Wednesday 25 May 2022

Safe - for now

 


Everton avoided relegation after their remarkable win over Crystal Palace, coming from 2-0 down to win 3-2 just as they did on the last day of the season in 1994 against Wimbledon (although this time without being awarded a dodgy penalty).

When I spotted an LFC crest on one of my golf club's juniors yesterday I said to the young lad, who is about 10 years old, "I didn't know you were a Liverpool fan". "Who do you support?" he asked. When I whispered "Everton" in his ear a slightly disainful smile spread across his face and he responded "you lot were celebrating just because you didn't get chucked out".

Out of the mouths of babes and sucklings and all that but he wasn't the only one to point it out. I've been at Goodison on the day we have won the league title and on another occasion in a different season when we clinched it away from home but were presented with the trophy. I've been present when they have won and lost F.A. Cup finals. I've experienced us winning a European trophy. There is a great feeling of satisfaction at winning a trophy and a feeling of emptiness when a final is lost. I haven't experienced relegation as it last happened to Everton in 1951, before I was born. But relegation from the top flight must be far worse than losing a cup final. (OK, some Burnley fans I know have taken it phlegmatically, but they are a yo yo team). So yes were were celebrating, with huge relief, about not getting chucked out.

There was also a feeling of optimism and many comments on the lines of "we mustn't let this happen again". Just like in 1994. Everton did trend upwards then, winning the F.A. Cup two years later. Though only after being bottom of the table the following October and changing the manager. And then experiencing another last day survival in 1998 before the relative stability of the Walter Smith years and the comparative success of the David Moyes era (when we were just about as successful as you can be without actually winning a trophy. A bit like Tottenham now).

So what awaits Everton now? Well I say "safe - for now" for two reasons. The first is the threat of legal action by Burnley over whether Everton's immense losses have breached the Premier League's financial fair play rules. Everton's latest accounts published in March showed a loss of £120 million bringing the total over three years to £381 million against an FFP limit of £105 million for "adjusted losses". There are two significant get outs, sorry adjstments: covid related losses and investment in facilities and academies are to be excluded from this number.  Everton only had £200k of gate receipts in the financial year, though broadcasting revenue was up. The Guardian reported that "independent calculations" showed that the pandemic had affected Everton to the tune of £103 million in the most recent 12 month reporting period and £170 million since the start of the outbreak, potentially increasing to £220 million. 

These figures raised some eyebrows at other clubs: Arsenal reported covid related losses of £85 million but have a bigger stadium. It's worth remembering that Everton got a lot of praise during the lockdowns for continuing to pay all their casual employees (stewards, etc) as if the matches were proceeding normally, while Arsenal got a lot of criticism for cutting back non-playing staff and sacking the chap who dressed up as the mascot. Mind I don't imagine the mascot got paid all that much! Everton also have the biggest community programme of any British club and decided that the pandemic was not the time to cut it back.

But even if £220 million is allowable against covid that still leaves an adjusted loss of £160 million. There has been spend of tens of millions on the new stadium - work on the ground only started this year but there will have been large costs for design, planning and possibly advance ordering of materials in order to fix prices. But in the most recent two years of the three in question Everton's recently published accounts show spend of only £20 million. I've gone back to the 2019 accounts and, over the relevant three years, the total spend on the stadium project is about £27 million, with a further £11 million spent in the previous financial year, ending in July 2018. There will be other costs which can be offset, for example on the existing ground and the academy, but even so it seems a feat of smoke and mirrors to come up to the numbers Everton are claiming.

Nevertheless, Everton are confident they are clean: they say they have worked with the league over two years to ensure rules have been followed, including consulting with the league’s lawyers over their January transfer business. I would note that the transfer business in the current season, certainly in the January window, while arguably relevant to the club avoiding relegation, falls after the three year period in question, the most recent set of published accounts running to July 2021, though Burnley would make the case that Everton should have been subject to a transfer ban and unable to do any business this season. I also note that the Premier League, not surprisingly, have stayed silent on the matter.

