Everton will need to pay a loan of £150MILLION if they suffer Premier League relegation this season – as the club’s accounts reveal the sheer scale of their financial problems after a FIFTH successive year of losses
- Everton’s financial results released this week revealed they made a loss again
- Marks fifth year in a row the club have recorded a loss amid dire financial straits
- The club will have to pay £150m loan if they get relegated this campaign
The catastrophic state of Everton’s finances is underlined by an outstanding loan of £150million, immediate repayment of which can be triggered by relegation.
If Everton fall out of England’s top division, administration could loom as well as a punishment if they are found to have breached the Premier League’s Profitability and Sustainability Rules (PSR).
The loan, extended from £100m to £150m by the club’s owner Farhad Moshiri last season, is repayable in 2027. But relegation would lead to a potential immediate demand for the money, as revealed in Everton’s 2021-22 financial accounts published on Friday.
The loan agreement includes ‘a covenant that assumes the club will remain in the Premier League, therefore the board have had to consider the scenario of relegation and the availability of these facilities in that scenario.
‘The [loan] providers have indicated that they remain supportive to [Everton] under each scenario. However, at the time of approval of the financial statements, there are no contractual commitments in place that would guarantee a waiver of the amounts payable in full or in part and therefore relegation would require a material repayment of debt as per the contract.’
Everton reported a loss for a fifth successive year in their much-anticipated financial results
The club will face potential catastrophe if they’re relegated from the Premier League this term
Everton are one point above the relegation zone and just three points above 20th-placed Southampton. They play Tottenham at Goodison Park tomorrow.
Since 2016, Moshiri has provided £750m funding for the club and has confirmed to Everton’s auditors in writing that he intends to provide at least 12 months’ further funding. The accounts note, however, that ‘this letter does not represent a legally binding commitment’.
They add: ‘The directors acknowledge these uncertainties cast significant doubt on the entity’s ability to continue as a going concern.’
Everton also need to find more than half a billion pounds to complete their new stadium at Bramley-Moore Dock. The total spent by the end of June 2022 was £207m, but Moshiri revealed recently that he expects the stadium’s final cost to be £760m. The arena was due to open for the 2024-25 season, but is several months behind schedule.
The accounts show Everton made a loss of ‘only’ £44.7m last season. That followed a £120.9m loss in 2020-21 and £139.8m in 2019-20. That £313.5m three-year loss is massively more than the £105m rolling three-year loss allowed under the league’s PSR.
The top flight club has been in a period of turmoil for some years – both on and off the pitch
It is believed that the scale of this loss is what triggered the recent Premier League charge against Everton.
Losses directly attributable to the Covid pandemic can be deducted, and Everton say Covid losses amount to £90.4m in the last three seasons — leaving them still, at £223.1m, well above the PSR £105m limit.
And even though Everton can also deduct other ‘good’ losses, such as money spent on women’s football and community projects, they still seem to have breached the PSR by tens of millions.
A year ago, in their 2020-21 accounts, Everton stated: ‘Losses of at least £170m are attributed to the impact on the club of Covid-19.’
Sean Dyche is battling to keep Everton in the Premier League amid the club’s financial issues
They said that figure could even be £50m higher. ‘For the financial year covered by these accounts, £103m of the losses are associated to the pandemic.’
Everton were saying their Covid losses could amount to £220m, with £103m of that in 2020-21. The 2021-22 accounts clarify three-year Covid losses at £90.4m. Everton say this is a ‘crystallised’ figure, and that £14.8m was the crystallised figure in 2020-21, not £103m.
What remains unclear is why the Premier League did not charge Everton with a breach of the PSR a year ago, when their three-year rolling losses stood at £372m. It is feasible that Everton were still trying to convince the League that they had lost £220m due to Covid, and then by deducting other ‘good’ losses, they were within the £105m limit.
Everton say they have followed the rules and are innocent of the charge they face.
Read more at DailyMail.co.uk