Everton fans shouldn't build their hopes up

Dec 13 2006 By Bill Gleeson, Liverpool Daily Post

EVERTON Football Club's latest accounts, published this week, make disturbing reading for fans hoping for investment in a new ground.

The balance sheet shows a sharp turn for the worse.

At the end of the 2004/05 season, the club had net assets of £434,000. The latest figure, for the end of May, 2006, shows net liabilities of £10.3m. Cash in the bank was just £3.4m, down from more than £8m in the previous year, and suggesting that they are hurtling back towards overdraft territory.

The deterioration in the health of the club's finances results from lower television revenues, a rising wage bill, expenditure on player transfers and not being able to call upon the proceeds from the sale of a star player like Wayne Rooney during the last financial year.

In addition, the club has £26m of debts due for payment this season and a further £28.5m of long-term debts, giving total indebtedness of almost £55m. Against this, Everton can offset trade debtors of £6.5m and investments of £2.7m.

So where does an already financiallystretched club find the additional resources needed to build a new ground? While Everton may get land at Kirkby for free from Knowsley Borough Council and some cross-subsidy of stadium construction costs from the associated retail and residential development at the same site, the club will still need to raise tens of millions of pounds in finance to make things happen.

With an already extended balance sheet, the Goodison Park team won't be able to raise much more debt. One of the club's principal shareholders, Bill Kenwright, doesn't have the personal resources needed to fund much more than a row of latrines and a hot dog stand out of his own pocket, and the other major shareholder, Robert Earl, would have to expend his entire personal wealth, which he isn't going to do.

Glimmers of hope lie in the fact that extra cash is going to come Everton's way from the latest BSkyB television rights deal, and the club may be able to squeeze more profit from its merchandising activities now that they have been out-sourced to JJB Sports.