Alisher Usmanov pays £30m for naming rights at Everton’s new stadium
Everton have announced a record loss of £111.8m for the financial year to June 2019, an alarming plunge after the club made a £30m profit in 2017 and reported a more manageable deficit of £13.1m the following year.
The club also revealed that the Russian billionaire Alisher Usmanov, a business partner of the majority shareholder Farhad Moshiri, has strengthened his ties with the club after agreeing to pay £30m up front for an exclusive option on naming rights for their new stadium. Usmanov’s holding company USM already sponsors Everton’s training ground.
Premier League sustainability rules allow for a £105m loss in any three-year period, and Everton are currently nearing that maximum with overspending of around £94m, though the club say they are committed to operating in a financially sustainable manner.
It was revealed at an AGM in Liverpool city centre on Tuesday evening that spending on players’ wages has also risen to £160m, meaning an already precarious wage-to-revenue ratio increased from 77% in 2018 to 85% last year.
The club’s chief executive, Denise Barrett-Baxendale, said: “The accounts released today reflect our ambition and position as a club in the early stages of an investment programme. We have been aware of and planned for the impact the investment would have on our short-term profitability but this is part of a long-term business plan that demonstrates our commitment to operating in a financially sustainable manner.”
Everton are looking to move into a new £500m stadium by 2023, and Moshiri was unable to attend the AGM due to “advanced negotiations” taking place with a potential investor in the docklands project.
Most of Moshiri’s investment so far has been in the playing and management staff, though with Everton in 11th place in the table and on their fourth manager since he took over in 2016 the return on the club’s outlay is open to question. It was not all bad news at the AGM, however. Carlo Ancelotti’s appointment as manager was greeted as a positive move, the club posted the second-highest turnover in their history (£187.7m) despite not playing in Europe, and the net debt position was down from £65.7m to £9.2m.
An interest-free loan for £50m from Moshiri was the main reason net debt fell so sharply, his personal investment in the club since purchasing a majority stake rising to £350m as a result. “Mr Moshiri’s investment has been vital and impactful,” Barrett-Baxendale said. “Our ambition has not changed, but we knew it would be challenging and could not happen overnight.”