On the eve of Everton’s League Cup third round meeting with West Bromwich Albion, the spectre of the club’s financial abyss has returned after it was revealed Everton has mortgaged future broadcast income in a deal with Vibrac Corporation, a business registered in the British Virgin Islands, in return for a £14m, one-year loan.
Matt Scott, editor of the Digger
Combined with a report from football finances blog The Swiss Ramble, the last few days have been another instalment in the long-running saga of Everton’s precarious business model. Writing before the revelation of the club’s involvement with the Vibrac Corporation, The Swiss Ramble said: “…to do the job [of taking over Everton] properly would require investors with very deep pockets…they would have to buy out the directors’ shares which…would cost £75m…they would also have to repay the loans [of] £45m, fund a new stadium [£250m], buy new players [£50m] and inject working capital to cover losses [£50m].” There are few people in the world with that sort of money, estimated by The Swiss Ramble at around £500m, and even fewer willing to spend it on a football club, generally a money-losing proposition.
Removing the new stadium from the equation would, using The Swiss Rambles’ estimates, half the cost of buying and transforming the club, but would not address a pressing issue also raised by the blog: “Although Everton’s debt is by no means excessive compared to other football clubs, the problem is that they appear to have no realistic way of paying it off.” Goodison Park is part of that problem: the old ground generates less than half the income per match of the similarly-sized and located Anfield, around £700,000 to Liverpool’s £1.6m. In the absence of a billionaire businessman willing to throw money at the club, any long-term strategy to solving Everton’s calamitous financial situation will have to include a viable new stadium, which itself is a massive expense the club cannot presently afford.
In light of the latest doom-laden news about Everton’s finances, the League Cup fixture with West Brom almost pales in comparison. However, a run to Wembley – should Everton make the final – would bolster the club’s coffers as it did with the FA Cup final appearance in 2009 and, as such, the game cannot be separated from events in the boardroom. Perhaps the only cheer at the moment for Evertonians is, after the victory over Wigan Athletic on Saturday, matters on the pitch are far rosier than off it.
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