Stewardship transition 

The financial reporting period ending June 30, 2025, reports on  the most significant structural change in the history of Everton Football Club. Following a protracted period of fiscal instability, regulatory sanctions, and the cessation of traditional commercial revenue streams, the 2024/25 accounts document the comprehensive rescue operation executed by The Friedkin Group (TFG) through its acquisition vehicle, Roundhouse Capital Holdings Limited. 

This  analysis examines the mechanisms by which the club’s balance sheet was repaired, the transition from distressed shareholder-led financing to institutional debt, and the accounting maneuvers employed to stabilise the entity within the Premier League’s Profitability and Sustainability Rules (PSR) framework.

The reporting period is characterised by two distinct phases of ownership. The first half of the fiscal year was defined by the final months of Farhad Moshiri’s tenure, during which the club remained heavily leveraged and reliant on short-term, high-interest facilities to fund the ongoing construction of the Hill Dickinson Stadium. The second phase, commencing with the change of control on December 18, 2024, saw the immediate recapitalisation of the business, the conversion of nearly £451 million in shareholder debt into equity, and the entry into long-term senior secured notes with JP Morgan Chase Bank.

The statutory results reflect these interventions. While the club recorded a record turnover of £196.7 million, the statutory loss for the year was dramatically reduced to £8.6 million, compared to a loss of £53.2 million in the prior year. 

However, an interrogation of the Profit and Loss account reveals that this improvement was largely driven by a one-off £49.2 million profit on the disposal of investments, specifically the internal sale of Everton Football Club Women Limited and Goodison Park Stadium Limited to the parent company. 

Without this accounting profit, the underlying operational deficit would have remained a significant concern, highlighting the continued challenge of aligning the club’s cost base with its revenue-generating capacity.

Income statement forensics: Operational viability and revenue mix

The growth in turnover to £196.7 million signifies a period of commercial resilience during the transition away from Goodison Park. However, the composition of this revenue is heavily weighted toward centralised broadcasting distributions, which remain highly sensitive to league performance and live broadcast selections.

Broadcasting revenue and merit-based distributions

Total broadcasting revenue remained flat at £129.2 million for the 2024/25 period. Forensically, this stability masks several conflicting underlying trends. The Premier League’s distribution model for 2024/25 included an uplift in merit prize money per place and a significant increase in international television revenue. Everton’s 13th-place finish generated £12.9 million in UK merit payments, which was £2.8 million higher than the payment received for a 15th-place finish in the 2023/24 season. International TV revenue also grew to £60.0 million, representing a £3.4 million increase on the prior year, alongside a merit-based international payment of £8.3 million.

These uplifts were entirely offset by a sharp decline in facility fees for live domestic broadcasts. The club was selected for live UK broadcast on only 16 occasions during 2024/25, a significant drop from the 23 selections in the 2023/24 season. This reduction resulted in a facility fee income of £13.6 million, compared to £20.1 million in the previous year. 

This volatility illustrates the financial risk inherent in a mid-table competitive position, where a decrease in live broadcast appeal can negate the financial benefits of improved league standings. Furthermore, the “Equal Share” of domestic TV revenue distributed to all clubs fell by £1.4 million to £29.8 million, reflecting the ongoing pressure on domestic media rights valuations during this cycle.

Commercial and matchday performance

Revenue from gate receipts rose to £20.3 million, an increase of £1.2 million over the prior year. This was achieved despite a reduction in the number of home cup ties compared to the 2023/24 season, suggesting an increase in average yield per seat and stronger demand for tickets during the final year of operations at Goodison Park. Sponsorship, advertising, and merchandising revenue also saw a healthy increase, totaling £24.3 million (up from £21.6 million). This growth is attributed to sponsorship uplifts upon renewals and the successful acquisition of new partners, including Red Bull, Nemiroff, and Corpay.

The “Other Commercial Activities” line item experienced the most substantial growth, increasing by £5.9 million to £22.9 million. This surge is primarily attributable to the monetisation of the club’s legacy at Goodison Park and the upcoming move to the new stadium. Revenue was driven by the sale of “Everton Way” stones, commemorative “leaving Goodison” seat sales, and a general increase in fan memberships. While these receipts provide a significant boost to the 2024/25 accounts, they represent non-recurring income that cannot be relied upon in future reporting periods once the transition to the new stadium is complete.

