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Where The Money Goes

Robert Elstone, 13th January 2012 - 18:11

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Robert Elstone

Robert Elstone

Posts: 39

Robert is Everton's Chief Executive.

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I spent almost two hours before the Swansea game with representatives of the Shareholders' Association answering questions on the Accounts. I spent time at the fans' forum just before Christmas talking through our numbers. I have looked back through my blogs and see how we've explained on many occasions our finances, our debt levels and our relationships with lenders. We have also explained how we generate our money and where we spend it. I recently presented a review of our 2011 financial results to the media and to our fans on evertontv. I've been through the ins and outs of our finances many times and I honestly don't know any other Clubs and organisations that stand up and respond to that level of scrutiny.

Everton accepts the close scrutiny of its fans. Contrasting with others, we stand up to that accountability. Fans have a right to know about their Club and we respect that. And almost all our fans respect there's a right way to go about getting the answers they want.

One question we regularly get asked and one question thrust into the face of the Chairman last weekend is ‘where's the money gone?' The answer is within our audited and publicly available accounts but that response, the response fans might get back from some Clubs, we know isn't the one you want. And we want to be more helpful so let me run through it again. Here's where Everton's money has gone...


Over the past five seasons, Everton's annual income has increased by over 60%, from £51m to £82m.  In those five years, we have generated £368m, the 8th best in the Premier League.  Motivated by nothing other than being more competitive on the pitch, much of that increase has been spent on an ever-increasing wage bill, from £38m in 2006/07 to £58m in 2010/11 - a cumulative wage spend of £244m, the 10th highest in the Premier League, representing 66% of every penny we earn. Over that period, as a result of being better than our rivals at negotiating, recruiting, signing, preparing and coaching players, we've finished an average of 6th, an enviable performance. I make no apologies for asking you to re-read this paragraph.

Other operating costs over the five year period, everything other than wages, including the maintenance of Goodison and Finch Farm, our utility bills, rates, insurance, police costs, security, travel, marketing, food and drink bills in our lounges, academy, scouting and medical expenses and many other costs have totalled £104m. In addition, we have paid £19m of interest and finance charges to our lenders. It means before buying any players, making the relatively small repayments on our long term ‘mortgage', investing in new technology, furniture and fittings, we have ‘broken even'. The money we've brought in has paid our wages, our overheads and expenses and the interest on our borrowings.

More precisely, over five years, we have generated a £1m ‘cash profit' to fund buying players. Of course, we've spent much more than this buying players. Over the same five-year period from June 2006, Everton paid out £94m (including agents' fees) on a stream of internationals like Johnson, Lescott, Howard, Jagielka, Baines, Yakubu, Fellaini, Bilyaletdinov and Heitinga. The Club sold Davies, Beattie, McFadden, Johnson and Lescott and raised £59m. And, accordingly, after all ins and outs, a net £35m has been spent buying new players.

Across these five seasons, we've also spent a further £3m on capital equipment, things like lawn mowers and lighting rigs, computers and carpets, ‘timelines' and technologies.

So how have we paid for £35m of players and £3m sundry equipment? It's a simple answer - Bellefield and more borrowing.  The Club's net debt has increased from £22m in June 2006 to £45m in May 2011. At this point, one or two of you might be saying ‘stop spending?'

It can be difficult even for the best of us to get a grasp of finances so maybe the table below, covering the most recent five seasons in total, helps. It shows where every penny has come from and where every penny has gone.

Revenue and Expenditure


Just so there's no stone unturned, and apologies to those who ‘drop off', a season-by-season review goes like this:

2006/07 - we began 2006/07 on the back of an 11th placed league finish and with opening net debts of £22m. We finished 6th with income of £51m. Our wage bill rose to £38m representing 75% of our income, including new contracts for Yobo, Valente, Vaughan and Anichebe and after deducting all the other costs of running the Club we generated just over £1m before paying finance and interest charges on our borrowings. We spent £4m net on new players (money we paid out on signing including Kroldrup, Davies, Johnson and Lescott less money banked on the likes of Rooney, Bent, Kilbane and Davies) and we paid £3m of interest and finance charges. Borrowings increased by £4m to £26m.

