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Louis

Wages/turnover Rate - Deloitte And Touche

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I was interested if not a little concerned to read that Everton spent 75% of their turnover in the 2006/2007 season on wages (‘wages ‘also covers agent fees).

 

The club were left with a deficit of £8.1million that season despite finishing 6th in the league; also our total wages paid (£38,427,000) was below the average in the Premier League (£48,450,000) and 9th highest in the league. We were well and truly punching above our weight as all the ‘top four’ teams had a wage bill more than double ours whilst Spurs ‘ and Villa’s bill was £5million greater.

 

According to football finance expert and Evertonian Prof. Chris Brady “If you can keep your expenditure on salaries below around 55 per cent of your revenue, you are going to be viable.”

 

Going by that logic, Everton needed to increase revenue by £10,247,200 in 2006/2007 to be a viable business. That is quite simply shocking and to me confirms more than anything how David Moyes is carrying the club as without him and the prize money his team earned we would have been struggling even more so. If Everton’s wage bill was 55% of revenue then Everton would have been the fourth lowest paying club in the premier league that season. When you take into account that Everton had the 7th highest average attendance in the country that year, all signs are pointing to Everton’s need to develop a way of gaining revenue from outside of Football.

 

Here’s a table showing Wages/turnover ratios of Premier League and Championship clubs in 2006-07:

 

Team Name % of turnover

used for wages

Tottenham 42

Man United 44

Arsenal 50

Sheffield Wednesday 51

Sheffield United 57

Liverpool 58

Watford 58

Reading 59

Bolton Wanderers 60

Norwich City 60

Premier League Average 63

Manchester City 64

Plymouth Argyle 65

Southampton 65

Ipswich Town 68

Chelsea 70

Newcastle United 72

Leicester City 73

Wolves 73

West Bromwich Albion 73

Everton 75

West Ham United 76

Hull City 77

Championship Average 79

Middlesbrough 80

Aston Villa 82

Birmingham City 85

Blackburn Rovers 85

Stoke City 88

Fulham 89

Portsmouth 90

Cardiff City 90

Sunderland 90

Queens Park Rangers 94

Charlton Athletic 95

Preston North End 97

Wigan Athletic 100

Coventry City 101

Burnley 102

Derby County 125

 

And another showing the amount in wages spent by Premier league clubs from 2006/2007:

 

Chelsea 132,817,000

Man United 92,310,000

Arsenal 89,703,000

Liverpool 77,589,000

Newcastle 62,475,000

Premier League Average 48,450,000

West Ham 44,160,000

Tottenham 43,804,000

Aston Villa 43,194,000

Everton 38,427,000

Middlesboro 38,270,000

Portsmouth 36,888,000

Blackburn 36,712,000

Man City 36,381,000

Fulham 35,169,000

Charlton 34,297,000

Bolton 30,715,000

Reading 29,815,000

Wigan 27,480,000

Sheffield United 22,421,000

Watford 17,636,000

 

Some reports also say that the club was below the league average for stadium utilisation last season. I do not find this surprising and have often wondered why the Everton reserves can not also play at Goodison Park. I believe that introducing a new pitch surface technology would allow for first team games and reserve games to be played) with little or no problems, the cost of installing the pitch would no doubt be cheaper than paying to use the Halton Stadium.

This is not as far fetched as you may think and there are many examples of a multi-use-stadium in the United Kingdom.

 

• Wigan Athletics’ JJB Sports stadium also host Wigan Warriors Rugby team games

• Hull City’s KC Stadium is also home to Hull FC of the Rugby Super League

• Doncaster Rovers Keepmoat Stadium is also home Doncaster Rugby League Club and the ladies football team Doncaster Belles.

 

Doncaster boasts that their pitch uses “an innovative mix of synthetic fibres and natural grass”. I never thought I’d be suggesting Everton follow Doncaster’s example. Whilst most Evertonians are proud that Goodison Park was the first football-specific stadium, the club really should be looking to redevelop it into a multi use stadium to help increase revenue.

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