What chance do Burnley have of overturning their relegation by getting a points deduction enforced on Everton before the new season starts? Remote I would say. I expect covid will be a get out of jail card for Everton (clearly not get out of jail "free" though). A precedent was set by Sheffield United's action against West Ham over the Carlos Tevez third party rights affair in 2007. It took two years to resolve before West Ham paid an out of court settlement to the Blades after Lord Griffiths, overseeing the independent tribunal that had been established, made negative comments about West Ham's conduct. The wheels of justice will grind too slowly to save Burnley I'm sure. Similarly the cases Middlesbrough and Wycombe have taken which have delayed Derby's change of ownership have gone on and on. In these cases the the Leagues (Premier or EFL) have stayed pretty much out of it, very unhelpfully as far as Derby are concerned. Martin Samuel has written about how the Sheffield United, Middlesbrough and Wycombe cases are all tenuous and without sporting merit if you look at the likely impact on the results of matches. I expect that would also be true of Everton. Yes they have spent profligately for it but got so little in return! 

It is notable that Burnley are not suing Everton but the Premier League for not enforcing its own rules. The case, such as it is, is driven by Burnley's own precarious financal arrangements after its own change of ownership and I feel it is more about money than points.

But there is a second reason why I say safe for now: clubs that flirt with relegation in one season often do so over several seasons. They were there for a reason. Lampard tried to get Everton playing more football but pretty quickly turned to direct play to drag Everton out of the mire. There was an improvement. Their 38 game season can be broken into three periods. In the first 7 matches they gained a creditable 14 points, after which they had a truly awful run of 23 games for only 11 points. This run covered the termination of the hapless Rafa Benitez and the frst 5 games of Lampard's reign. In their last 8 matches they got a creditable return of 14 points, with critical wins over Manchester United, Chelsea, a precious away win at Leicester and the decisive victory over Palace. Which of these runs of form is the "true" current Everton?

They were lacking Dominic Calvert-Lewin for a large part of the season. But even so I am struggling to see more than half a dozen teams that Everton are likely to finish ahead of next year: the promoted three; Brentford (who I expect to struggle in their second premier season); Southampton, who have some good players but go on some very poor runs; and Leeds, about whom all the same comments apply as Everton. On the bright side Everton's issues might mainly be discerned by noting that they performed relatively well against the top sides, getting four points off both United and Chelsea and only losing narrowly to Manchester City at home. Indeed if referee Paul Tierney had given the obvious penalty for handball against Rodri it could have been better. Everton fell to a lot of soft defeats in games they could have at least drawn. An improvement in morale and determination could work wonders.

But not if they sell their best players, as one news report advocated, claiming Lampard could rebuild his squad by selling DCL, Jordan Pickford and Richarlison. It would not be a shock if Richarlison wanted to move on but unless he can land a very good move there would seem little point. His goals and attitude were critical in Everton's survival.  Personally I wouldn't take a risk on buying DCL until he proves his fitness. Pickford's performances were critical in the run in. Sell those three and, with Everton's recent track record of signing players, they are dead

But for now I can remember the amazing scenes at Goodison last week. The dye from a smoke canister let off behind me is still visible in my hair (it takes several washes apparently). And of course DCL leaping like a salmon (or an Andy Gray) to score the winning goal (picture from Sky Sports below)


Everton lose more than £100 million for third successive year but avoid sanctions. The Guardian, 29 March 2022 

Crisis deepens for Everton as they face biggest finacial loss in football. The Times 14 March 2022

Everton insist they have followed financial fair play rules but Burnley and Leeds threaten legal action. inews 23 May 2022

Sheffield United and West Ham agree £20 million compensation over Carlos Tevez affair. The Guardian, 16 March 2009.

Everton's published accounts are available on the club website. Good luck in trying to reconcile them to some of the figures quoted in the newspapers!

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