Thoughts on the 2021 annual general meeting

The degree by which a company wishes to publicise and promote its general meeting is usually a reflection of how the company feels it is performing. Public companies of course, do not have the luxury of influencing the degree of exposure and interest, private companies are much more able to do so. Additionally, the topics it wishes to discuss reflect the relative strengths and weaknesses of different areas of the company’s activities. Who presents, what they say and the degree of scrutiny and challenge to what is said reflect a company’s attitude to governance, accountability and oversight.

With that in mind, last night’s Annual General Meeting was effectively a series of promotional videos by the board members informing shareholders of how well the club, indeed how well they had performed in the most difficult of circumstances. It was not an objective analysis of how the club is performing,

It’s a great shame that the presentations and the promotion of the messages were so insular. Evertonians are generally an educated shareholder and fan base. Collectively, the Evertonian base is more in touch with the reality of local conditions (the conditions in which the club operates) and to a degree, wider macro conditions than perhaps the club gives us credit for. We all know that football, indeed life itself, is incredibly tough at present and for Everton with its multitude of challenges (despite the financial support of Farhad Moshiri) in particular, very challenging times. We recognise, we are a club trying to improve, trying to progress on and off the pitch, but in the most difficult of circumstances.

As well as the lack of objectivity, nor did the presentations offer much in terms of future strategy.

The question that remains unanswered throughout the year, years even, and was certainly not answered last night, is, is the club (company) equipped to meet the challenges of current conditions and meet its more ambitious objectives, success on the pitch, build a new stadium and increase its commercial performance and presence throughout the world ? Even more so, is the club equipped to meet the enormous challenges of the future? The football landscape is changing, the pandemic and its economic, behavioural and social impacts will accelerate the changes that are due in football. Football exists on a business model that is rapidly reaching its expiry date.

I have discussed the deflationary impact of the pandemic previously. From my perspective, we are at the beginning of the process, not the end. Football, particularly the Premier League, has grown on three areas of growth, ever increasing broadcasting rights payments, ever increasing commercial and matchday revenues and ever increasing player values allowing player trading profits and inflated asset values on the balance sheet. I will return to this topic.

The meeting itself

As expected, the key areas of interest for Evertonians were Marcel Brands, his future and player acquisitions/disposals; the stadium – update on planning process, timetable for work starting and progress on financing; Sasha Ryazantsev on the club’s finances followed by a question and answer session.

Much of this will be covered elsewhere but in summary:

Marcel Brands

  • Confirmed the summer window as “one of the most difficult and weirdest windows ever”
  • Stressed the reduced spending powers across football impacted their ability to move players out. As said frequently here, confirmation of a buyers market, something that will continue and likely deepen
  • Six players acquired, nine players sold
  • Current squad size twenty seven (not including Bolasie and Besic). Ideally twenty three or twenty four (three goalkeepers, eight defenders, six or seven midfielders and six attackers)

The scale of the number of outgoing players (including loans) in his two plus seasons here is staggering. Seventy four player exits in total. This reflects one of the board’s greatest failings in the time Moshiri has been a shareholder. Very poor player acquisitions (apart from last twelve months) and the inability of the academy to produce players either suitable for the first team or attractive targets for other clubs. When one analyses board performance, the question must be asked of the board why was this situation allowed to develop? The legacy issues that Brands inherited clearly impact our financial performance and our ability to acquire new talent.

It should also be noted that there is currently no answer as to whether Brands’ contract is extended beyond June 2021. One might have thought the AGM a perfect time to make such an announcement.

The Bramley-Moore stadium

Updated by club Chief Executive Officer, Denise Barrett-Baxendale and Chief Finance and Commercial Officer, Sasha Ryazantsev, the club reported on continued delays in the planning application, caused by modifications to the design and thus the planning application itself, plus resource issues within the Liverpool City Council planning department. The club expect a determination in “the coming months”.

Denise Barrett-Baxendale reported on continued discussions with potential lenders, but objectively was unable to report on any definitive progress.

Sasha Ryazantsev confirmed that up to the end of the financial year (June 2020) the club has spent £39 million and anticipates having spent £50 million before the end of the current financial year.


I have provided detailed analysis of the club’s financial performance here following the publication of the accounts in December. Much of the same data was presented by Sasha Ryazantsev last evening. My personal view, and this is not unusual for companies to do so, was that the figures were presented in the best possible light. A more balanced view would recognise the reliance on USM for commercial and sponsorship income growth, the figures were boosted by a one off payment of £30 million for a naming rights option in favour of USM, player costs remain stubbornly high, cash flow measures were used to preserve cash (including a large increase in monies due to HMRC) and despite Moshiri’s continued financial support we rely upon Rights and Media Funding (plus Metro Bank) to continue operations. All Premier League clubs are in a similar position of extending credit lines to meet the reduction in income whilst costs remain fairly constant. I would say this though. It is disappointing, and perhaps reflects the underlying weakness of our current business model, that we revert to using a lender such as Rights and Media Funding rather than mainstream lenders.