2007/08 - 5th placed in the toughest league in the world and significant increase in our income to £76m. A large proportion of the increased revenues went to fund a wage increase of £7m, to £45m, including new contracts for Cahill, Arteta, Osman, Hibbert and Rodwell. Other operating costs increased to £22m and we earned a profit of £8m. A significant part of the additional money brought in went on signing new players with a net spend of £15m (further money we paid out for Kroldrup, Johnson and Lescott and new spending on the likes of Howard, Jagielka, Yakubu, Baines and Pienaar, less the money banked for Davies, Kroldrup, Beattie, McFadden and Naysmith). We also paid another £4m of interest and finance charges. Borrowings increased by £11m to £37m.

2008/09 - 5th again and, as we all remember, an FA Cup Final. Income grew to £80m partly as a result of reaching the Cup Final. Wages rose to £49m with new contracts for Neville, Rodwell, Howard and Yobo. Other costs remained flat at £23m and we earned a profit of £8m. We spent £6m net on players (payments for Yakubu, Baines, Howard, Kroldrup, Lescott and Fellaini, less monies in for McFadden, Kroldrup, Beattie and Johnson) and again incurred £4m of interest. Borrowings again went up, this time by a modest £1m, to £38m.

2009/10 - an 8th placed finish and a £1m drop in income to £79m (Europa League income not quite replacing the prior year FA Cup income). Wages continued to rise by a further £5m to £54m including new contracts for Jagielka, Vaughan, Saha, Cahill, Rodwell and Coleman. Other costs increased by £1m to £24m and we earned a profit of £1m. We spent £3m net on players (payments out on Yakubu, Fellaini, Bilyaletdinov, Distin and Heitinga, less monies in for Johnson, Rooney and Lescott) and incurred £4m of interest. Borrowings were up by £7m to £45m.

2010/11 - 7th in the League and income up to a record £82m. Wages rose more rapidly to £58m, to 71% of turnover, including new deals for Baines, Arteta, Osman, Hibbert, Coleman, Anichebe and Jagielka. Other costs remained unchanged at £24m and we earned a small profit of £0.4m. We spent a further £7m net on players (money spent on Fellaini, Heitinga and Gueye, less cash in for Lescott and Pienaar) and incurred again, another £4m of interest. We also generated £9m from the sale of Bellefield. At the end of the season, borrowings remained static at £45m.


We entered the 2011/12 season with the continued and valued support of a more demanding bank - a phenomenon widely recognised. There is another, ever-more challenging, break-even budget for us all to meet, but with numbers that don't cover our finance and interest charges, approaching £5m, which we still needed to find. We remained confident, based on a strong squad, of another good season - add up the cost and the value of the players on the back of the programme, or the team sheet for Spurs. This is not an ageing, threadbare squad, portrayed by some as amongst the weakest in the Premier League.

Of course, in the last 48 hours the question ‘Where Has the Arteta Money Gone?' has been raised again. The first thing to repeat is the bank didn't force the sale. The £10m instantly became £9m when we paid sell-on fees to Real Sociedad. Sadly, and despite a lot of hard work, £9m could become £7.5m by the end of the year with gate revenues dropping below budget (made even sadder by rumours of the sabotage of ticket sales, programmes and other matchday income). And £7.5m may well become £5.5m as our live TV appearances drop below the budget we set based on previous seasons' appearances.

Even if these attendances and TV appearances pick up, out of what's left, significant money has gone on new deals for Marouane Fellaini and Ross Barkley, we've brought in James McFadden, Marcus Hahnemann and Landon Donovan and our newest arrival, Darron Gibson. It feels like we're getting the most for our money and whatever money is left will be stretched, squeezed and re-invested. The Chairman and the Manager have spent the last two months looking at several more potential acquisitions and as always, on all football-based matters at Everton, it will be the Manager making the decisions.

In truth, the answer to the question is simple and we can add in money from other player sales. The money flows into Finch Farm - in player wages, transfer fees, and the expenses of one of the country's best training grounds and academies - just look at the numbers and tables above. But what's behind the question is a lot more difficult. Constantly, relentlessly looking to improve our competitiveness on the field, but as always checked by the money in our pockets, the constraints imposed by our lenders and our responsibilities as custodians.  A challenge, indeed a tension we seem to spend every waking minute managing.

So that is our financial position explained - completely and comprehensively - in order to provide our supporters with every piece of financial information at a level we believe no other Premier League club has done before.