Operating expenses and the efficiency ratio

Operating expenses (excluding player and management trading and exceptional items) increased to £210.5 million from £204.6 million. This 2.9% increase reflects the complex operational environment of managing the transition between two stadiums. Forensically, the most critical metric in this section is the reduction in staff costs, which fell by £4.5 million to £152.1 million. This reduction was driven by a decrease in player-related wages, as the club continued to cycle out higher-earning veterans in favor of a younger, more cost-efficient recruitment profile.

The club’s total wage-to-turnover ratio decreased from 84% to 77%. This is a significant improvement toward the 70% target recommended by European governing bodies, although it remains higher than the sustainable thresholds seen at the Premier League’s “Big Six” clubs. It is important to note that Everton’s outsourcing of retail and catering operations (via partners like Aramark) artificially inflates this ratio because the club only recognises the net profit share as revenue, rather than the gross sales. If these operations were handled in-house, the report indicates the wage-to-turnover ratio would have been 74% in 2024/25 and 81% in 2023/24.

Other operating costs rose by £11.5 million to £55.8 million, reflecting inflationary pressures and the dual running costs of Goodison Park and the Hill Dickinson Stadium project. Exceptional costs of £21.0 million further burdened the P&L, including £5.1 million in payments to former employees and £1.7 million in refinancing and legal costs associated with the Friedkin takeover.

Balance sheet recapitalisation

The consolidated balance sheet as of June 30, 2025, reveals a dramatic transformation of the club’s capital structure. The previous year’s accounts showed a business with severe net liability concerns and a reliance on interest-free loans from the majority shareholder. The 2024/25 accounts document the eradication of this structural debt and the subsequent recapitalisation of the entity.

Intangible assets and squad valuation

The net book value (NBV) of player registrations (Intangible Fixed Assets) decreased from £120.2 million to £96.9 million. Under FRS 102, player registrations are capitalised at the cost of acquisition and amortised over the length of the contract. The club incurred an amortisation charge of £50.9 million during the year, a reduction from the £64.6 million charged in 2023/24. This downward trend in amortisation is a forensic indicator of a lower-cost squad architecture, as high-value acquisitions from previous years reach the end of their amortisation schedules or are sold.

Additions to player registrations totaled £52.4 million, including the permanent signings of Iliman Ndiaye, Jake O’Brien, and Carlos Alcaraz. Disposals in the year had a cost of £89.3 million, with an accumulated amortisation of £64.5 million, leading to a net book value of £24.8 million for the players sold. Forensically, the club notes that the insured value of the squad is significantly higher than the balance sheet value, suggesting that the hidden equity in the playing staff remains a source of latent financial strength should player trading be required to meet future liquidity needs.

Tangible fixed assets and the stadium project

Tangible fixed assets reached £815.0 million, an increase from £704.6 million in the prior year. This growth is almost entirely concentrated in the “Asset Under Construction” category, which represents the Hill Dickinson Stadium project at Bramley-Moore Dock. The cumulative cost incurred on the stadium project stood at £813.1 million as of June 30, 2025. During the year, the club capitalised £114.3 million in costs related to the development, a significant reduction from the £312.7 million capitalised in 2023/24 as the project entered its final phases.

A forensic review of Note 11 reveals that borrowing costs capitalised during the year amounted to £32.3 million (2024: £54.6 million). These represent interest payments on loans specifically used to fund the stadium development. The capitalisation of these costs is a critical accounting policy (Note 1f) that allows the club to defer the impact of interest on the P&L until the stadium is operational and begins its useful economic life. Note 13 clarifies a restatement in the company-only balance sheet, where £53.9 million in interest was previously capitalised to an asset owned by a subsidiary rather than the parent company. While this restatement impacted the company’s opening retained earnings, it had no effect on the consolidated group financial position.

