In December 2021 I wrote the fifth article in this series, now it is time sadly for the sixth. One theme – survival strategy.

Such is the continued demise, the continued mismanagement of our club, that far from discussing the opportunities arising from a new stadium, arising from a successful football team and a booming commercial department, there can only be one thought on Moshiri’s mind, assuming his intent is to retain ownership, and that is survival.

How do we get through the next four months? What happens then?

Firstly, we’ve got to recognise and be brutally honest about the position we are in.

• There’s a huge leadership vacuum in the club
• Our manager and his coaching team are not delivering, the players bereft of form, belief and increasingly, desire
• Financially, it is clear we can not compete with even the clubs in the lower half of the Premier League
• The club’s communication strategy, particularly relating to the board and the fan base is toxic, counter-productive and is in danger of destroying the one leading asset the club retains – the loyalty, passion and support of the fan base.

The leadership vacuum

We have an owner whose intent is not known. He has allowed all of the club issues to reach crisis point before showing any signs of recognising there is a problem. He has to decide what does he want from his investment to date? Does he want to continue, to attempt to recover from a potentially disastrous position, to raise the finances for the completion of the stadium, to bring in competent management, or does he want to draw a line under seven sorry years and sell a distressed asset despite the hundreds of millions he has committed? If it is the latter, then appoint an investment bank and allow them to position, package and sell the club on his behalf.

If it is the former he has to address his own position, his behaviour, his responsibilities and most importantly that of the board and executive team. It is quite clear that this leadership team are not up to the task before them and haven’t been for many years. Today we have a Chairman who first and foremost doesn’t have the health to continue the role, let alone the skills and expertise required of a modern senior executive. For the sake of his health, and that of the club, he needs to be released from his duties. This has to happen in the very short term and should be conducted with dignity.

A new Chair can appoint experienced non-executive directors to bring oversight, to bring fresh ideas, to bring confidence to all our commercial partners, present and in the future, that our pathway is up not down.

We have a CEO who can’t possibly lead us out of the situation we find ourselves in. The same must be true of the majority of the leadership team. These are the people sadly who have reduced our competitive position year on year. Moshiri needs to act, he needs to hire a group of corporate recovery experts, people familiar with turning around failing businesses, people who would know how to restructure in the event of relegation. People who could save us from a potential administration, people who could rescue and maintain the stadium build in the event of relegation.

Our footballing performance

Is there a short term fix to see a turn around in form? Apart from a transfer window rabbit out of the hat, what can be done with this group of players who ultimately will determine our status at the end of the season. What can be done to change their mindset, to refocus their objectives on eighteen games to survive? Can we bring a source of inspiration into the club, someone who can be an inspiration, a motivation that sparks a recovery? Inspirational, motivational speakers exist – they travel globally. Are there former Everton players who can re-inspire a bunch of young multi-millionaires to produce their best once more. Or do we go down the traditional route of a new manager, and look for the famous new manager bounce?

We need the Director of Football to explain the “strategic review” – to clarify the changes made, and the future changes to come. We need clarity over the manager’s position, is his position tenable? Does he fit into the longer term strategy, and if he does, what can change instantly to help him? Similarly if a change of manager is the route the club goes down, what type of manager are we looking for, what additional support would that person receive to halt the merry-go-round of recent years? Who will decide, who will appoint?

Finances

It is clear we don’t have funds to address the glaring omissions in our squad. A combination of reduced revenues arising from lower than budgeted league positions, fewer TV appearances, and the now complete absence of USM related sponsorship funding is hitting us hard, squeezing an already perilous profitability and sustainability position and of course, the future cash calls from the next phase of the stadium build. Moshiri’s public admission that the stadium is now costing £760 million shows the extent of future cash requirements.

Moshiri has invested £450 million to date in the stadium, and is looking to raise a further £250 million from equity investors and/or a combination of debt and equity. Until such a time as this funding is completed, then funding for players will be extremely limited. Even escaping relegation would be no guarantee of significant sums for the summer. We must expect further sales of key players to fund new additions.

