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Thursday, September 3, 2009

Everton need to heed UEFA financial plans

The recent Monaco meeting of a select UEFA panel, whose members include representatives from the Professional Football Strategy Council, the European Club Association and the European Professional Football Leagues, could inadvertently condemn Everton to decades of continued mediocrity if the proposed “Financial Fair Play” strategy of UEFA president Michel Platini is adopted.

Proposals under consideration include a salary cap and the limiting of spending on transfers and wages linked to a percentage of a clubs income; measures that are designed to prevent excessive bank borrowing and funding from billionaire benefactors as seen at Chelsea and more recently Manchester City.

A policy restricting spending linked to income will place a heavy reliance on a clubs ability to generate income through its stadium facility. Arsenal, Manchester United, Manchester City, Liverpool, Chelsea and Tottenham have all taken a city based super stadium approach whilst the Everton board have chosen the out of town budget stadium option that requires a 94% occupancy rate to deliver just £6m of additional profit per season.

All of the aforementioned clubs currently have turnovers greater than Everton, some will break the £300m barrier, leaving the Goodison board struggling to compete with a mere £80m at the moment and an austere outlook for our future prospects of revenue generation in Kirkby.

Whilst Michel Platini's action is laudable, the tangible lack of vision by the Everton board appears to see Everton consigned to becoming a club whose aspirations amount to being little more than a lower tier premiership club, or worse.

Platini's plan is to prevent clubs imploding through debt driven by the greed of the pursuit of success, Leeds and Valencia being the prime examples of this trait.

Yet Everton are not as immune to this problem of crippling debt as some people would like to think; it's not simply the amount of debt that is important, it's the relationship between the debt and the value of the club as a whole. A thorough explanation of this can be found elsewhere on this site but a simple analogy would be if a billionaire owed £5m it wouldn't be a problem; if a pauper owed £50 it would be a major catastrophe; Everton, due to a continued lack of investment, are paupers and have slowly slipped into becoming a heavily debt ridden club without the safety net of an interested benefactor.

A combination of Michel Platini's plan and the short-sightedness of the board's Destination Kirkby plan could be the straw that finally breaks the back of every fair minded matchgoing Evertonian and consigns Everton to the football wilderness.

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