Everton finances

Everton 2021/22 accounts, analysis part I

First things first, the publication of the annual report and accounts has been left to the last business hour of the last possible day within statutory limits. This, in conjunction with no general meeting provision for shareholders, no engagement opportunities for fans with the senior officers and the refusal to have on the record analysis with the finance director is totally unacceptable from a transparency and accountability perspective.

The directors will point to the provisions within the Companies Act that remove the obligation to hold general meetings (as a private limited company) but that is hardly the point. Engagement and accountability is rarer than profit in this organisation

Profit and Loss Account

Following on from the previous three year £100 million plus losses, the profit and loss account shows a final loss for the financial year 2021/22 of £44.7 million (2021/22 – £120.9 million).

The improvement in the profit and loss account is largely due to the increase in player trading profits of £54.5 million to £67.7 million . At the operating level there was a small improvement of £4.7 million with operating losses of £24.5 million.


Turnover fell from £193 million to £181 million influenced by two contrasting factors. Broadcast income fell by in total of £31.3 million as a result of the return to the normal cycle of receiving revenues from 38 Premier League games and the reduced merit payments arising from a 16th position (10th 2020/21) – a reduction of £13.5 million.

In contrast, Matchday revenue rose significantly as capacity crowds returned to Goodison Park, contributing £15.6 million (202/21 £0.2 million).

Sponsorship income fell for the second successive year from £35.5 million to £35.0 million. The suspension of the various USM sponsorship arrangements in March of  2022 had no revenue impact on in 2021/22 – although obviously for following years will significantly impact revenues (by an estimated £20 million pa).

Other commercial activities, which one assumes is merchandising (Fanatics), kit (Hummel) and food & beverage and hospitality (Sodexo) increased to £15.3 million (2020/21 – £11.0 million).


On the expense side wages fell from £182.6 million to £162 million. This represents a small improvement in the wages to turnover ratio, now at 89.5% (2020/21 – 94.5%). Whilst the improvement is welcome and will continue into this financial year, the wage/turnover ratio remains much higher than the levels (70%) considered sustainable in the Premier League.

Other operating costs returned to more normal levels with the return of spectators to Goodison Park, standing at £36.2 million (2020/21 – £25.4 million)

Costs relating to the new stadium no longer feature in the profit and loss account as they are now considered a capital cost given the increased certainty of the project being completed. Total construction costs to 30 June 2022 stood at £207 million.

Unlike in the previous two years there were no impairments of existing player registrations (2020/21 – £15.3 million) nor onerous contracts (2020/21 – £7.3 million)

As a result of previous impairment charges and the gradual unwinding of the excessive purchases/contracts of the early Moshiri years, amortisation, much loved by accounting and non-accounting fans alike,  continued to fall  from £81.2 million (2020/21) to £68.3 million an improvement of £12.9million.

Compensation was payable in 2021/22 to leaving members of the coaching staff (Benitez and his colleagues) of £10.5 million.

Interest costs rose in 2021/22 reflecting the increase in external debt and rising interest rates. Interest costs on external debt rose to £10.4 million in 2021/22 (2020/21 – £9 million). I will cover the funding requirements separately.

Player Trading

The sale of Rodriguez, Bernard, Digne and Richarlison an increase in player trading profits to £67.7 million (2020/21 £13.2 million).

Cashflow – the life blood of every business

Cash can be generated from day to day operating activities, from investing activities (player trading, shareholder equity injections) and from financing activities (borrowings).


In 2020/21 normal operating activities before movements in working capital saw negative cashflow of £28.4 million (2020/21 £22 million). After the change in balances of creditors and debtors the negative cash flow from operations improved from the previous year to £34.3 million (2020/21 – £63 million.)


Cash from investing activities saw £25.2 million (2020/21 – £48 million) inflow from player disposals, £86 million (2020/21 £115.2 million) outflow from player acquisitions. The new stadium and other fixed assets saw cash outflows of £210.5 million.

As a result investing activities saw a total cash outflow of £271.4 million. (2020/21 £88.9 million).


