The financial accounts for 2023/24 told a familiar tale. For the year ending June 30, 2024, the Toffees posted a loss of £53.2million.
That came on the back of losses of £89.1million in 2023 and £38million in 2022, while the three-year cycle before that had losses of £121million, £140million and £112million for 2021, 2020 and 2019, respectively.
We already knew that Everton were going to be compliant with the Premier League’s profit and sustainability rules (PSR), with the league having communicated that all clubs were within the rules for the 2023/24 period back in January. Clubs had to submit their accounts to the Premier League for scrutiny by the end of December.
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Accounts offer a snapshot of a moment in time, and in terms of how things have changed for the football club in the 2024/25 financial year we are currently in, and how things will change for 2025/26, it has been and will continue to significant, with the 2023/24 results covering the final full season of Farhad Moshiri’s ownership, and a season when the club ended up gaining funding from the now collapsed 777 Partners, the Miami-based investment firm who provided more than £200million in funding at the time of their long-doomed pursuit of the club.
The takeover of Everton in December by The Friedkin Group falls in this financial year, and to look at the club’s figures for 2023/24 simply gives a view of a club that had started the fightback to manage costs in the face of mountains of debt, some of it high-interest bearing. It is not an adequate reflection of where the club is, and where it is heading. Significant progress has been made.
Last month, TFG secured a £350million stadium refinancing package that will reduce interest repayments on the stadium debt by tens of millions of pounds each season, money that can find its way back into the club and be put to work in more meaningful areas.
The conversion of the interest-free shareholder loan from Moshiri’s Bluesky Capital was converted into equity following the takeover to significantly strengthen the balance sheet, with the loan having been £451million.
To focus on the trend coming out of the accounts and looking towards what to expect in the next two years, some considerable work has already been done.
For starters, the club reduced its wage bill from £159million to £156.6million, while at the same time increasing turnover by £14.7million to £186.9million. That meant that the wages to turnover ratio fell from 89% to 81%, something that will take on greater significance for the club in the coming seasons with the Premier League like to move towards a squad cost ratio model of financial control, where clubs will need to be under a set threshold, likely around 80%.
Amortisation of player registrations has fallen £13.1million to £64.5million, reflecting less action in the transfer market and the disposal of some registrations that still held book value to the club.
The club’s cash flow also improved during the period, a more positive sign. In 2022/23 the club had £11million of cash at hand for working capital, a figure that rose to £26.4million for 2023/24. That position is likely to continue to improve the more time goes on and the club’s financial situation starts to get far healthier. Working capital was an issue for the club over the 12 months or so before the TFG takeover, with the stadium costs having to be met alongside wages and creditors. That saw 777 fill the gap, but that debt has since been refinanced at far lower interest rates.
“Since the accounting period ended, the takeover process has resulted in a significant strengthening of our financial platform—something that is not reflected in these figures but has already made a major impact on our long-term stability,” said Colin Chong, club director and former interim CEO.
“Despite the challenges we have faced in recent years, and during the accounting period covered by these accounts, the hard work of everyone across the Club—on and off the pitch—has ensured we have continued to move forward. That is particularly true of the progress on Everton Stadium, a project that was maintained at pace. The commitment to delivering our new home, while continuing to navigate a complex financial landscape, has been exceptional.
“With new ownership, a world-class stadium opening at the start of the 2025/26 season, and a clear plan for ongoing sustainability, we can approach the next chapter of our Club’s future with confidence.”
Chong has good reason to be bullish on the future.
Matchday revenue stood at £19.1million, up £1.8m year-on-year. That was due to additional games, and while the 2024/25 financial year will be around that figure again, the 2025/26 accounts will see a huge lift, potential double, given the club’s move to their new 52,888-seater stadium at Bramley Moore Dock, a stadium that will almost certainly see Premier League football next term.
Then there is commercial income. New deals have been struck this financial year that will likely see that revenue stream rise again. The 2023/24 period had commercial at £2.4million to take it to £21.6million, while other commercial income sat at £17million, down £2.7million due to the absence of the previous campaign’s mid-season tour to Australia.
Both commercial streams are likely to get a significant bump by the time we get sight of the 2025/26 set of accounts in early 2027. Then we will see the impact of new sponsorship deals brought about thanks to the stadium, which could potentially include a stadium naming rights deal of significant value. It may also factor in additional revenue streams from such things as music concerts or other sporting events that will be played at the stadium, all contributing to the club’s financial position as they seek to sweat the asset and make sure it delivers a major financial boost to the club, which it almost certainly will.
The debt issue was key to solve due to the messy debt structure and high interest rates on much of the debt. With that in hand, and the strategy to bring about a more sustainable footing for the club moving into the new stadium and beyond, Everton now, for the first time in several years, now look on course to be on a firm financial footing, and that is the only way that clubs can really build out and achieve competitive success.
The lessons of the past have been harsh, but Everton have found a way through. A loss of £53.2million might not be something to crow about, but the trends within the accounts, and the changes that have taken place already, mean that the trajectory is wholly different than it was 12 months ago.
