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Football’s finances in the Covid era: a worrying case study

No club’s finances have had a particularly healthy year, but some are certainly sicker than others. In the lower reaches of the pyramid, clubs are reliant on bums on seats: matchday revenues remain the lifeblood of much of the Football League and beyond.

In the sunlit Barclays-sponsored uplands, however, the trend has been markedly different. This is not to say matchday revenues are insignificant to the top six; Manchester United’s turnstiles generated enough in 2019 to pay for Bruno Fernandes’ and Aaron Wan-Bissaka’s transfers, with plenty of change left over.

However, United are arguably the biggest club in the country, if not the world. It follows that their global appeal translates into being able to easily fill the league’s largest stadium, with many of those attendees being directed via the club shop on their way out.

Nevertheless, this matchday income accounts for less than 20 per cent of the club’s overall revenue for 2019, illustrating the vastness of United’s revenue streams from broadcasting deals and other commercial activities.

The picture elsewhere is rather different. A short way down the M62 lies Goodison Park, home of Everton Football Club, with a capacity of 39,414 putting it straight in the middle of the Premier League pack.

Here gate receipts in 2019 totalled just over £14 million which, considering the club had already burned through the bulk of that on poaching and subsequently sacking Marco Silva, gives you an idea of the club’s issues.

This modest income for a stadium of this size is due chiefly to Everton’s commendable pricing policies, with which last year saw the club’s fourth successive season ticket price freeze.

However, Everton’s other revenue streams are dwarfed in size by those of their North West neighbours in the Premier League.

While Everton’s 2018/19 accounts boast of the club’s second largest ever revenue, they neglect to mention that the season also represents the fourth biggest loss posted by a club in Premier League history, exceeded only by Manchester City’s 2008/09 to 2009/10 returns, and Chelsea’s 2004/05 season, spending sprees which were followed by league titles. Everton ended the 2019/20 campaign in 12th, trailing both Burnley and Sheffield United.

These losses may come as a surprise, given the relative lack of statement signings such as a Yaya Touré or Didier Drogba, but it’s worth remembering that Everton somehow spent more on Gylfi Sigurðsson than their cross-city rivals paid for the talismanic Mo Salah.

Similarly, Carlo Ancelotti was receiving a higher wage for finishing twelfth than Jürgen Klopp got for wrapping the league up before Christmas, including a £2.5 million bonus simply for avoiding becoming the first Everton manager to be relegated from the Premier League.

There’s a theme here; Ancelotti’s wages are the third highest in the league, with the club’s player and staff wage expenditure having almost tripled since 2017 and now eating up more than 80 per cent of the club’s turnover.

It’s surely no coincidence that 2017 was the last year Everton turned a profit, due chiefly to the hefty fee received for Romelu Lukaku, as well as a brief foray into the Europa League. The trend lines make for grim reading, and then there’s the small matter of work on the brand new dockside stadium, due to commence in early 2021.

The top six cannot be broken into cheaply or quickly. Everton have neither the funds to get there via a Man City-style financial Blitzkrieg (Everton’s revenue is less than half of any top six club), nor the time to replicate Daniel Levy’s war of attrition. Even then, Spurs still boast a smaller wage budget than Everton.

Vitally, those clubs also got there before the introduction of FFP, and have desperately sought to pull up the ladder behind them. If Chelsea kicked the door down, and Spurs picked the lock, Everton have been banging their head against the wall.

Ancelotti must keep his team in the European spots, or the pandemic-related relaxation of financial penalties will have to be very kind indeed to keep the Toffees’ stars out of the shop window.

Image: Jorono via Pixabay