For a second year running, football fans have found themselves asking the question: ‘Could Everton actually go down?’
This year, the situation is arguably looking even bleaker. They are 19th with five games left to play and even with such an experienced coach like Sean Dyche at the helm, it is extremely hard to see where the points are coming from.
The revolt on Merseyside from the fans will be vicious if the Toffees do go down to the Championship, but the owners of the club will be more concerned with what it means for the finances. As their recent financial results showed, they could be the team most affected of the three that go down.
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Everton were founding members of the Premier League in 1992 but their history in the top flight goes back much further than that.
The last time that the Toffees were relegated from the top flight of English football was way back in 1951. This is unchartered territory for almost everyone inside Goodison Park.
Everton are something of a financial enigma as far as many fans are concerned because everyone knows they have financial issues, but they are also aware that they have been able to spend ridiculous amounts of money on players and are building a new stadium.
At the end of March, the club published the annual financial accounts which showed losses of £44.7m for the 2021/22 season – the fifth season in a row in which they have recorded losses. Even though that was a reduction on the £120.9m loss from the year before, the Premier League has referred Everton to an independent commission for an alleged breach of profit and sustainability rules.
Everton CEO Denise Barrett-Baxendale has said the club is secure with majority shareholder Farhad Moshiri investing another £70m, but the auditors are far more fearful about the future of Everton should they get relegated.
“Should the club be relegated, it will require additional financial support from its majority shareholder,” they said in the report. “These matters indicate that a material uncertainty exists that may cast significant doubt over on the group’s ability to continue as a going concern.”
Somewhat damningly, ESPN journalist Mark Ogden said to Sky Sports News: “Clubs are limited to £105m losses over three seasons and their losses are probably three or four times higher than that. Whenever Everton’s day comes, whether it’s this season or next season, it’s going to be tough for them.
“It’s very unlikely that a points deduction could come in before the end of the season given the timescale but if it’s delayed until next season it could make it virtually impossible for them to stay up next season, which would mean going to the new stadium in the Championship.
“I just don’t see an easy way out for Everton. They have lived beyond their means. They need to find a way out and I just don’t see one this season or next.”
With Premier League TV deals being so incredibly lucrative, it will be a real blow to the club to miss out on that money. In all honesty, when you factor in what has been said above, missing out on the TV money pales in comparison.
The rough figure that teams towards the bottom of the Premier League are said to get from TV this season is £90m. The Championship TV deal will be significantly lower than that.
The parachute payments will of course be a help to Everton, although you can imagine them going straight into servicing debt rather than the playing squad. In the first season in the Championship, Everton would receive 55% of the Premier League TV deal they were enjoying, 45% in the next season, and 20% in the third season.
Everton can expect to earn much less from their sponsorship deals if they get relegated to the Championship. Existing deals will almost certainly have a clause allowing the sponsor to pay less money in the occasion of relegation. Any new deals will also be at lower rates.
There are a few players that Everton can expect to lose if they do get relegated this season. Jordan Pickford has been a top performer for Everton and has certainly earned the right to stay in the Premier League with another team. He will have plenty of suitors, as will James Tarkowski.
The likes of Ben Godfrey, Amadou Onana, Alex Iwobi and Demarai Gray will feel that they can play at a better level than the Championship, while Dominic Calvert-Lewin would finally be able to secure a move away from the club.
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