Everton has maintained its full commitment to the construction of its new stadium after the English Premier League football club posted losses of more than £100m (€118m/$131.3m) for the third consecutive year.
Everton’s annual accounts for the 2020-21 season state losses of at least £170m can be attributed to the impact on the club of the COVID-19 pandemic, with £103m of that figure coming in the 2020-21 financial year alone. The Merseyside club said continued investment in the playing squad, coupled with the impact of the pandemic, resulted in it posting a loss of £120.9m for the year ending June 30, 2021.
This followed a loss of £139.8m in 2019-20, with the figure now totalling £371.8m over the past three years. Everton has only registered a profitable year once over the past seven years, in 2016-17, and Premier League rules state a club is in breach of financial regulations if it makes an adjusted loss of more than £105m over a three-year period. However, the PA news agency reports that Everton will avoid sanctions due to the extenuating circumstances caused by COVID-19.
Gate receipts of just £200,000 were generated for the 2020-21 season, with virtually the entire campaign played without fans in attendance at Goodison Park. Indeed, the only matchday revenue came from three Premier League matches and one League Cup quarter-final which were able to be staged with a small number of fans present at the ground.
Everton, however, has reported a record turnover of £193.1m, compared to last year’s £185.8m, and said it remains in a “secure financial position” thanks to the “continued unwavering support and commitment” of Farhad Moshiri, the majority shareholder, and cost control measures adopted by the club.
A share issue was completed during 2020-21 that involved the introduction of £100m of new funds from the club’s owner, with a further injection of £97m confirmed after the year’s end. Everton said it has also been “working formally” with the Premier League regarding its ongoing compliance with Profitability & Sustainability regulations.
Everton added: “The club has experienced a unique set of financial circumstances in recent years, including committing significant amounts of expenditure to a complex new stadium project and dealing with the continuing and widespread impact of the COVID-19 pandemic, all whilst being in the initial stages of an investment lifecycle thanks to the support of its majority shareholder.”
The annual report was released after Everton yesterday (Tuesday) issued a progress report on its new 52,888-capacity stadium at Bramley-Moore Dock in Liverpool. Everton said the fourth core, representing the four corners of the stadium, has now been installed.
The first pre-cast concrete wall has been lowered into place in the south east corner of Bramley-Moore Dock, with Everton adding that above-ground construction is now well under way on all four edges, with the Laing O’Rourke team behind the project said to be “delighted” at the progress being made.
In the annual report, Everton chairman Bill Kenwright said: “I cannot give enough praise and thanks to (CEO) Denise (Barrett-Baxendale) and her team, particularly (stadium development director) Colin Chong, for the work they have done to get us to this momentous stage in the project.
“And of course, the biggest thanks must go to Farhad, who has continued to show unstinting dedication to the club – and nothing demonstrates this more than the investment he is making into our new stadium.
“I remember Farhad saying at a general meeting a few years ago when asked about his commitment to the stadium project that ‘We’ve started so we’ll finish’. And we will.”
Everton’s operating expenses, excluding player and managerial trading, stood at £222.3m for 2020-21, down from £229.1m in 2019-20. Everton said: “The club has once again committed significant funds to the development of the new stadium and the club incurred capital cost of £20.3m for design and other work relating to the project.
“In all financial periods prior to 30 June 2021, the expenditure on the new stadium project has been expensed through the Profit and Loss account because, despite substantial investment and confidence in the project, there was insufficient certainty from an accounting perspective that future economic benefits associated with the development would have flowed to the club.
“Early in the current financial period, certainty and confidence in the project had grown to a level where there was sufficient probability that economic benefits from the development would flow to the club to permit the club to capitalise new stadium costs incurred during the year onto the balance sheet.
“The club received unanimous planning approval on the 23 February 2021 from Liverpool City Council’s planning committee and, on 26 March 2021, received planning approval from the Secretary of State for Housing, Communities and Local Government.
“This approval provided further confidence that future economic benefits associated with the new stadium project will flow to the club to justify capitalising project expenditure in the current reporting period ending 12 months to 30 June 2021.”
Earlier this month, Metro Mayor of the Liverpool Region, Steve Rotheram, revealed that Everton no longer required a £30m loan from the Liverpool City Region Combined Authority (CA) to support the development of the club’s new stadium on Bramley-Moore Dock.
Everton also announced it had suspended all sponsorship arrangements with its Russian commercial partners, including USM, which holds an exclusive option on the naming rights to the new £500m stadium.
Image: Everton
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