The views below do not necessarily reflect those of Everton
EVERTON chief executive Robert Elstone has launched a passionate defence of the club’s board of directors after being told of planned protests by unhappy fans.
Mr Elstone has hit back after growing rumours the club is on the brink of administration, and that chairman Bill Kenwright has turned away potential billionaire new owners.
Slamming the speculation as “crazy”, Elstone said the club’s asking price is not deterring any interested investors, and insisted that almost 90% of the Everton's income is spent on the players, training ground and coaches.
As the club released new accounts that showed rising debts, a soaring wage bill and a pre-tax loss of £3.1m, Mr Elstone used his blog to defend the club's health.
‘The past fortnight has seen much speculation on the financial state of our Club,’ he wrote. ‘Our Accounts are later than usual, and although not late in any legal sense, I hate to say it, being later than prior years suits the agenda of a small minority of fans who seem intent on painting only the bleakest picture.
‘According to the minority, it seems that late accounts can only mean one thing; Everton must be in ‘financial meltdown?' The Blues are set to go bust? Of course, it's simply not true. A couple of conversations I've had recently have highlighted some of the things being said.
‘A week last Saturday, before the Cup tie, I spoke to a couple of passionate and committed fans who asked me if I'd heard there was a demonstration planned. They offered to show me the texts going round to rally the fans.
’When I asked why there was a protest, the response was that fans think our Directors have sold all our assets and have pocketed the money. They then said the Chairman was guilty of repeatedly turning billionaires way. I sensed a degree of embarrassment in their voices. Both points are clearly crazy.
‘Truly, the billionaire is yet to knock on the front door at Goodison. Truly, our longed-for Russian, sheikh or our media mogul has NOT been put off by a ridiculous selling price.'
Elstone also denied claims the Blues have become a selling club; failing to invest in recent transfer windows while allowing players to leave.
‘After the Blackpool game on Saturday, I spoke to fans in the Joe Mercer lounge who questioned the lack of investment in players. Four players have left - Yakubu, Yobo, Vaughan and Piennar and, as I kept being reminded, no one has arrived.
‘Of course, the first three have been loaned out with the blessing of the manager and will either be back in the summer, or will generate us substantial transfer income. And I can assure you, we worked incredibly hard, for almost two years, to keep Pienaar, offering a lucrative new contract that in the end was rejected.
‘My response was to pull out the team sheet; to look at the manager's starting line-up, to look at the depth and quality on the bench. No one could deny it was an enviable team sheet. We had and we still have a great squad of players. A squad tied down for the long term.
’A squad enhanced by the acquisition and development of some great youngsters. Following long and considered discussion last summer with the manager, a squad that the board was prepared to commit to, and invest in. A squad, as we've all seen, that's capable of competing with the best.
'Further, as for ‘asset stripping', there are many club directors out there who pay themselves generous salaries and enjoy plenty of perks. Ours don't, not a penny in any salaries or expenses; not even the Chairman's record-breaking mobile phone bill!,' he wrote.
‘Whether we like it or not, it really is all about money. So where does our money go? The £50 million we get from Sky, or the £20 million we earn through gate receipts, or the new Kitbag deal?
‘The simple facts are approaching 85p in every £1 we bring in, ends up one way or another at our training ground. From young prospects, to scouts, to medical support, to coaches and, of course to our first team squad, almost £70 million, out of our £80 million of income ends up at the Finch Farm complex. And quite right too. We wouldn't want it any other way.
‘Of course, we've plenty to show for our money. We have a great Academy and, according to almost every Evertonian, as I said above, the best Blues' squad in years; a squad we all believe will see us in Europe next season.
‘That investment, and most specifically a player wage bill that's increased significantly over the past three seasons demonstrates one thing above all else and that's ambition. It shows Everton has a Board of Directors that wants, and pushes hard for success on the pitch. Surviving on what's left? Well that's quite a challenge. The remaining 15p has to go a very long way, supporting the ground, the pitch, our matchday operation, our ticket office etc., etc., etc.
‘Of course, fans want and deserve ambition. But, fans who are quick to criticise and look for failings are also quick to conveniently interpret ambition as financial mismanagement. If we don't invest, we lack ambition. When we do invest, we're putting the Club at risk!
‘Not one we are going to win. It is fair to say however, that our pursuit of success has stretched our finances, something our Chairman hasn't shied away from saying on a regular basis. Spending every last penny strengthening the team has meant that we spend every day of every week looking to drive revenues and raise funds. It means financially, no one could ever describe us as cosy.
