Friday 3 November 2023

Up or down for for the Grand Old Team from here?

Everton fans have had enough to worry about for several years now but things could be about to get much worse. The Premier League charged Everton under its Financial Foul Play regulations* in March but until May the more imminent threat was relegation on the field. A relief filled victory in the must-win last home game of the season, 1-0 against Bournemouth at the end of May, saved them for the time being. 

I was at that game. Henry Winter, the Times Chief Football writer, doesn't normally cover Everton but  was clearly sent to Goodison for the purpose of a story (either way). He wrote a lovely, rather respectful and well crafted match report** which started by quoting the Everton fans' Grand Old Team song:

"If you know your history, you know Everton will fight and how hard they fought here at Goodison Park.... to preserve their club’s run in the elite division that dates back to 1954".

It was an interesting atmosphere that day in and around Goodison. The streets were packed and in full party mode before the match:

The folk on the bus shelter were leading the singing and only two of the four lanes on County Road (aka the A59) were available to traffic. There was a serious risk of getting spattered with blue paint from flares in the streets. The photo below was taken while I enjoyed my pre-match bevvy. 
 


I'm sure there were far more people than could fit in the modern day, restricted capacity, Goodison. I expect a lot had turned up just for the party. The mood seemed remarkably confident. A confidence I didn't entirely share but they were right, as a rather makeshift team with midfielders Garner and O'Neill filling in as wing backs gave a competent performance to the extent that, even though it was only 1-0, the announcement of 10 minutes added time didn't cause many nerves. Indeed, that ten minutes of football must have been among the most composed the team played all season.

The thinness of Everton's squad was stark when I got back to my seat towards the end of half time and saw four Everton subs doing a desultory warm up. "Are they all of our subs?" I asked the lady sitting next to me. "There's a couple of keepers as well" she said. Injuries had depleted the squad a bit but not even being able to fill the bench with youngsters was revealing.

Despite securing survival, just as a season earlier I was rather gloomy about the club's forward prospects. I'd said then that I couldn't see why things would change. Clubs that have struggled usually struggle again the following year, which came to pass. Though by May 2023 my concern was excaerbated by the pending FFP charge. 

The season started with Everton's squad still looking thin and main striker Dominic Calvert-Lewin still crocked.  I went to the first match of the season, at home against Fulham. The performance was good but not the result. The 1-0 defeat was a much better showing than the equivalent fixture played only last April, a game I also went to, where Everton were comprehensively undone by a Willian masterclass. A friend who came with me to this season's game said Everton should have been 3 up before Fulham scored. Without DCL or, at that time, another credible striker, Neil Maupay tried his heart out, nearly scored in the first few minutes, but lost heart when their keeper made a great save at point blank range and the crowd lost what little faith and patience they had left for him. 

However, Everton did at least play enterprising football in that game and that pattern continued with the team making but not taking chances. Roll forward a few weeks and the squad had been strengthened by the addition of Jack Harrison, who Leeds fans warn can be inconsistent and a promising deputy for DCL - Portuguese striker Beto, who I call Nobby, as his full name is Norberto Bercique Gomes Betuncal. In his time on the pitch so far Nobby has looked big, strong and fast but very raw for £25m. He has scored, albeit in his debut in the Haribo Cup against Doncaster, who at the time were propping up League Two. When he battled for the ball in the corner then crossed from the by line for 83 year old Ashley Young*** to score the last goal in the 3-0 Haribo cup win over Burnley the crowd were delighted for him and chorussed "Ole, ole, ole, ole; Beto, Beto" which he acknowledged with a gesture of appreciation. He at least gives us an option if DCL is out or just needs a breather.

Even better DCL, after an unfortunate broken cheekbone set him back, is looking fit (touch wood), strong and is scoring goals. Despite a hamstring tweak and the cheek injury he has appeared in 7 of Everton's 10 premier league matches this season, scoring in 3 of the last 5.

