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Everton spend big as they aim for Europe

The authoritative Swiss Ramble reviews the 2019/20 accounts of Everton.

The £140m loss is the highest reported to date in the 2019/20 Premier League, though all clubs are likely to report worse numbers last season, e.g. Spurs swung from £87m profit tax to £68m loss, while Manchester United went from £27m profit to £21m loss.

That said, the £140m loss is actually the third worst ever posted in the Premier League, while the previous year’s £112m is the fifth largest. The Everton board would argue that these results reflect the club’s position in the early stages of a long-term investment cycle.

The loss would have been even higher without £40m profit from player sales, £20m higher than prior year. Included Idrissa Gueye to PSG, Ademola Lookman to RB Leipzig, Nikola Vlasic to CSKA Moscow and Henry Onyekuru to Monaco. One of the highest profits from this activity in the Premier League.

The club have increasingly relied on profit from player sales, which has averaged an impressive £50m a season over the last four years, compared to just £13m in the preceding six years. Only Chelsea and Liverpool have made more money from player sales than Everton in the four years to 2019.

Everton have reported losses five times in the last six seasons with the sole exception being £31m profit in 2017. That includes (growing) losses in each of the last three seasons with a total deficit over this period of £265m.

The £186m revenue has grown £64m (53%) from £122m in 2016. Vast majority of the growth has come from commercial £55m, though TV revenue also up £15m, despite 2019/20 deferrals and rebates.

Despite the revenue growth there remains a huge disparity with the “Big Six”, where the lowest revenue (Spurs £392m) is more than twice as much. In fact, all of the leading clubs’ revenue growth in the last four years is higher than Everton, except Arsenal and Manchester United.

Everton's small £2m revenue decrease in 2019/20 is one of the better results of clubs that have so far published accounts with many announcing significant reductions: Manchester United £118m, Barcelona £102m, Juventus £77m, Roma £77m and Spurs £69m.

Everton's strategy is to spend big in the hope of securing regular European football, worth £60-90m in 2020 for Champions League entrants and £17-25m for the Europa League. Everton have earned €14m from Europe in last five years, compared to Manchester City €390m.

The club hope to start work on new 52,000 capacity stadium at Bramley-Moore Dock in 2021, if planning permission granted. Estimated cost is £500m, but could be a game-changer, as seen by Spurs match day income rising to £95m (even in COVID-impacted season) with their new stadium.

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