‘But then again, very few clubs are particularly comfortable. In football, if you're not pushing finances hard, why aren't you?
‘And, when you push hard in today's financial climate, auditors want more assurances and lenders want more comfort. Over the past two or three weeks, that's exactly where we've been. But that's also where many Clubs are, indeed that's where many businesses are; in a financial world with a very different outlook and with a new set of rules.
‘I'm pleased to say our accounts are now signed off, with a clean audit report. They have been published this week and show total income, in tough times, that has remained at £80m.
‘However, away from income driven by on field performances -by league position and cup progress, other revenues increased. Matchday revenue per game held-up well with increased season ticket numbers and higher average attendances, albeit in 2009/10 we missed out on a cup run which saw a small decrease in total receipts, and our sponsorship money improved with the new Kitbag deal.
‘Costs also increased, and rose more rapidly than income. With further investment in player wages, - specifically, Heitinga, Distin and Bilyaletdinov replacing Lescott, our wage to turnover ratio increased.
‘It's still under 70% and if we included our shop turnover and our catering revenues (neither is included in our accounts as they are both operated by third parties), the wage/turnover ratio remains under 65%. And did we make a profit? taking total costs from total revenues, we made a small operating loss - the measure of how we're performing before player trading.
‘Football balance sheets are unusual and unlike most other businesses. In our case, as a result of accounting convention, Jack Rodwell, Tim Cahill, Mikel Arteta, Seamus Coleman and many more players are recorded at or near to nil value and certainly way below market value.
‘As far as our published balance sheet goes, our assets are hugely undervalued. Our debts, however, are recorded in full. I think we'd all agree the most important number on the balance sheet is total debt and at May 2010, our accounting period end, total debt was £48m (£41m in 2009), an increase explained by the continued investment in players and a rising player wage bill.
‘Debt needs to be managed and ultimately repaid and it should be recognised and acknowledged that Everton has a strong finance team and the long term support of our bankers and lenders.
‘Specifically, the Club has built and benefited from an eight year relationship with our bank, a partnership which is founded on the strength of the management team at Goodison, the stability in our Boardroom and two decades of top flight experience ‘racked up' by a Chairman and manager envied across the Game’.
Everton boss David Moyes is ready to sign Preston keeper Andy Lonergan in a shock £750,000 move.
Lonergan is heading for Goodison today and will start training with the Toffees but will not be able to play for them until next season.
Moyes gave Lonergan his debut at Preston a decade ago and has lined him up as competition for first choice Tim Howard.
Lonergan is for sale at Preston who will gladly tee up the deal now - and are to get Everton reserve Iain Turner on loan in exchange.
Turner could go straight into Preston’s side, putting Lonergan in cotton wool to avoid injury and make sure there are no snags before his switch to Everton.
North End boss Phil Brown has been tracking Turner and will give him the chance to become part of the move on a permanent basis.
Lonergan has been chased by several clubs recently, but the chance to go to Everton - with the hope of starting in the top flight is too good to refuse.
Everton goalkeeper Jan Mucha is to hold talks with manager David Moyes on Friday about his future at the club.
The Slovakia goalkeeper signed from Polish side Legia Warsaw last summer as cover for Tim Howard but has made only two appearances - both in the Carling Cup.
The 28-year-old said: 'I thought I would be in a better situation than I am. I have asked the manager if we could have a talk. If Tim extends his contract and I will continue to be regularly on the bench, I will start to look for a new club.'
EVERTON are sweating on the fitness of midfielder Jack Rodwell – after he was withdrawn just 12 minutes into England Under-21s’ friendly against Italy yesterday.
The 19-year-old limped off with what appeared to be a groin injury early on in the match in Empoli.
Rodwell had started in central defence but was taken off. He will now return to Merseyside where he will be assessed by Everton’s medical staff ahead of Sunday’s 4pm kick-off at Bolton.
A STRONG Everton reserve side scraped a narrow win in a tight encounter with Marine in last night’s Liverpool Senior Cup quarter final.
A bumper crowd of 800 saw the non-league team dominate for long periods before being dealt a sucker punch in extra time through Thomas Donegan’s fine finish.
The game started with former Everton youth player Sean Doherty stretchered off but Marine rallied to create a number of chances with Jamie Rainford and Neil Harvey both going close.
At the other end, Marine keeper Ryan McMahon produced an excellent save from John Lundstram’s shot but the Marine pressure continued in the second half with Everton struggling to create chances.
Liam Rushton headed over on 50 minutes and Harvey had a volley narrowly deflected wide six minutes later but gradually Everton gained a foothold with Jordan Barrow a commanding presence in midfield.
