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Monday, September 14, 2009

Disappointment Over TV Debate


Evertonians have been contacting KEIOC to express their disappointment over the recent televised debate on Everton’s finances. It had been expected that with Everton’s CEO Robert Elstone, a trained accountant, and Professor Tom Cannon, an expert on football finance, taking part, an opportunity would be available for Evertonians everywhere to not only gain a firm understanding of the financial situation at the club but also take the increasingly rare opportunity to raise legitimate concerns over the validity of a strategy of becoming facility led, in relation to the proposed relocation to Kirkby.

Sadly the debate turned out to be somewhat of a lightweight affair offering little insight into what was promised. Perhaps Evertonians depth of knowledge on the subject and passion for their club, which is often disguised due to the conservative traditions that epitomize supporters of the club, was underestimated; perhaps it was simply a lack of in depth understanding of the subject on the part of the organisers.

A concern raised by KEIOC chair, Dave Kelly, over the prospect of returning to the pre 1892 situation was addressed but the financial questions posed by two of our number were given a wide berth. Those who missed the debate can catch it here.

Maybe Tom or Robert could respond individually? We’d be more than happy to post their opinions on our website.

The Email

From: keioc [keioc@keioc.net]
Sent: 09 September 2009 07:52
To: John thompson; John. Thompson; Bill. Gleeson
Cc: trinitymirrormerseyside@googlemail.com
Subject: Questions for Robert and Tom

Good Morning

As supporters of the Keep Everton In Our City campaign we welcome any debate that endeavours to clarify the financial position of Everton Football Club.

Where we are and how we arrived at this position is of interest but of greatest importance is the direction Everton intend to take in the future.

We'd encourage you to take a look at the KEIOC website, www.keioc.net, for some background to the questions we're about to ask, particularly the three recent articles on the UEFA proposals on financial control, the Arsene Wenger warning concerning new stadia and specifically the article entitled “The Deal of the Century” which contains comprehensive explanations and illustrates graphically where Everton are financially in relation to their peers in the premier league.

In 2004 Tom famously called an EGM over the precarious financial situation Everton found itself in. Today, following a continued absence of any tangible investment and an enforced policy of asset disposal, we're once again seeing debt levels similar to those that caused so much consternation five years ago.

Debt is a complex concept; Robert may prefer to talk about net debt or that the monetary amount of debt, at Everton, remains substantially less in comparison with many other premiership clubs. We prefer a more accurate assessment; we prefer to look at the TOTAL DEBT and specifically the TOTAL DEBT RATIO. A simple analogy is that if a billionaire owes five million pounds it isn't much of a problem, if a pauper owes fifty pounds it's a major catastrophe; Everton are paupers, our total debt at 2008 was over £84m, Robert, as CEO, is in a position to explain what it is now. Our total debt ratio is approaching worrying levels.

Our questions embrace the current and future financial position of Everton Football Club:

“The CEO has stated on many occasions that Everton, in the absence of a billionaire benefactor, are pursuing the strategy of becoming facility led. UEFA are increasingly likely to implement a “financial fair play” policy, linking expenditure to income. If adopted, this will place an even greater onus on a clubs ability to generate as much income as possible from their stadium facility. Using Everton's own financial projection that the Kirkby stadium, at a somewhat unrealistic 94% occupancy level, will only generate an additional £6m of profit per season; that the turnover gap between Everton and their peers clearly can't be addressed through Kirkby and that all their competitors – Arsenal, Chelsea, Liverpool, Manchester United, Tottenham and now Manchester City have, or have planned, city based super stadia whilst Everton see the future as a modest £80m affair in an out of town, supporter unfriendly, location. Taking all these factors into consideration, how can Everton's future financial security be seen as safeguarded when the chosen strategy clearly fails to deliver incomes anywhere near that of our peers even at present? Surely this is a missed opportunity; doesn't it appear that we're planning to fail?”

A supplementary, and probably an uncomfortable question for Robert, would be:

“Evertonians were told that one of the main factors influencing the decision to relocate to Kirkby was the £50m contribution towards the cost of construction. As it has now been proven beyond all doubt that there is no £50m, as stated by Tesco at the public inquiry, it's simply an increase in the VALUE and derived from an uplift in the value of the land; taking into consideration the statements and answers to the main question what is the tangible benefit of this arrangement to the club and its supporters?”

Finally, under cross examination, Robert told the inquiry that no money was actually in place to finance the cost of the Kirkby stadium. Due to the lack of transparency, and Everton's failure to substantiate their financial evidence, a condition was attached to the application whereby Everton now has to demonstrate that they have the finance in place before work on the stadium begins, what progress, if any, has been made on this, which elements of their financial plan are in place?

Kind regards

Colin Fitzpatrick & Mark Grayson
KEIOC

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