Fresh investment will require Moshiri to accept a sensible price for newly issued equity. If, as is believed, he places a current value of £450 million on the club, the prospects of anyone investing at that price seem extremely slim. His argument that this is what he has invested in the stadium and should be reflected in the value of the club is weakened by current losses, the threat of relegation, and the cost of significant player investment in the future.

Selling the club completely would allow sufficiently wealthy investors to fund the stadium and repair the balance sheet which despite Moshiri’s significant funding once more requires attention. Given our still difficult profitability and sustainability position, new owners, regardless of wealth, would not immediately be able to spend extensively. Not unless there are significant and profitable player sales to balance the costs of bringing fresh talent in.

Relegation would bring a whole series of challenges, challenges which I think the existing board would find difficult to deal with. My earlier comments regarding corporate recovery experts, senior respected non executive directors and a heavyweight chair would be very relevant if relegation was to occur.

The club’s revenues would fall by half despite the receipt of parachute payments. An already loss making business could only have two options, both of which would have to be exercised. Firstly is a sale of senior players (i) to reduce costs (ii) to generate cash. Unfortunately, relegated clubs in a forced sale position of key players see a significant reduction in the value of those players. Some studies suggest by up to fifty percent. Secondly there would have to be significant cost cutting across the business including unfortunately, a loss of headcount.

What happens to the stadium would depend on whether the ownership has changed or whether guaranteed funding (new investors) can be agreed whilst we are a Premier League club. If neither are achieved then depending upon the contractual agreements with Laing O’Rourke, the stadium build might be halted. In a worst case scenario, in the event of no new investment, no new owners and Farhad Moshiri unwilling or unable to continue funding then that’s where the prospect of administration raises it’s head. There are other options, the partially completed stadium could be sold to real estate investors who would complete the stadium and lease it back to the club. However most examples of a separation of club owners and their stadia tend to have very poor outcomes, and this option would be a strictly final option. Nevertheless the current owner and board have to have strategies in place depending upon our circumstances.

Communication and fan relationships

It might seem an odd inclusion in any survival strategy discussion, but as identified a survival strategy has to start now, and has to include repairing the damage to the relationship between board and fans. I’ll make it clear once more that there is no room for threats, for anti-social behaviour from anyone purporting to be an Everton fan. Any individual minded to do such, should in my opinion, be cast aside in exactly the same manner as someone using racist, homophobic or any other such inappropriate and disgusting behaviour. All reasonable people accept a total zero tolerance to this.

The existing board whilst in place, and certainly any incoming board or individuals appointed have to recognise that the vast majority of Evertonians, indeed virtually all Evertonians, are the greatest asset the club has, both in good times and as now in difficult times. Most clubs take support for granted, very few genuinely value their supporter base. Even fewer actually distance themselves, damaging the club’s branding and image, and most importantly that of their fans, especially fans with a track record of incredible loyalty, passion and as with the events of last year being the significant factor in last year’s Premier League survival.

To turn that asset, to reduce its effectiveness is so damaging to the club, and provides such a boost to our competitors. Fans, especially so heavily invested as Evertonians, have a right to protest peacefully whilst respecting the safety and security of those that work at the club. They have a right to try and fill that leadership vacuum at the head of the club. They have a right to demand more from an errant owner and an inadequate board. In response, the owner and board have to accept their responsibilities, their obligations and act like the adults in the room. Their leadership skills have to come to the fore right now. They need to know how to bridge the gap, not widen the chasm. As part of a survival strategy, that has to start right now.

The new reality for the existing board and owner is having a survival strategy in place that can be executed without delay. It has to include clarity about ownership, Moshiri’s intentions, the prospects of finding new investors. It has to include a commitment from Moshiri to make board changes as soon as is practical. It has to include how we resolve the manager’s performance – and if change is made how that fits into our longer term football strategy. It has to include how we address the financial performance of the club and our current funding requirements. It has to include what our plan is should we be relegated. It has to include how the current board reconcile their relationship with the fan base.

A failure to create a strategy for all of the above, a failure to then execute that strategy can only reduce our chances of survival even further.

Doing nothing is no longer an option. That’s the challenge facing Farhad Moshiri, the very survival of Everton Football Club.