The equity repair and shareholder transactions

The “Shareholders’ Funds” increased from £168.5 million to £393.3 million. This massive increase is the result of three principal transactions occurring on December 18, 2024:

1. Debt-to-equity swap: Bluesky Capital Limited, the company controlled by Farhad Moshiri, converted its outstanding shareholder loan of £450,751,000 into 150,250 new ordinary shares. These loans were interest-free and unsecured. By converting them to equity, the club effectively wiped out nearly half a billion pounds of debt, drastically improving its debt-to-equity ratio.
2. New equity issue: Following the takeover, Roundhouse Capital Holdings Limited injected fresh capital by acquiring 1,336,537 new shares. This transaction provided £233.4 million in working capital and funding for the repayment of high-cost third-party loans.
3. Capital reduction and dividend facilitation: Forensically, the most complex maneuver involved a capital reduction. The club used the Share Premium account to offset the accumulated profit and loss deficit. By the end of the last accounting period, the P&L deficit had reached £650.2 million. The directors made the necessary solvency declarations to reduce the share premium account, effectively “cleansing” the balance sheet of years of accumulated losses. This process resets the P&L account to zero, which is a legal prerequisite for the distribution of dividends.

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Cash flow analysis: Source and use of capital

The Consolidated Cash Flow Statement for 2024/25 provides a granular look at how the club navigated the transition from the Moshiri “owner-funding” model to the Friedkin “recapitalisation” model.

Operating cash flows

Net cash generated from operations was £2.5 million, a significant recovery from the £3.1 million net usage in the 2023/24 season. This improvement was driven by a reduction in operational losses and the timing of working capital movements. Operating cash flows before movements in working capital reached £26.0 million, compared to a negative £24.6 million in the prior year. The increase in debtors of £62.2 million (largely the £50 million receivable from the sale of the women’s team) was offset by a £38.5 million increase in creditors, representing deferred sponsorship and broadcasting income.

Investing activities and stadium capex

Cash used in investing activities totaled £37.2 million, a massive reduction from the £227.3 million used in 2024. This reflects the slowing rate of capital expenditure as the stadium construction neared completion.

• Player trading cash flow: The club received £116.0 million from the disposal of player registrations while spending £58.9 million on new additions. This “net player cash inflow” of £57.1 million was a primary source of liquidity for the club during the season.
• Stadium capex: The purchase of tangible fixed assets accounted for £72.8 million in cash outflow, significantly lower than the £210.5 million spent in the prior year.
• Interest paid: Interest paid during the year amounted to £17.4 million (classified within investing activities) and an additional £7.0 million (classified within financing activities), reflecting the high cost of the debt stack prior to the December refinancing.

Financing activities – deleveraging

Cash flows from financing activities provided a net £87.4 million. This figure masks the scale of the debt restructuring. The club took out £480.0 million in new loans while repaying £385.6 million of existing borrowings. This represents the transition from short-term, expensive facilities (like Rights and Media Funding) to the JP Morgan facilities. The conversion of the £451 million shareholder loan into equity was a non-cash transaction and therefore does not appear in the financing cash flow section, though its impact is felt through the eradication of that debt from the closing net debt position.

As a result of these movements, cash at bank and in hand increased from £26.4 million to £79.1 million by year-end.

Analysis of recapitalisation and balance sheet repair

The balance sheet tidy up announced in December 2025 confirmed that the scale of the recapitalisation was designed to address years of mismanagement. The abordagem taken by Roundhouse Capital was aggressive and legally sophisticated, utilising capital reduction to reset the financial baseline of the club.

The toxic debt stack settlement

Forensically, the most debilitante aspect of Everton’s pre-takeover structure was the facility held by Rights and Media Funding (R&MF). This lender held a secured position with highly restrictive “negative pledge” clauses that blocked other institutional lending. By repaying the R&MF facility in full in December 2024, TFG extinguished these covenants, restoring the club’s control over its own assets and enabling it to seek the £350 million private placement funding package for the stadium.

The settlement of the £200 million owed to 777 Partners/A-Cap was handled with extreme caution due to fraud allegations involving the Miami-based firm. TFG negotiated a sophisticated haircut on this debt, providing a discounted cash settlement of approximately £66 million (roughly 33p on the pound). The remaining balance was converted into non-voting preferred equity and warrants in the holding company. This structure allowed TFG to satisfy the debt without paying par value for a distressed loan, effectively forcing the creditors to take a loss while retaining a sliver of upside potential should the club’s value increase.