The Board

I have held the opinion, and continue to do so, that the Everton board needs additional resources and talent. I have argued on numerous occasions that from a governance perspective having a board comprising of four executives falls short of best practice. Full accountability and oversight is impossible to achieve if the executive are managing and most importantly measuring their own performance. This is not a reflection on individuals it’s an observation that would be true of any company and would be reasonably asked by almost all shareholders.

Perhaps the board should be compared to those of its peers and rivals. If I look at the composition of most of the boards of the “big six” I see a range of skills and experiences greater than that of Everton’s. That is an undeniable truth and for me, remains a huge concern.

How in the most challenging of circumstances (part driven by external forces, part driven by our own actions) can we catch up, let alone overtake competitors with more resources if we cannot match them with our ability to create strategy, execute strategy and plan ahead for a different world in football? That ability to do so is only as good as the relative strength of our board versus that of our peers.

Our peers’ boards have at their disposal individuals who have run/continue to run global businesses. They have independent directors who bring external opinion and experience, yield significant commercial and political power, who make their executives accountable and provide oversight on behalf of shareholders.

I make the comparison not to attack or pour scorn on the efforts of our board. I make the comparison because football is a highly competitive industry where only the very strongest succeed, the rest just exist. Like every Evertonian (and no doubt the board too) I want to see Everton succeed, win trophies, to be genuine leaders and visionaries in the game in every sense (as we once were), to be the embodiment of Nil Satis Nisi Optimum. Despite the Chairman’s ebullient opinion of his board members’ talents (and to be fair it is not without talent) we are not strong enough at board and executive level to achieve what we must achieve.

Respectfully, Moshiri must address this.


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3 replies »

  1. Paul, just a couple of observations. If we are currently ‘borrowing’ from the likes of Rights and Media Funding, to enable us to operate on a short/medium term basis ie to improve our current cash flow, surely this begs the question,our status as commercial borrowers, must be quite low.

    It’s a bit like a consumer with a good credit history can currently borrow substantial amounts at between 2-3% APR, whilst the unemployed or those with a poor credit standing are forced to obtain the same amounts at anything between 9-12% APR. I think it will be a tough ask then, to raise the required 250-300 million (assuming Moshiri provides additional funding) to complete the BMD project.

    I have banged on for years now about the very insular makeup of Everton’s current board and senior executive team. Bill’s policy of ‘recruiting from within’ or people with an ‘evertonian’ background will only end when he ceases to have an influence at the club.

    Sadly , he still lives and operates in the football world of 30 years ago, where transfer deals were completed with a wink and ‘gentlemans’s handshake with all concerned parties. The gap between ourselves and our competitor’s will continue to widen whilst we settle for second best at the top.

    I exclude Marcel Brands from any such reservations , as he has had a difficult job to perform clearing up the mess of past regimes. I hope for Everton’s sake that he is able to finish the job he started and doesn’t depart in June this year. He is the one Director who above all, tells it as it is, despite how unpopular he may seem at the time, with a perceived lack of incoming transfer business.

    The next 3-6 months will be very interesting, obtaining planning permission is the easiest part of the equation, what happens after that is key to all our hopes and aspirations.

  2. An interesting read ,Paul,thanks. I feel a bit angry, and also disappointed. Moshiri has invested hundreds of millions into the club. HE has shouldered ALL of the financial risk. Why does he feel he has to resort to the sort of spin we see from the government in its handling of the pandemic? Tell the truth! We are all adults, and empathise with the challenges. If I were a shareholder, I would be livid to be fed this sort of nonsense.

  3. Paul, as a former equities analyst, I can say that this is not a dissimilar experience to when public companies disappoint on quarterly earnings. On their conference calls, they’ll keep the reporting of results factual. They’ll then explain what a great job has been done in a tough operating environment. Then they roll out the Chief Technology Officer to whitewash everyone with their new technology developments, with the implication that it will be expensive to bring to market. Compare to the AGM – disappointing financial results, great job offloading surplus players in a tough market, but look forward to the new stadium being brought on stream, subject to new debt and equity injections.

    In my opinion, this is par for the course in terms of this type of meeting. The only difference is in terms of future funding.
    Everton Football Club is not a public company and therefore does not have access to the money that’s swirling around the stock market at the moment. Unfortunately, due to valuation, that’s not likely for a while.

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