Everton have not spent well

After Rafael Benitez was sacked by Everton, the Spaniard released a statement, claiming that his task had been made harder by the “financial situation”, so from Zurich the authoritative Swiss Ramble takes a quick look at the club’s challenges (in advance of the publication of the 2020/21 accounts).

The club have reported losses five times in the last six seasons up to 2019/20 with another hefty deficit anticipated in 2020/21, as almost all games were played behind closed doors. In fact, the losses in the last two seasons (£140m and £112m) are both in the top seven ever recorded in England.

Given that the 2020/21 figures are likely to be even worse, Everton have a tough challenge to be compliant with FFP regulations.

At an operating level (i.e. excluding player sales & exceptional items), Everton’s  loss has shot up from £12m to £144m in just 3 years. In fairness, few clubs post operating profits, but Everton’s loss is the second highest in the last 2 seasons, only surpassed by Chelsea £159m.

The wage bill has virtually doubled since 2016 from £84m to £165m. In the same period, revenue has only increased by around 50%, so the wages to turnover ratio has worsened from 61% to 89%.

It is worth noting that the bottom line has been adversely impacted by the high managerial turnover since Farhad Moshiri arrived. Even before Rafa’s departure Everton have paid out £32m in compensation and severance pay in the last five years.

Since Moshiri’s arrival, they have spent big in the transfer market (until last summer). In the four seasons up to 2020, they splashed out a chunky £566m gross spend (£294m net).   This profligate approach has been essentially funded by Moshiri.  Including £100m capital injections and loans in 2020/21, the Swiss Ramble  reckons this now adds up to a hefty £450m. In fact, in the five years up to 2020, Everton’s £350m owner funding was the highest in the Premier League.

There is no doubt that the owners have put a lot of money into the club. The problem is that they have not spent it very well. Whatever people think of Benitez’s managerial abilities, he seems to have a point when he talks about the difficult “financial situation”

One fan commented: ‘I accept that Everton haven’t been well run but this highlights how much money you need to close the gap to the top two or three. Some owners try for a while and then give up the unequal task. Didn’t the same thing happen at a Villa under Lerner?’