If you’re selling something it’s always a good idea to do some prinking first; a lick of paint here, a bit of spit and polish there. Timing is important too; selling a house in December or an Easter bunny in May will be tough. So too in the commercial world; “feed the ducks when they are quacking” is an old stock market saw which still rings true today – timing is everything. We suppose the same applies to selling a football club; there are times when buyers might be interested and times when they might not. For Everton the time has never seemed right. Burdened with debt, a decrepit old stadium, and perceived by some (though not this writer) as the ‘second club’ in an economically degenerating city, it is understandable why buyers appear to be rarer than a fortysomething pope.
Interesting then, that a number of factors, happily synchronized, means that the next few months might provide a window of opportunity for a sale of Everton to be negotiated:-
Secure from relegation the club is guaranteed – as a minimum – a top 10 finish and might yet make the top 4 and qualify for the riches of the Champions League.
Everton carry debts of £46m but own a playing squad conservatively worth £100m; unlike bricks and mortar the value of the playing squad is a transitory thing and is never fully recognized in the accounts. The debt burden is of course exhaustively detailed and as at 31 May 2012 stood at £46m. Though the true value of the players isn’t recognised by the accountants it certainly would be by a potential buyer and even on a conservative reckoning it’s never been higher. Let’s say the squad is worth £100m. And if the newspapers are to be believed Everton have one player, who if sold, would raise £25m, and halve the club’s debt at a stroke.
Who knows whether David Moyes will be at the club beyond the end of this season, but he is there now and has repeatedly emphasized that if a takeover were to occur he would relish the opportunity of achieving success at Everton. He has his critics, but is in our view the single most important factor in holding Everton together in the upper reaches of the Premier League these last 10 years. Furthermore it is his activities in the transfer market which have kept the club solvent and the £100m of value we ascribe to the playing squad is largely down to him. He is, for a prospective buyer, THE key employee.
The new Premier League TV deal kicks in next season and Everton’s annual revenues will rise by at least £20m, pushing annual turnover through the £100m mark for the first time.
The lack of a modern cash generative stadium is a double-edged sword, on the one hand a new, state-of-the-art stadium is an urgent requirement and would need to be financed by a prospective acquirer. However, a new owner has all options open – new stadium, re-develop Goodison, ground share – no requirement here to buy someone else’s vision. And, as we outlined in our post of 29 December “Time to follow The Old Lady” a viable, modern new ground doesn’t need to cost the earth.
This coincidence of positives might well be fleeting and, come the summer, depleted by the loss of David Moyes and some key players, so the next 50 days, culminating with the end of season game at Stamford Bridge, could be a pivotal period for the club.
Chairman and controlling shareholder Bill Kenwright has said on many occasions that the club is for sale. We do not doubt him. The question is; how engaged and professional is the search for a buyer? Is Mr Kenwright active or passive in his pursuit of a deal? Has a prospectus been prepared and specialist investment bankers contracted to find a buyer for a fee? Or, as so often in the football world, is it just being left to a persuasive individual, supposedly ‘connected’ to deliver a nod here or a wink there?