton finances on 15:51 - Jan 23 with 4173 views | flynnbo |
Return of the Fat Sam? |  | | |
| Everton finances on 15:51 - Jan 23 with 4165 views | HAYESBOY |
Gravel throat to the rescue? |  |
| Smells like a trout farm in here |
| |
| Everton finances on 15:53 - Jan 23 with 4154 views | PinnerPaul |
| Everton finances on 20:18 - Jan 21 by SimonD |
If we take a couple of steps back this probably makes more sense. When a club buys a player there is no initial entry in the profit and loss. The whole of the purchase price is entered into the balance sheet as an asset. However, as an expense, all of that cost has to be charged to the profit and loss eventually.
Thanks to Bosman, we know that a player can leave for free at the end of his contract, and therefore at the time has no residue value. If a player is bought for £8million and signs a 4-year contract, a cost of £2million (£8m / 4 years) is charged to the PnL every year each reducing the asset (the player’s net book value) by the same amount. This is called amortisation. If a club choses to reduce the player’s nbv (called impairment), the equivalent cost has to be charged to the PnL and further amoritsations are based on the revised nbv. If the impairment cost wasn’t charged to the PnL, the whole of the player’s initial cost would not be accounted for. |
Thanks Simon - that makes perfect sense (NOT being sarcastic) | | | |
| Everton finances on 15:56 - Jan 23 with 4134 views | LowerloftLad |
I may have just made this up. But haven't Everton been signing players from the same agent that managed to bring a ton of "premeir league" mercenaries to QPR?. [Post edited 23 Jan 2023 15:58]
|  |
| |
| Everton finances on 16:14 - Jan 23 with 4019 views | TheChef |
Premier league club finances appear to have no basis in reality. |  |
| |
| Everton finances on 16:22 - Jan 23 with 3989 views | terryb |
I may be wrong & imagined it, but I think I was told (Simon?) that Everton have argued that Covid reduced the valuation of their players & therefore the amortisation should be treated as a Covid expense & not charged against FFP.
It would be interesting as to whether the authorities had a counter argument prepared. | | | |
| Everton finances on 16:23 - Jan 23 with 3978 views | PinnerPaul |
| Everton finances on 16:22 - Jan 23 by terryb |
I may be wrong & imagined it, but I think I was told (Simon?) that Everton have argued that Covid reduced the valuation of their players & therefore the amortisation should be treated as a Covid expense & not charged against FFP.
It would be interesting as to whether the authorities had a counter argument prepared. |
See above Terry! (Yes you're right!) | | | |
| Everton finances on 16:29 - Jan 23 with 3950 views | ted_hendrix |
| Everton finances on 15:42 - Jan 23 by Juzzie |
Frank Lampard sacked!! |
Of course he's been sacked, he was a failure as a previous Manager and should never have been given the job at Everton In the first place. | |
| My Father had a profound influence on me, he was a lunatic. |
| |
| Everton finances on 16:31 - Jan 23 with 3941 views | switchingcode |
| Everton finances on 16:14 - Jan 23 by TheChef |
Premier league club finances appear to have no basis in reality. |
Can’t get my head around the fact that Moshiri has put 100s of millions into the club that he saw play Saturday for the first time in 2 years.The championship and Premier league are completely out of control. | | | |
| Everton finances on 20:53 - Jan 23 with 3659 views | SimonD |
| Everton finances on 16:22 - Jan 23 by terryb |
I may be wrong & imagined it, but I think I was told (Simon?) that Everton have argued that Covid reduced the valuation of their players & therefore the amortisation should be treated as a Covid expense & not charged against FFP.
It would be interesting as to whether the authorities had a counter argument prepared. |
Not quite Terry. They reduced the book value of the players (known as impairment) and claimed as a Covid cost. That would, in turn, reduce their future amortisation costs.
I just called up Everton's accounts as that should show the amount of their impairment. It was less than I had been led to believe, but reading their accounts was like watching a car crash. I wanted to look away, but couldn't.
Their 2020 impairment charge was £26.3m with a further £15.3 the following year. On top of that they have claimed other Covid losses (lost income and direct Covid costs) as £67.3m for 2020 and £14.8m for 2021. £124m for the two affected seasons. However, it has been suggested that they claimed circa £170m. Their accounts state "The Club is continuing to assess the uncrystallised financial impact caused by the COVID-19 pandemic and the Board of Directors strongly believe that a further substantial financial loss, not reflected in the £82.1m* cumulative crystallised figure referred to opposite,
has been incurred by the Club."
* This refers to the £67.3m and £14.8m.
In the small print, their accounts mention significant contingent liabilities which are not reflected in the accounts. This is fees they may need to pay in the future but are not definitely payable. They may have to pay a further £46m in transfer fees for players they have signed - so refers to supplementary payments based on appearance etc. They also may have to pay £31m in future signing on fees and loyalty bonus if certain players are still in the service of the Club on specific future dates.
They also have long term loans totaling circa £125m on top of the almost £250m loaned by Farhad Moshiri. During the 20/21 season they upped a 5-year loan from £40m to £100. They have a 3-year government backed loan to combat the cost of Covid and a another loan of £19m secured against future income.
And we think we've got problems. | | | |
| Everton finances on 20:59 - Jan 23 with 3645 views | Andybrat |
| Everton finances on 20:53 - Jan 23 by SimonD |
Not quite Terry. They reduced the book value of the players (known as impairment) and claimed as a Covid cost. That would, in turn, reduce their future amortisation costs.
I just called up Everton's accounts as that should show the amount of their impairment. It was less than I had been led to believe, but reading their accounts was like watching a car crash. I wanted to look away, but couldn't.
Their 2020 impairment charge was £26.3m with a further £15.3 the following year. On top of that they have claimed other Covid losses (lost income and direct Covid costs) as £67.3m for 2020 and £14.8m for 2021. £124m for the two affected seasons. However, it has been suggested that they claimed circa £170m. Their accounts state "The Club is continuing to assess the uncrystallised financial impact caused by the COVID-19 pandemic and the Board of Directors strongly believe that a further substantial financial loss, not reflected in the £82.1m* cumulative crystallised figure referred to opposite,
has been incurred by the Club."
* This refers to the £67.3m and £14.8m.
In the small print, their accounts mention significant contingent liabilities which are not reflected in the accounts. This is fees they may need to pay in the future but are not definitely payable. They may have to pay a further £46m in transfer fees for players they have signed - so refers to supplementary payments based on appearance etc. They also may have to pay £31m in future signing on fees and loyalty bonus if certain players are still in the service of the Club on specific future dates.
They also have long term loans totaling circa £125m on top of the almost £250m loaned by Farhad Moshiri. During the 20/21 season they upped a 5-year loan from £40m to £100. They have a 3-year government backed loan to combat the cost of Covid and a another loan of £19m secured against future income.
And we think we've got problems. |
And they are building a new ground. Might even go to that one next season😂 | | | |
| Everton finances on 17:30 - Jan 24 with 3363 views | LordPork |
What's now become obvious, following numerous fans telephone calls into Talksport and 5 Live after recent matches is that Everton FC and their supporters are perfect partners.
Don't stop when you drop down to The Championship, keep on going to Division 2. You'll have the best stadium in the League | | | |
| |
By continuing to use the site, you agree to our use of cookies and to abide by our Terms and Conditions.
