April 11, 2024

The best is the only acceptable option. Everton Football Club has woven this motto into its identity since 1938, when the latin phrase “Nil Satis, Nisi Optimum” was originally incorporated into the club emblem.

Around the nation, there are club mottos that firmly believe in aiming high and following your aspirations. But can one even dream inside the current game’s financial structure, especially in English football?

As a supporter of a team that competes in the sixth division of English football, my happiness is derived from the prospect of occasionally being promoted and the dream of maybe making it to the FA Cup third round and fishing a big fish so that I may enjoy a great day out with the other few thousand supporters. It’s hard to ask for much more when it comes to cheering on a team like Chester. It’s almost like the fan contract I signed when I first became a fan, thirty or so years ago.

But football fandom is different for some. Everton, for example are one of English football’s most storied clubs. Nine times crowned kings of England, five times winners of the FA Cup and with a European Cup Winners Cup success among their list of achievements, a club that was so remarkably brilliant in the 1980s has been left looking up at the rest for some time now, forced to watch on while the big six pulled away in terms of revenues as the Premier League became increasingly globalised.

Let’s have it right, here. Every club that is part of the Premier League does well when it comes to getting their hands on cash that is generated through the competitions’ unrivalled popularity around the world. There is a reason why the Championship play-off final is coined ‘football’s richest game’.

Everton have been part of the Premier League since its inception in 1992, the year the English game truly changed and the split between those who dreamed and those who could achieve truly started to take root.

The Blues have been able to generate huge sums of money from being a part of the Premier League for so long, but despite having the longest stint of any top-flight club in English football, the Toffees have always had to wear the tag of being part of ‘the other 14’. Where there were seasons of success it was seen as overachievement and campaigns that should be enjoyed and savoured in isolation, and a new generations of fans who maybe didn’t get to see what a wondrous team Everton were in the 1980s were conditioned to thinking that ‘Nothing But Pretty Good Was Good Enough’.

Everton were landed with a draconian 10-point deduction earlier this month for breaching the league’s profit and sustainability regulations, with a charge brought forth by the Premier League against the club upheld by an independent commission. It came after the Toffees were found to have breached PSR by almost £20m, with the club having lost more than £400m over the last four years.

Mitigating factors were put forward by Everton in their defence. As with every team, the pandemic significantly impacted the club, which had stadium build on the banks of the River Mersey to also manage, but the Russian invasion of Ukraine significantly affected the club, with key sponsors such as USM and MegaFon having their partnerships ended, while there was to be no further support through any partnerships related to Alisher Usmanov-owned firms.

Farhad Moshiri, Everton’s owner since 2016, has poured in, by rough estimate, more than £700m since acquiring the club, and with a significant amount of his wealth tied up in the USM business through his five per cent shareholding, there is little appetite for him to continue losing money ahead of the sale of the club to American investment firm 777 Partners, a deal that still requires regulatory approval before being given the green light.

This isn’t a piece to delve into whether or not 777 Partners are the right people to take over, or just how Everton got themselves into such a financial predicament. It is to do with the fact that, in essence, the punishment arrived because of the willingness of Moshiri to throw cash at the club, admittedly without a defined strategy, in an attempt to break up the established nature of things in the Premier League.

Manchester City were able to lay the foundations for their future success, and to make the ‘top five’ a ‘big six’, due to the heavy investment arriving before Financial Fair Play rules were tightened around 2011. Big spending had occurred, but so too had ways to generate additional revenue to better support the spending when the restrictions arrived. Achieving regular Champions League qualification helped raise those revenues further, and by the time it became the same five or six teams alternating in being the annual four to reach Europe’s top level club knockout competition, the die had been cast for the rest.

If there is a book to be written on how not to invest in a Premier League football club then the foreword really should come from Moshiri.

The British/Iranian billionaire is likely to be one of the last, if not the last, of the super-wealthy individuals for whom the investment play in a football club was one borne from vanity and the desire to be the person who delivered for fans, not from any real expectation of turning a huge profit when the time came to sell the club.