Safe and enjoyable trip to those making the journey down to Villa Park and here's to three points.

Latest Blogs by Robert Elstone

Jack PayneGeorge Muntelo has hit the nail directly on the head !

Sunday 15th January 17:17 Report Comment

Alan JonesPeople demand an answer about finances then moan when they get it, the same about the Gibson transfer - they moan we spend no money then some moan about spending it!!

Sunday 15th January 02:47 Report Comment

William McCoolWhat exactly does "Other Operating Costs - All Overheads and Expenses" cover? Could we get a more in depth explanation of this? £104m on seems a lot of money.

Sunday 15th January 01:59 Report Comment

barry montgomerywen is the money going to be available to let moyes true potential show and put the club back where it belongs at the top

Saturday 14th January 17:33 Report Comment

Wayne BrownWhy do wages go up for new contracts but never go down again when we sell someone?

Saturday 14th January 13:20 Report Comment

jon murphyOr Maynard from Bristol City. His contract runs out in the summer. I'm convinced he could make the step up

Saturday 14th January 11:56 Report Comment

Michael OatesSo you pick and choose what you want to print , even non-offensive comments dont get printed if there is so much as a strong negative comment !

Saturday 14th January 11:51 Report Comment

paul Landryseems you cannot post any sort of criticism about how our club is run ,how many posts dont appear?

Saturday 14th January 11:42 Report Comment

peter sargisonid like to see the huddersfield starlet bought at whatever the cost, young rhodes is a prolific and natural goalscorer and would cost about 4 to 5 million , a must buy

Saturday 14th January 10:55 Report Comment

karl goodwinI have heard a roumour Everton have sold Finch Farm and currently rent the site,true or false anybody know

Saturday 14th January 10:52 Report Comment

Russ FletcherIf Everton accepts the close scrutiny of fans, why haven't you displayed my comments?

Saturday 14th January 10:08 Report Comment

Martin CatesFantastic report, thank you. Maybe as fans we need to look to help raise finance, maybe by all giving say £10 over a million people that's £10m for DM to spend!!

Saturday 14th January 08:33 Report Comment

John Garsideyes good explanation of the moneys in or out, but you missed 2 items out the money in for yakubu and beckford unless i missed that... but anyway coyb...

Saturday 14th January 03:39 Report Comment

jo turnerHow about doing a full run down since Kenwright took over the club,you no the time before we sold rooney and lets see how it looks.

Friday 13th January 23:59 Report Comment

Harris WatsonA very contorted presentation of the clubs finances. Well done Mr Elstone.

Friday 13th January 21:48 Report Comment

steven allengood to see the figures and prudent spending maybe money from yak, beckford, vaughan and pienaar to fund new players

Friday 13th January 21:22 Report Comment

John CarrollAn excellent presentation of the finances. Well done Mr. Elstone. Darren Gibson should be a good addition, at least he will pose a threat from 30 yards.

Friday 13th January 19:46 Report Comment

gavin crookWhat about the beckford, yakubu & yobo money ???

Friday 13th January 19:31 Report Comment

daniel marshI thought it was £1 million for Yak. £1.5mill for peanuts and £2mill for james v?? But anyway the more certain fans boycott games the worse it gets

Saturday 14th January 15:19 Report Comment

Danny ScahillYeah thats the 1st thing I thought too! Wheres the reported £4m for beckford, about £2.5m for Yak, whatever it was for Vaughan and about £2-3m for Peanuts?! He's forgotton 1 or 2 things there...

Saturday 14th January 09:21 Report Comment

David RobertsDoes Mr. Elstone think Evertonians are stupid. He has forgot to include thewages not being paid to Arteta- Yakubu-Pienar -Beckford etc. Maybe he just forgot

Friday 13th January 19:04 Report Comment

Steve McClellandRead the report properly. It covers the 5 years to May 2011.. Yak, Arteta etc moved on after that.

Saturday 14th January 22:19 Report Comment

Austin SmithI'd like to know where has the Arteta, Yakubu, Pienaar, Yakubu, Beckford, Vaughan and Yobo money gone. That amounts to about 20m?

Friday 13th January 18:54 Report Comment

Ajamu MutumwaWow - maginficent explanation. Well done.

Friday 13th January 18:48 Report Comment


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