Why Has Everton FC Not Been Sold?

The constant search for investment by Bill Kenwright and company has always been a misnomer…..


Goodison Park by @KevenBanks
Goodison Park by @KevenBanks

Why Has Everton FC Not Been Sold?

By David O’Keefe

NOBODY is going to offer Bill Kenwright a big blank cheque and let him run Everton Football Club as he sees fit.

The correct term for this type of investment is charity, and Everton is not a charity.

The search for investment has always been just that. There has been no search for a buyer.

Even the chairman has stopped muddying the terms of this debate, or should that be project?

A project that has been in progress for 15 years and seen numerous clubs bought and sold over this period.

Yet no-one wants to buy Everton?

The reason put forward by the chairman and CEO for the lack of interest in the club is the stadium, and many supporters have accepted this as a valid one.

The club requires a new stadium or redevelopment and that costs money. Any new owner would need to meet the costs of such a project.

This was part of the rationale for the failed relocation to Kirkby; new stadium equals new owners.

The truth is any new stadium would lead to an increase in the value of the clubs shares to the benefit of the directors and major shareholders when they sell.

The controversial relocation to Kirkby eventually failed

The protestations from the chairman that nobody is buying football clubs anymore increasingly falls on deaf ears, as news breaks of clubs at various levels of the English game being bought and sold.

The most recent being the sale of Sheffield Wednesday to a consortium of Thai businessmen led by Dejphon Chansiri. And so the question returns to why has the best salesman at the club not been able to find a buyer? The answer is price.

The board want a return of 500% on the value of their shareholding. A ROI they are not going achieve and one they don’t deserve.

I will allow Colin Fitzpatrick of KEIOC to summarise the reasons why.

Talk then centred on an “astonishing” £125 million asking price. A figure made public by a club ‘spokesman’ using  Stan Collymore and his radio show to look at Everton Football Club, as the current board were put under the microscope:

“Let’s talk about a few things that the board have done in the past 13 years. They have invested nothing, disposed of the assets, increased the debts to record levels and added no value.”

A comparison of the 1999 accounts, the year the club changed hands, and the 2012 accounts opened the next segment:

“In 1999, the balance sheet was healthy; there was £20 million on the balance sheet. 13 years later, the figure is -£44 million in liabilities and all the assets have gone.”

Anybody could pick up the accounts and substitute those figures for the figures of today and realise the club is virtually worth nothing. Nobody wants to buy it because it is not worth anything; it is certainly not worth £125 million.

The stadium is a problem for any prospective buyer, the other is poor commercial performance. The one we as supporters constantly criticise, the real sore point.

We say ‘you are harming the club’, they say, ‘this is the best thing for the club’. However, to sell the club, they first need to address the stadium and poor commercial performance issues.

This explains why Kirkby, with its notional extra £52 million of value that would have been added to the balance sheet on completion – through an unknown source – was relentlessly pursued.

They desperately want a huge return on their investment. That £125 million.

It is a pity they have done nothing to deserve it.

The current indicative value of the clubs shares is in the region of £47 million, however, once the liabilities, poor commercial deals and the need for a new stadium have been factored in, it becomes clear that nobody wants to pay £125 million over the odds for a football club.

If Bill Kenwright wants to attract a buyer/investor today, without having addressed the stadium issue, poor commercial performance and liabilities, he is going to have to write off the value of his shares (£12 million) and that is not going to happen.

Next on the agenda is Walton Hall Park, yet another attempt to acquire that £125 million.

And yet another eight to ten year project.

So, is the club for sale? Yes it is.

Is anyone buying the club at that price? No.

And so it continues…..

Everton FC – Major Shareholders:

W Kenwright CBE (chairman):

Shares owned: 9,044 – 25.84%

R Earl (director):
Shares owned: 8,146 – 23.27%

J Woods (director):
Shares owned: 6,622 – 18.92%

Other shareholders: 11,188 – 31.97%

Total shares: 35,000 – 100%

As at 21/10/2014 the indicative price of a single Everton share was £1350 per share.

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David OKeefe

I love James McFadden.

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