EFC Accountancy versus EFC football reality


“Amortisation”. It’s got a lot to answer for in my view. Brilliantly explained by the ‘Esk’ of The Blueroom fame, amortisation has helped us mere mortal blues understand that despite some fairly robust appearances to the contrary, Mr Moshiri really has piled in £150m of his own money to serve and protect our beloved club. Sorted. Clearly explained. Simples. Yes? Well no actually, not simples at all.

The theory and indeed practice of amortisation, even when coupled with clear ish interpretation of our often mystical, some might say whimsical, annual accounts does little for me when it appears to be discussed in isolation from the reality that is ‘football’. And by that I mean Everton football. The school of science. The People’s Club. Or ‘our club’ as most of us still like to call it, for reasons that will never ever have anything to do with accountancy.

There’s a serious point in all that preamble. The esteemed Esk is reasonably boosting the impression that Mr Moshiri is creating the massive change in Everton fortunes we all dreamt of when he acquired 49.99999% of EFC or as it’s also known, total control without actual total control.

The problem is that the accountancy is creating a dangerously skewed picture of our owners performance and priorities and in my view we should be really concerned because the very future of the club is every inch as tied to ‘football’ as it is to a new stadium, a neater balance sheet and support for the impact of ‘amortisation’ on a grand scale.

Of course the new stadium is a huge plus, if it ever happens and yes this time it looks at least 70% likely. New quality players mean bigger wages and when spread over four or five years that means a big increase in the guaranteed financial support for running costs and that ‘guarantee’ has risen steeply in the last two years. Getting rid of the loan burden ? Well it feels like the proverbial no brainer doesn’t it ? Saves us, crumbs, the £5m a year it costs in interest. That’s just a bit under three months of Wayne’s salary.

So here’s the thing. It’s all the wrong way around. It’s been said before but I don’t care I’m saying it again. Progress on the field was a better way to help than paying off a £50m loan and £6m in early repayment penalties. Progress on the field will mean that filling 60,000 seats in a new stadium is tinged with reality tho many of us still aren’t sure. Progress on the field, most notably right now staying the premiership, is way more important long term than a nicer balance sheet. It really, really is. This business genuinely isn’t like most others where amortisation is king. This business is genuinely different. You can have truly beautiful premises, with quality apparently built in to your delivery model, but if your sales are never in the top six products you are destined for a slow death where hope is occasionally raised but never produces real change, real progress. Such is Everton right now.

Gross mis Mgt has delivered two lost decades. Mr Moshiri is in the midst of quite deliberately, quite knowingly, accepting another three or four years of stuttering progress will be the reward for the Sammie’s saving our place in the league. Meanwhile he displays the business acumen off the field we expected. Not afraid to see a year already lost on the stadium project its steady eddy territory all the way. Liverpool Council seem bizarrely unconcerned that we are just 7 points off relegation even now and equally they don’t seem fussed that the last few years have re enforced the view that unless something changes dramatically on the pitch, we are going to keep having brushes with relegation that will put those ‘guarantees of re payment’ at serious risk of being deployed.

We are nowhere near earning ourselves a £500m stadium. The fans deserve it of course. But the clubs delivering on stadium promises are all in the business of securing on the field success, or at the very least the top six chance of competing for a CL spot each year.

I know it will drive the patient esk to distraction. But everything at the club is, as they say in certain parts, arse about face. We are NOT investing in the squad. I don’t care about the nonsense that suggests we spent all that money in the summer. We spent nothing. Or close to it. In terms of success on the field. Net transfer spend is the one true measure of investment of Mr Moshiri’s millions. Of his understanding of what matters here. A negative balance sheet of around £150m, now there’s a thing of beauty. There’s investment that helps build stadiums and gets 60,000 thru the gates. Of course I’m a simple fool and my logic is not, well, logical, as measured by the best accountancy standards and a few economic bibles thrown in for good measure. But you know what? If you get the balance wrong between accountancy and the business of football there is only one loser every time, and that’s why Sam is currently running the gauntlet of the ‘but we are Everton’ brigade, we are better than this football, like we’ve not been utter crap for 25 years and regularly find new ways to shame and humiliate the most loyal and honest supporters around.

Even now, as the AGM is about to happen, there is little sign of investing in the football side of the business beyond the importance of wages support. Tosun’s arrival, whilst very welcome, still will hardly take us much above incoming since 1st July 2017. There is no iconic signing, no arrival of four or five to make the difference and undo the abysmal misjudgements of Koeman, Walsh and yes, at times, Mr Moshiri himself whose dalliance with Jim White sums up his inexperience as to how the fans see PR and comms, and his ‘problem what problem’ approach after the summer window closed was shown to be inexperience in the raw when he was forced to sack Koeman or risk making amortisation matter even less than before.

We have to be bold. We have to push a few accountancy noses out of kilter. We have to rectify the disaster of the last two transfer windows and take some measured risks. A top quality centre back and left back, a strong and creative partner for Gueye, Not one, not two but three decent strikers to replace Rom’s 25 goals a season because they are just not arriving from our midfield.

This cry for help isn’t about rubbishing why the balance sheet, er balancing,  matters. We know it does. It’s about balancing that need with what I feel many blues urgently sense, which is that unless we invest capital in our future on the pitch all the financial strength off it will mean absolutely nothing. Because that’s why it’s important for football to beat accountancy at this point in our clubs future else we really, really, will be left behind and I suspect that shiny new stadium is much more dependent upon what happens on the field right now than many will realize when the ‘concept images are revealed at the Philharmonic.

Update at 9th January 2018, following the EFC AGM

Well, thats not yer average dull process orientated AGM we are so used to as blues. There were shocks, talk of “Voodoo”, an end to the Jim White expose phone exclusives, no images, concept or otherwise of the new stadium but, and I’m still struggling with this, news that Liverpool City Council will fund two thirds of the cost of our new home !!

Mr Moshiri showed us a video of an interview not with Sky Sports but EFC TV, in which he in my view made up for a bit of lost ground and frankly came acoss as the kindest of benefactors, a sort of Uncle that everyone would like to have, patient, understanding, hard to rattle, wise, and with as he said himself, deep pockets.

Im still waiting to see the detail behind this LCC funding. Our big mate Joe Anderson, aka the Mayor, seems to have surprised fans with a statement that leaves us smiling and asking many questions, whilst impressively driving the other lot into a twitter frenzy as “angry taxpayer of Anfield” realises that Big Stand club and it’s fans are not only seeing us plucky blues get closer to a truly iconic Mersey  waterfront location, but they are mainly paying for it ! Ta guys, nice one and all that.

Ok, calm down, it can’t be this good. It will surely be a bit of financing that clearly is great for LCC. Ownership ? Not clear. But heck this caught us by surprise and annoyed so many from the dark side that it quite made my night. Tho in essence Uncle Mosh creating the impression that Rom left us due to something his mum said and Voodoo influences…..that’s going down in AGM folklore, if AGM’s actually have folklore, Hey let’s create it if not as it’s just too good to lose.

For me, exciting tho the AGM feedback was, I heard little to remove my doubts about the way Uncle is spending his dosh. It’s still the wrong way around. It glossed over the disaterous summer window. There wasn’t reassurance that we are going to do more quality business in the window now, and there was a vaugue feeling that it’s all going to take another three or four years of squad building to get us into a place where we are worthy of that shiny new 60,000 seater stadium. Sam got a strange bit of support. Pleasure at recent defensive improvements, delight at his witty autobiography, but again, a vague impression that 18 months really does mean 18 months.

Still, it was all jolly interesting and I’m just sitting here praying that there are other surprises in store for us by 1st Feb.