The internal sale of Everton Women

A critical forensic insight into the 2024/25 accounts is the role of the internal sale of Everton Football Club Women Limited and Goodison Park Stadium Limited to the parent company, Roundhouse Capital Holdings Limited. This deal was reported to be worth between £44 million and £65 million. By selling these subsidiaries to the parent, Everton was able to record the proceeds as pure profit of £49.2 million in the statutory accounts.

This maneuver was specifically intended to help the club comply with the Premier League’s PSR rules and the upcoming Squad Cost Ratio (SCR) rules. While the transaction was legal at the time, exploiting a loophole previously utilised by Chelsea and Aston Villa, it has since been subjected to greater regulatory scrutiny. The profit from this sale was subsequently used to propose a dividend of approximately £20 per share, totaling £44 million, the vast majority of which (99.7%) was returned to TFG. This has led to accusations of value extraction, as the payment effectively reduced the cash available for the January 2025 transfer window.

Analysis of long-term debt sources and interest arbitrage

The 2024/25 period marks a huge shift in Everton’s borrowing profile, moving from predatory short-term facilities to tier-one institutional debt.

JP Morgan revolving credit facility

Concurrent with the change of control, the club entered into a five-year revolving credit facility with JP Morgan Chase Bank to meet working capital needs. As of June 30, 2025, the amount recognised under this facility (and other short-term loans) was £127.6 million. This facility is vital for smoothing out the seasonal cash flow fluctuations inherent in football, such as the timing of season ticket sales vs. monthly wage liabilities.

Stadium private placement finance

On February 20, 2025, the club secured long-term financing for the Hill Dickinson Stadium through a £350 million private-placement funding package arranged by JP Morgan. This debt is recognised within the financials of Everton Stadium Development Limited and is repayable over 30 years, with a final maturity date of June 30, 2055. Forensically, this is a significant improvement over the previous financing model, as it aligns the repayment schedule with the 40-year useful life of the stadium asset.

The primary financial benefit of this restructuring is interest rate arbitrage. The effective interest rates on the JP Morgan notes are reported to be less than half of the 15-20% rates associated with the R&MF and 777 Partners era. This reduction in the cost of capital is visible in the P&L, where although total interest payable rose in 2024/25 due to the overlap of old and new debt, the long-term projection shows a substantial deleveraging of debt quantum and interest expense.

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Analysis of player trading and squad amortisation

The 2024/25 player trading strategy represents a shift toward a moneyball profile, focusing on younger assets with high resale potential.

Disposal profits 

Profit on the disposal of player registrations was £31.3 million, a decrease from the £48.5 million achieved in the 2023/24 season. The primary driver of this profit was the sale of Amadou Onana to Aston Villa for a reported £50 million. Forensically, the Onana deal was highly efficient because his remaining book value was relatively low, allowing the club to book a substantial profit to aid PSR compliance while also generating immediate cash liquidity. Other notable disposals included Neal Maupay, Ben Godfrey (£10 million), and Lewis Dobbin (£10 million).

Acquisitions

The club committed £52.4 million to additions in the playing squad. Key permanent signings included Iliman Ndiaye (£15 million) and Jake O’Brien (£17 million). One of the more interesting transactions was the recruitment of Carlos Alcaraz from Flamengo. Initially arriving on loan in February 2025 with a £15 million buy option, the club exercised this option for the 2025/26 season. Alcaraz signed a two-year contract with a base salary of $1.04 million per year, carrying a cap hit of the same amount for PSR purposes.

The amortisation charge for 2024/25 was £50.9 million, down from £64.6 million in the prior year. This reduction is a key performance indicator of successful wage and amortisation control, as the club moved away from the high-value contracts of the previous ownership. By June 30, 2025, the net book value of the playing squad was £96.9 million, which the directors noted is significantly lower than the insured value, suggesting a healthy buffer of unrealised value in the team.

Post-balance sheet events 

Significant events occurring after June 30, 2025, provide a window into the club’s future commercial and competitive strategy.