Joe Fowler wasted another good chance for the Mariners but with only a minute of the first period of extra time left, Donegan placed an accurate shot under the advancing McMahon for what proved to be a scarcely deserved winner.
Kieran Agard last night revealed how Everton boss David Moyes sold him on a move to Kilmarnock.
The Goodison striker is delighted to be on loan at the Rugby Park outfit after a similar switch to Peterborough was cut short after just one game.
Rising star Agard, 21, has made five appearance for Everton, including a run-out against Benfica on the Europa League and his Premier League debut against Chelsea.
Now he hopes to make an impression on the SPL - just as his former Goodison pal Lukas Jutkiewicz did at Motherwell.
Agard said: "I'd been on loan at Peterborough and played one game but then they changed manager and agreed to let me go back to Everton.
"I was training at Everton last Monday and the gaffer told me Kilmarnock wanted to take me on loan.
"David Moyes recommended the club and said it would be a good move so I jumped at the chance.
"The manager pointed out that the SPL is a good league and Kilmarnock are doing well.
"Killie were interested in getting a striker so they wanted me to come up and the manager felt I could do well up here. He encouraged me to go up."
David Moyes' uphill battle to compete at the top end of the Premier League was revealed yesterday in annual results which showed Everton are spending nearly 70 per cent of their income on wages and running at a £3.1m loss despite maintaining near record turnover.
Moyes said earlier this month that he feared key players may depart if they cannot be convinced that the club has ambition and, though chief executive Robert Elstone delivered a strong riposte yesterday to those who have perpetuated rumours that the marginally delayed publication of the accounts has put the club at risk of administration, the figures do reveal the club's struggle to keep up with Premier League spending elsewhere.
A wage bill up to £54.3m – 69 per cent of turnover – and continued investment in players have contributed to the level of debt at the club rising from £41m in 2009 to £48m. Though Elstone argues that the Everton side who beat Blackpool on Saturday constituted "an enviable team sheet", Moyes has been able to spend only what he has raised for the past three years.
The £21m investment in Sylvain Distin, Diniyar Bilyaletdinov and John Heitinga in 2009 followed Manchester City's £22m purchase of Joleon Lescott, while last year Moyes spent what money was available on securing Mikel Arteta, leighton Baines, Tim Cahill and Jack Rodwell on new long-term contracts. The accounts revealed that the sale of the club's Bellefield training ground was used to pay off previous loans while turnover remained static in the year to May 2010: down £600,000 to £79.1m, with the absence of the previous year's Cup run a contributory factory.
Everton's problem is a fundamental one: as Elstone put it, "the billionaire is yet to knock on the front door at Goodison". The decision of a Government inquiry to refuse plans which would have seen Everton relocate to an out-of-town stadium at Kirkby have proved as gravely significant as Everton always feared. It prevented them from developing a facility-led development model, which would have radically increased match-day revenues to help meet wage and transfer market demands. Everton take £600,000 on a match day; Arsenal pocket £3m.
Though dissatisfaction among some fans has arisen from the departure on loan of Yakubu Aiyegbeni, Joseph Yobo and James Vaughan, and the sale to Tottenham of Steven Pienaar, with no players coming in during January, Elstone said that the loan deals had "the blessing of the manager". Sources in Yobo's native Nigeria suggested yesterday the 30-year-old did not want to return to Goodison, having been loaned to Fenerbahce. Elstone also said Everton had "worked incredibly hard, for almost two years, to keep Pienaar, offering a lucrative new contract that in the end was rejected".
Fans demand that the club's chairman, Bill Kenwright, reveal his asking price for the club, though that is hardly the way to sell any asset. Kenwright has said that he wants to sell and with the level of support holding up so well – average attendances for Premier League games at Goodison Park increased from 35,667 to 36,729 and season ticket numbers increased by 8 per cent from 23,717 to 25,671 – it is hard to believe that a new stadium would not have enticed a new proprietor.
"The simple facts are approaching 85p in every £1 we bring in ends up, one way or another, at our training ground," Elstone said. "From young prospects, to scouts, to medical support, to coaches and, of course, to our first team squad, almost £70m, out of our £80m of income ends up "
But with Arteta and Baines the subject of interest from Arsenal and Bayern Munich respectively, that £70m may not be enough. Moyes joked two weeks ago that even Crawley Town had outspent him in January – which they had – and with the relegation-haunted sides of the Premier League displaying far more inclination to spend, Everton need a considerably richer Russian than Bilyaletdinov to arrive at the door in a hurry.