Everton back in the red after big jump in player costs

By David Owen

January 9 – Surging player costs and one-off items pushed Everton, the club from the blue end of Merseyside, back into the red in 2017-18, in spite of a 34% jump in commercial revenue.

A report on the club’s website discloses an after-tax loss of £13.1 million, a marked deterioration compared to a profit of £30.6 million for the year ended 31 May 2017. This was on turnover up 10% to £189 million.

A string of new signings, including Jordan Pickford, the England goalkeeper and Icelandic playmaker Gylfi Sigurdsson, helped to lift staff costs to £145.5 million, with player amortisation jumping from £37.3 million to £66.9 million and the wage:turnover ratio to well over 70%. As recently as 2015-16, aggregate payroll costs were just £84 million, equating to a rise of 73% in two seasons.

The club said it incurred £34 million in exceptional costs, £14.4 million of which related to “settlement costs for the termination of former employees and other costs in relation to the change in coaching staff in the year”. It began the 2017-18 season under Ronald Koeman, installing Sam Allardyce in November 2017 before appointing the present incumbent, Marco Silva, last May.

The Toffees have begun laying plans for a move from their historic Goodison Park home and said the club had incurred a cost of £11.4 million for “the design and other work relating to the new stadium”. It said these costs could not be capitalised until planning permission had been granted.

Iranian businessman Farhad Moshiri bought a 49.9% stake in the club three years ago. Everton said that Bluesky Capital Limited “continued to support the club post year-end with an additional shareholder loan of £100 million received”. The shareholder loan, which reached £150 million in 2018, was accounted for as equity.

Full details will have to await the arrival of the new accounts at Companies House, but it seems likely the club was spared further red ink by substantial gains on a number of player disposals, including those of Romelu Lukaku to Manchester United and Ross Barkley to Chelsea.

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