Hill Dickinson naming rights deal

In May 2025, the club announced a landmark naming rights partnership with the Liverpool-based law firm Hill Dickinson for the new stadium at Bramley-Moore Dock. The agreement, described as one of the largest in Europe, is reportedly worth £10 million per year over a 10-year term. This partnership is a critical success for the new board, as it replaces the massive inventory void left by the termination of the USM option in 2022. The deal provided the perfect platform for Hill Dickinson to launch its new brand to a global audience while securing £100 million in guaranteed commercial revenue for the club over the next decade.

Summer 2025 transfer activity

Since the balance sheet date, the club has aggressively invested in the first-team squad. Transfer agreements have been entered into for players including Thierno Barry (from Villarreal), Mark Travers (from Bournemouth), Adam Aznou (from Bayern Munich), and Kiernan Dewsbury-Hall (from Chelsea). Additionally, Jack Grealish joined on loan from Manchester City. The net cash outflow for these transactions, combined with the triggering of contingent milestones from previous agreements, is estimated at £114.3 million. This investment signals a definitive end to the sell-to-buy austerity of the late Moshiri era.

Regulatory resolution: PSR case dismissal

On January 17, 2025, the Premier League announced the discontinuation of the outstanding PSR charge against Everton relating to stadium interest capitalisation. The league had argued that Everton was only entitled to capitalise £2.06 million of its £19.02 million in interest payments for the 2022/23 season. However, after reviewing further information provided by the new board, which likely included more detailed documentation of the loan draws, the Premier League concluded that it would not be appropriate or proportionate to continue the complaint. This brought to an end all outstanding proceedings regarding the club’s PSR breaches for the 2022 and 2023 financial years, effectively wiping the slate clean for the Friedkin era.

Regulatory outlook: Transitioning to the squad cost ratio

As the club prepares for its first full season in the Hill Dickinson Stadium, its financial strategy is increasingly dictated by the transition from PSR to the new Squad Cost Ratio (SCR).

The mechanics of SCR

The SCR limits on-pitch spending (wages, amortisation, and agent fees) to a percentage of club revenue and net profit from player sales. Under the transitional glide path, the cap was set at 80% for the 2024/25 season, dropping to 70% for clubs in European competition from 2025/26 onwards. For clubs not in Europe, the threshold is higher at 85%.

The move to the new stadium is the central component of Everton’s strategy to comply with these rules. The increased capacity (52,888) and the massive expansion in premium hospitality and food and beverage (F&B) offerings are expected to double matchday revenue. Forensically, this increases the denominator (Revenue) in the SCR calculation, giving the club significantly more headroom to spend on player wages without breaching the limits.

The risk of the outsourced model

One remaining risk identified in the forensic analysis is the continuation of the outsourced retail and catering model. Under SCR, the club only records its commission as revenue. If the F&B operation at the Hill Dickinson Stadium were in-house, the gross sales would count toward the revenue total, thereby raising the spending ceiling for the squad. While the outsourced model keeps certain staff wages off the books, the trade-off is a lower potential SCR spending cap, which could put Everton at a disadvantage compared to “Big Six” peers who manage these functions internally.

Conclusions

My analysis of the 2024/25 Report and Accounts for Everton Football Club confirms that the entity has emerged from a state of critical financial distress into a period of institutional stability. The recapitalisation exercise led by Roundhouse Capital Holdings eradicated nearly £1 billion in total liabilities through debt-to-equity swaps and the repayment of high-cost predatory lenders. The balance sheet has been repaired, showing a net asset position of £393.3 million, and the interest burden has been significantly reduced through the JP Morgan refinancing.

However, challenges remain. The underlying operational deficit, when excluding the internal sale of the women’s team, indicates that the club is not yet self-sustaining from core football activities. The £44 million dividend payout shortly after the takeover has reduced immediate cash liquidity, and the reliance on non-recurring revenue from “Goodison Legacy” sales in 2025 will need to be replaced by the sustained growth of Hill Dickinson Stadium revenues.

The successful resolution of the PSR dispute with the Premier League and the securing of the Hill Dickinson naming rights deal provide the club with a clean regulatory and commercial platform. As Everton moves into the 2025/26 season, the success of the new ownership will be measured by their ability to convert this boardroom stability into a competitive squad capable of challenging for European qualification, thereby fully unlocking the financial potential of the Hill Dickinson Stadium project.