But just as impressive to me is the fact that he seems to have worked on his game while he has been doing his injury rehab. In particular he's improved his ability to pull the ball down on the run and turn from Pickford's long passes, a move which will trouble most centre backs who he can beat for speed. He's done this a few times this season and the one against Bournemouth close to where I was sitting was breathtaking. Had his shot gone in it the clips would have been replayed time after time. But his simpler adjustment of the ball and turning onto it for his goal at West Ham, was impressive too. The great thing when your striker has these skills is you don't have to play him in, you just have to give him the ball near the box, whatever way he's facing. He is looking the complete centre forward again, just as he was when he became Harry Kane's deputy for England three seasons ago. (All of his 11 England appearances and 4 goals came between October 2020 and July 2021). And he's still only 26.

The only thing that remains a puzzle about Calvert-Lewin (besides his dodgy fashion sense) is the fact the Everton fans don't have a song for him even though he's been there since 2016 and now has 50 Premier league goals for the club. I have heard a song purporting to be about him on youtube but I've not heard it sung at the ground. I guess it's because his name is awkward to fit to song. It was much the same for Richarlison, though the fans did eventually have a song for him.

Talking of whom, I had begun to convince myself in the summer that even without Richarlison, if Everton got Calvert-Lewin fit and the squad performed to its potential they should easily be better than at least three other premier league clubs. I was concerned when the early season results weren't matching the performances but since then there's been an improvement, with a good 3-0 win at home against Bournemouth and wins away at Brentford, West Ham and Villa.  I went to the Bournemouth game in early October and the only worrying sign was that Everton should really have scored six, so they still aren't taking enough of their chances. But Bournemouth were poor that day and the home defeat against Luton showed Everton still have a prima donna tendency to be complacent against what they consider to be inferior opposition, a state of mind that can quickly flip to panic when they realise that isn't the case on the day. 

Nevertheless, at the moment I would say the squad is good enough to get comfortably to mid-table, if they can continue picking up points over the next few weeks of relatively difficult fixtures.  The team's run of good results (5 wins in 7) has coincided with young James Garner at last being trusted in centre midfield by Sean Dyche. Garner is looking an outstanding footballer with the precious gifts of being able to win and keep possession. Arguably he is only being outshone at the moment by his England Under 21 colleague, centre back Jarrad Branthwaite who is proving a much more reliable partner for Big Ears (James Tarkowksi) than Noddy (Michael Keane). Everton have been so much better with these two players in the team.

But that confident outlook is before the threat of a points deduction. Unconfirmed reports**** have  speculated that the club could face a 12 point deduction if found guilty of breaching the Premier League's financial fair play rules. At five points clear after 10 games one could extrapolate to 38 matches and say Everton could be 19 points clear by the end of the season, so why worry? But that scenario doesn't really stand up. Everton's early season fixtures were comparatively easy and the teams at the bottom may be poor but they could easily start accruing points at more than their current meagre rate. A 12 point deduction would surely test Everton to the limit. A recent "supercomputer prediction" for the end of season table had Everton and Fulham on 40 points ahead of Burnley on 30 and Sheffield United and Luton nowhere. A 10 point gap, not 12.

If it comes to that. Everton have maintained their innocence throughout but we don't know much about the single charge they face: the Premier League hasn't published any details. We know there is one charge of breaching the limit of £105 million for losses over a three year period which, prima facie, they did, losing £372 million in the three seasons up to 2021-2 before allowing for the impact of covid and spend which appears in the accounts but falls outside fair play calculations, such as on infrastructure and the academy.  We also know Everton claimed much larger covid impacts than other clubs, even ones with much larger stadia: more than £90m, though even that doesn't look enough to keep them compliant. Nevertheless, it stretched credulity and I had assumed the inquiry would be focussing on that. But reports have suggested it is actually related to the tax treatment of loans for the new stadium. As all infrastructure spend, including the new stadium project, is outside the fair play envelope, that struck me as odd. But wait a moment - what if Everton had claimed a tax credit on the stadium loans and tried to benefit from that within the fair play numbers? But how can you claim a tax credit when you've lost a packet and aren't paying any tax? A cursory examination of the club's annual accounts shows that it paid no corporation tax in 2020, 2021 or 2022 and there was a £30k tax credit in 2019. So WTAF?