Financing contributed a net £268 million (2020/21 -£166.2 million) arising from an additional loan from Rights and Media funding of £50 million, £229.3 million in shareholder loans from Bluesky Capital and the repayment of the repayment in part of the Metro Bank loan £3.75 million and interest payments of £7.5 million (2020/21 – £4.8 million).

As a result of the above, cash in the bank fell by £37.6 million to £32.4 million.

Director’s remuneration

Everton’s four person board, including three executives) received £3.1 million (2019/20 – £4.2 million). The highest paid director received £868,000 (2020/21 £2 million – Marcel Brands).


Aside from shareholder loans, Everton have a £150 million 5 year facility with Rights and Media Funding which appears fully utilised. In addition a £30 million CLBILS facility with the club’s bankers Metro Bank which stood at £26.25 million on June 30 2022.

In total, external debt stood at £174.1 million (2020/21 £128.3 million) an increase in borrowings of £45.8 million

Share capital and reserves

At the time of the accounts, £135,000 of ordinary shares, a share premium account of £324.9 million, a negative profit and loss reserve (accumulated losses) of £407.5 million) and a £377.6 million shareholder loan from BlueSky Capital, a company controlled by Farhad Moshiri.

As a result shareholder funds stood at £295.1 million (2020/21 £88 million)

Post balance sheet events

BlueSky Capital provided a further £70 million of shareholder loans treated as equity.


The club continues to be caught in a perfect storm of underperformance on and off the pitch. Whilst improvements have been made, it remains the case that the cost base is too high relative to income. Other than increasing performance related income on the pitch and/or a huge up tick in commercial performance the club will have to rely upon further cost cutting measures and asset sales (players) to become profitable.

Next year’s accounts will not include USM income (estimated at £20 million in 2021/22)

From a financial perspective the club is entirely dependent on Moshiri’s willingness and ability to keep funding extraordinary losses and the building of the new stadium.

I will cover in detail (in part II) Moshiri’s funding and in particular the auditors concerns regarding the future of the business (going concern) in the event of relegation this season.

From a regulatory perspective, and the alleged breach of profitability and sustainability rules, I’ll make two points. The club robustly defend their position and believe they can demonstrate compliance as in previous years.

I, albeit with my own estimates, have questioned this. I accept I am not privy to the club’s internal data, but I am fascinated by how given the level of published losses and the use of publicly available information on how to make such calculations that is the case. Whilst accepting that with a commission due, it is difficult, the club must (in my opinion) present a more detailed explanation of its position.

The great Moshiri experiment, of throwing money at managers and players in the most irresponsible manner; of not having systems nor personnel in place to monitor, correctly advise and act; and most pertinently, of retaining the existing senior executives at board level and within the leadership team has reached the stage where the risk profile of the business has reached untenable levels.

In the necessary race to reduce losses (driven by regulatory and funding concerns) we massively reduce our competitive position on the pitch, losing our best players, becoming unattractive to many promising players, and indeed managers and coaching staff. Additionally we become less attractive to sponsors and partners, particularly in an increasingly competitive Premier League. The best of the rest premium has been eroded by our performance. We are now in the business of expecting much more from much less.

We have a huge capital project in the new stadium. Funded and completed, it will benefit the club in numerous ways not least increased revenues and profile. However, the funding of the project is not secured. There are suggestions of a deal close to hand – a signing of heads of terms, but again nothing secured. For several years we have been assured funding is close – like Tantalus, however it remains beyond our reach.

Our owner who has now funded the club to the sum of £750 million since 2016, has provided a letter of intent for a further 12 months of funding – perhaps to quell the auditors concerns – it is not however, legally binding.

He has to address the underlying issues which make these accounts so concerning. He has to address the running of Everton Football Club. He has to bring a competent management team, corporate recovery experts into the business. He has to strengthen, without delay, the board. Bring in a new Chair, a new CEO and bolster the board with senior non executive directors.

We can not afford to rely on the people who have got us to this point, without change, the already extremely high risks to the business and the future stadium will only increase. Under no circumstances can he chose to maintain faith in this board – the evidence is there, on and off the pitch and in an, as yet not wholly funded, half built stadium.  He has to change now! The accounts leave no room for delay or equivocation.

