Everton make annual loss of £139.9m as Covid-19 takes toll
Everton suffered a staggering loss of £139.9m in the 2019-20 financial year – £67.3m as a result of Covid-19’s impact on football – and have proposed a new share issue to the majority shareholder, Farhad Moshiri, worth £250m to cover the club’s continued losses.
Moshiri has so far invested £400m in Everton, including a fresh injection of £50m last month, and plans to further demonstrate his financial commitment through a share issue that represents an additional £250m of investment. Depending on the terms agreed, the £250m will include the conversion of previous loans by Moshiri into equity and an estimated £50m of new cash this season. The billionaire’s shareholding will increase from 77.2% to more than 93% should the share issue proposal be accepted in full.
Everton’s net debt decreased from £9.2m to £2.3m due to another £50m from Moshiri and the club insist they remain on a secure financial footing and on course to build a new £500m stadium at Bramley Moore dock. The net loss includes £19.9m spent on preparation work for the new stadium but, until planning permission is obtained, the sum cannot be capitalised on to the balance sheet. Other exceptional items include the £6.5m cost of paying off Marco Silva following his sacking as manager last December.
The Premier League has estimated that clubs are suffering a collective loss of £100m per month as a result of the pandemic and Everton’s broadcast revenue alone decreased from £132.7m in 2018-19 to £98m.
This figure includes the rebate paid to broadcasters due to the delayed finish to the season, and the result of some matches being postponed until the new financial year. Everton also invested a further £70m on players under the new manager, Carlo Ancelotti, for the 2020-21 season.
Over the past three financial years Everton have posted combined losses of almost £265m (£139.9m in 2019-20, £111.8m in 2018-19 and £13.1m in 2017-18). That breaches Premier League profit and sustainability rules allowing for a loss of £105m over three years, although that is a pre-Covid figure and restrictions have been relaxed as a result of the pandemic.
Everton’s chief executive, Denise Barrett-Baxendale, said: “Clearly this has been a very challenging year, not least from a financial perspective with the impact of Covid-19 having a profound, wide-reaching and material impact on our figures. Prior to the pandemic, we were forecasting record revenues in excess of £200m. Our final accounts show that a significant proportion of our losses have been directly attributable to the pandemic.
“However, in this period, it is encouraging that our commercial performance has improved markedly, and this will continue to be a priority moving forward. We have also continued our investment into both our new stadium project – which continues to progress in line with our project plan – and, importantly, in strengthening our management and playing staff through the arrival of Carlo Ancelotti and some key additions to our first-team squad.
“These strategically important projects have been enabled by our majority shareholder, who has further underlined his commitment with additional investment into the club, in 2019-20 and into this financial year.”