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By Tony Attwood
The news has broken that Friedkin Group has pulled out of a takeover of Everton. They were offering £500m for the club, now they don’t want it despite having put in £200m to help finish off the new stadium. Blue Heaven Holdings therefore still owns the club and now has a debt of £200m to Friedkin Group, although I can’t see any details of when Friedkin wants that refunded.
There will presumably be something in the contract of the loan about pulling out. It usually can be done but at a cost (unless the accusation is that those selling the percentage did not reveal all relevant facts. I of course have no inside information on that).
A piece in the Guardian suggests that the “Friedkin pulled out because of a lack of clarity regarding loans 777 Partners had made to Moshiri, to help with the day-to-day running of Everton, as part of its takeover attempt of the club…. The parties agree it is in both their interests for Everton to explore alternative options.”
But we should be aware that this breakdown has happened at a time when football is facing a simple contradiction. More money entered football in 2022/23 than ever before, with the Premier League reaching a turnover of £6 billion for the first time – an increase of 11% in a year when inflation in the UK was 2.8%.
And yet at the same time the financial security of some clubs looks ever more fragile.
The Annual Review of Football Finance 2024 from Deloitte shows that it was the broadcasters who raised the payments. But, and there is always a but, wages went up and transfer fees went up, meaning while income rose by 11%, costs rose by 14%.
And of course there is now a real imbalance in the league. Instead of ten clubs having an above-average income, and ten a below-average income. Thus only six clubs were above average while 14 were below average, showing how the top six are pulling further and further away from the rest even though matchday income was up by 14%, and most clubs increased the price of admission.
However, the really big earner was “commercial revenue” – everything from sponsorships to shirts. Rather interestingly despite being in almost constant decline in terms of league position since 2016/17, with only two of the subsequent seven seasons being better than the one before, Tottenham had a £44m rise in commercial revenue in 2022/23.
In 2022/23, total wage costs increased beyond £4 billion, while clubs’ operating profitability, before transfer deals, fell by 18% to £393m.
So all this looks good especially as wages went up less than revenue – and yet despite all that, profits excluding transfers went down by 18%. Overall the league lost 14% more money (£685m) than in the previous year and that was a loss for the fifth year running. (And if I may add, it is generally a rule in business that you can’t go on losing money for ever).
In fact in 2022/23 only four clubs made a pre-tax profit (Brighton, Manchester City, AFC Bournemouth, and Brentford). Aston Villa made the worse loss of £120m – which doesn’t auger well for their desire to buy new players to make themselves top four regulars slot. Together all the PL clubs owe £3,100,000,000.
None of this means that Everton is about to collapse financially, and despite its awful figures, it is actually somewhat better off than it was a couple of years back. As a result it is not expected that Everton is on the edge of financial implosion, administration and another massive points deduction.
But everything now depends on the stadium actually opening at the start of next year, with all the additional income that will produce – exactly as Tottenham has found with its ground. But the pressures of the financing of Tottenham’s ground has brought ever higher prices within the ground.
This in turn led to the amusing sight of Tottenham supporters claiming that their club’s ground was the most profitable in the country – which it is as long as one doesn’t count the cost of paying for it each year over the next 25 years.
And there is a big difference between Everton and Tottenham as the league table for last season shows.
| Team | P | W | D | L | F | A | GD | Pts | |
|---|---|---|---|---|---|---|---|---|---|
| 1 | Manchester City | 38 | 28 | 7 | 3 | 96 | 34 | 62 | 91 |
| 2 | Arsenal | 38 | 28 | 5 | 5 | 91 | 29 | 62 | 89 |
| 14 | Wolverhampton Wanderers | 38 | 13 | 7 | 18 | 50 | 65 | -15 | 46 |
| 15 | Everton | 38 | 13 | 9 | 16 | 40 | 51 | -11 | 40 |
| 16 | Brentford | 38 | 10 | 9 | 19 | 56 | 65 | -9 | 39 |
| 17 | Nottingham Forest | 38 | 9 | 9 | 20 | 49 | 67 | -18 | 32 |
| 18 | Luton Town | 38 | 6 | 8 | 24 | 52 | 85 | -33 | 26 |
Last season Everton were up and down like, well, the proverbial if you know your old English slang, and had quite a time of it, losing 10 points on 17 November, reduced to six on 28 February, with another two taken off in April.
It appears that they are now in selling mode with talk of Amadou Onana to Aston Villa. At the moment they are showing a profit of around £7m on dealings so far this summer.
I am very surprised that Tottenhams financing of their stadium by the local authority has not been investigated by government officials, seeing as it is paid really by tax payers money without anything in return to show for it, as Tottenham is privately owned and not owned by the public.
Why has this gone ignored by government officials seeing as they are quick to investigate MPs with double mortgages funded by government money but not private owned stadiums, what’s the difference apart from the enormous fraudulent scale that they seem blind to see?
Like with Tottenham and Man City, the bigger the corruption the blinder and slow they are to see.