Part II will cover in detail the funding and going concern issues.


16 replies »

  1. Thanks for breaking it down into lay man’s terms 👍 that said it’s incredibly concerning that our accountant (by trade) majority shareholder has allowed the Clubs financial position to get into such a mess, more player sales in the summer needed, that’s why Dyche has been brought in to work with a small budget, I agree 100% the board needs removed but so does Moshiri unfortunately I cannot see anyone with any business since buying him out, at least until the new stadium is operational and the clubs financial position is brighter, if we stay up this year I can only see the following few seasons as being difficult, relegation would be a disaster, hopefully no points deduction from the FFP commission but I cannot see how the club will successfully defend their finances to the commission, it’s black and white, we have broken the rules, hopefully just a fine for 1st offence.

    Keep up the great work

    Thanks John 👏

    • I thought in the 2020-21 accounts it mentioned £88m, potentially rising to £138m.

      Such a range I’m questioning the initial £88m let alone the potential £50m!

      I also wonder if strictly speaking player Impairment and maybe even Provision for Onerous Contracts but definitely whether Player Impairment is, should be attributed to Covid and therefore excluded 100 pct from FFP both present and future looking.

  2. Really clear.
    There’s the feeling of trepidation for all of us if FM does not react.
    The ship is sinking, dad!

  3. Thanks Paul, a sensible lifeboat (read) for the unwashed (me), against a sea (financial records) of figures.

    I can only assume the ffp situation relies upon an agreement in place between EFC and the PL. The books and your analysis make it abundantly clear we have breached the terms of ffp rules. It look increasingly like we may have breached whatever was agreed above and beyond the £105m and perhaps needed to do more than just sell Ricky.

    There’s a lot of If’s here!!
    Looking ahead. If investment for BMD does come in, if investment in the club is made, if we have already sold Gordon for £45m and we can continue with the savings from the last set of books,
    if PL status is secured for this season and we do secure naming rights for BMD (which I’ve read will likely be a long term commitment for 10yrs or so), we know what the obvious increases are coming out of a bigger match day return and further commercial opportunities that spin from it.
    If we at the very least add some professionals to the board and reduce the impact of our beloved “Chairman Bill”, is there light coming from our very dark corner of L4?

    Does the ESK have an accountancy Crystal Ball?



  4. My guess for the club’s defence of their regulatory compliance is “the Board of Directors strongly believe that a further substantial financial loss, not reflected in the £90.4m cumulative crystallised figure referred to above, has been incurred by the Club.”

    I am not confident in that defence at all, but it would explain why it is on p8 of the strategic report and also appears in the CEO’s report. I would suggest this is really not allowable as it is based on guesswork of who might have paid what, for whom, if the pandemic hadn’t happened. It is flimsy, and whimsy and impossible to put a figure on. It is also easy to defeat as the PL can say it is applicable to many clubs, but not allowable for any of them, thus being consistently treated across the league.

    It also suggests that the club believes selling our best players on is part of our core strategy, and a key source of income, which is very disappointing.

  5. Great read as always. £67M of player sales, could you take a stab at the breakdown. I thought richy was £50M upfront, Digne close to £25M, James £8M

  6. Paul, I think you deserve a hellofalot of credit for just maintaining your position over the years, despite many critics and unthinking dickheads calling you out and mocking you for your insights into what the reality is at Goodison. Now, they are all scurrying to your side for information, ideas of hope, and suggestions that it isn’t really as bad as it seems and so on. My own views are that this club and it’s many ridiculous supporters, brainwashed to believe that all human life exists within Everton football club deserve all they get – you’ve been masterful with your stance and well done to you. Let them work it out for themselves because their inaction and blind faith in leaders has led them to this point.

  7. Another problem with potential impairment is, if it is attributed to Covid and then players subsequently sold at a profit can both be right? Of course id its included but not attributed to Covid then that writes it off in the normal manner across 2019-20 and 2020-21.

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