There have been so many mistakes in his ownership, ones that have dragged the club to something of a cliff edge, but the intentions at the start were almost certainly around trying to make Everton great again.

In recent years the trend of private equity and investment firm money coming into European football has grown. In the Premier League, firms such as Clearlake Capital have a stake in Chelsea, Arctos Sports Partners and RedBird Capital Partners have indirect stakes in Liverpool through Fenway Sports Group, while owners such as FSG at Liverpool, ENIC at Tottenham Hotspur, the Glazer family at Manchester United and Kroenke Sports and Entertainment at Arsenal all have real focus on the bottom line and growing revenues year on year to achieve value creation in terms of the price tag the football club carries.

There is a business need for these clubs to be successful and to generate huge sums of money, whether it is to grow the value of holding companies or to get a return for investors.

But the biggest clubs have established big revenue streams, and while the Premier League is lucrative for all involved, matching those revenue streams to allow for greater spend is almost impossible for the rest, although the Saudi Arabian Public Investment Fund-owned Newcastle United are trying, bit by bit, to become part of that elite crowd. There is no guarantee on that, though, even with an ownership group with unlimited wealth.

Everton were never able to raise revenues to match spending, hence the reason they found, and continue to find, themselves in this financial hole. Shooting for the moon and missing, you’ll still land among the stars, right? Sadly, no. You’ll end up sanctioned and having to borrow more and more money from different sources to find the working capital to keep the payroll obligations met and to allow the work on the stadium which will be a revenue game changer in time, to continue.

The Premier League is the most popular football league on the planet. It has touch points in every corner of the globe and hundreds of millions, potentially into billions of supporters of its clubs, most of them among that top six that has managed to dominate financially and competitively.

But what about Leicester City winning the Premier League in 2015/16? That was a miracle, it wasn’t supposed to happen and it probably won’t again. It’s gotten even harder since then.

That Leicester win was fairytale stuff. But it also saw a familiar tale ensue the next season, with the best talent pilfered by the biggest clubs as the likes of N’Golo Kante went to Chelsea and Riyad Mahrez departed for Manchester City. There was never the chance that they would build on that success, that they would keep hold of their stars and create a new problem for the big sides. In a free market the players can move to where they see fit if the price is right, and that’s just what they did to achieve their own ambitions.

The Premier League needs its big clubs to be successful to continue to drive revenues and media rights forward. There is the view that there is enough competition within the league to make it a compelling product. With so many of the global audience following one of the big six then it is easy to see why there isn’t the desire to make it too much of an open field. Football has long had its success built on major clubs and dynasties being created, whether it be Real Madrid, Barcelona, Liverpool or Manchester United. That has never really changed.

But there should always be room for the disrupters, that is how any business flourishes and grows. But there is less and less reason for some fans to dream. The biggest clubs aren’t too concerned about the odd flirtation that a Brighton & Hove Albion or an Aston Villa might make with regards to breaking up the order of things. The likes of Moises Caicedo and Alexis Mac Allister were both snapped up, and the likes of Evan Ferguson will be in the future.

If Unai Emery takes Villa to the Champions League next season, what happens if Manchester United part ways with Erik Ten Hag, or Chelsea with Mauricio Pochettino? They would certainly feel like they would be able to prise him away from his work at Villa Park, because that is the way it is. ‘You had your fun, lads, we’ll take it from here’.

But there is something deflating about it all, about how frustrating it must be to be one of those outside looking in. Is the goal of Burnley to win the Championship title and just yo-yo between leagues? Maybe that is a decent business if you can make it work through parachute payments year in, year out, but is it right that the best some may hope for is seventh? Is it right that Everton have a ceiling on what they can realistically achieve each season?

It is why there has been such a push towards data analytics. People have always tried to find ways to beat the house, but the house always wins. For me, that’s all a bit sad. Someone must be the worst every single season and not everyone can win, that’s just sport, that’s just football, that’s just life. But every club should have the right to dream each and every season. It’s getting harder to do that, and that, to me, is sad.

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