I've known many experts in finance glaze over at the mention of tax, it's a specialist subject. And who really understands their tax return these days? On the other hand you can get sent to jail for getting your tax wrong. Everton may have to hope that they are treated like Ken Dodd rather than Al Capone*****.

I think it will be difficult for Everton to show they have complied, even though they say they went through the numbers with the Premier League in real time and the Premier League assured Burnley and Leeds less than 18 months ago that Everton were clean. But why would a 12 point deduction be applied for something that could be considered a technicality? The Premier League has never applied a deduction of more than 9 points, which was for Portsmouth going into administration, but the standard penalty in the EFL since 2019 for going into administration has been 12 points. However administration wipes a huge financial sheet clean and so you'd think that would be reserved for the most severe penalty.

From here one could imagine a future in which Everton's current progress on the pitch leads to a comfortable mid table position through this season and going into next. At some point in 2024 or early 2025 the new stadium should be complete and a glowing future could beckon. The club could become an attractive acquisition for one of the sovereign wealth funds yet to buy into the Premier League, which seems to be the only way to join in the party at the top.

On the other hand one could imagine a 12 point deduction leading to relegation and a financial meltdown - I believe some of the large stadium related loans are repayable immediately if the club is relegated. A firesale of players wouldn't be enough to prevent administration. Funds would not be available to complete the stadium, which would sit there on the banks of the Mersey like a gigantic white elephant. A bit like Valencia's part built stadium - started in 2007 on hold since 2009, might be finished in 2025. A phoenix Everton 2024 Limited might easily spin down the leagues to League One, like Derby County, or worse.

My brother thinks the latter secnario is unduly pessimistic. The stadium should be 90% complete by the end of the season and he argues that it will make business sense for someone to complete it. Liverpool City council will want it finished as it kick starts regenration of the only part of Liverpool still pretty much untouched since the end of WWII. Once finished it should be an attractive venue for large events in the north west and has already been selected to host games in the 2028 Euros. On this line of thinking the private equity business 777 partners who want to acquire Everton must have worked through such scenarios and decided the siuation could be managed. My brother's question is not will the stadium be finished but rather who will own it? That doesn't make me feel much better - situations where the club's owner rather than the club owns the stadium have often been unhappy (e.g. Coventry City, Derby County). But at least there would still be a club.

I'll end with the view from my front row seat in Upper Gwladys Street for the Burnley game. For once no obstructed view and even a helpful ledge to use as a shelf for my half time cuppa, making it possible to open my Mars bar wrapper without scalding myself for a change. Nil satis nisi optimum indeed.






* a deliberate mis-wording. I know it's really Financial Fair Play but it's not actually about fairness, is it? The regulations are designed to keep the current elite where they are and all the other clubs in their place
** Henry Winter's match report, Abdelaye Doucoure stunner keeps hosts up, appeared in the Times on 29 May 2023 (online 28 May 2023)
*** Young is, of course 38. He looked every day of it slowly getting up in the first half against Burnley after getting clattered but to be fair to him he made a lot of yards to bundle in his goal in stoppage time, getting between several defenders to arrive at the front post with immaculate timing. His was a rather dispiriting signing when it was made but he's a good professional
**** Premier League calls for Everton to be hit with 12-point deduction - report. The Guardian 25 Oct 2023
***** Ken Dodd was found not guilty of tax fraud by a jury at Liverpool Crown Court in 1989. Part of his defence was that he didn't realise he owed the Inland Revenue money as he lived on the coast. His defence counsel was the famous QC George Carman and the prosecuting counsel was Brian Leveson, later known in connection  with phone hacking and press regulation.  See Did Ken Dodd get away with the crime of the century? Mail Online 9 Nov 2019

Other relevant reading:
Everton FFP hearing: Premier League flopped in front of independent commission claims Simon Jordan. Sky Sports 27 Oct 2023

Everton's financial situation is uncertain - what does this mean for the new stadium? theathletic.com, 3 Nov 2023

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