At this time of the year, there are two areas of the Premier League table that dominate our attention – the very top and the very bottom. And no one can argue that this season hasn’t been one of the most interesting years of them all. Firstly, of course, we have had Arsenal which has dominated the top of the league for practically the whole season… but suddenly started to choke and have now been overtaken by the Premier League giants, Man City.
Then there’s Chelsea… well, what can we say about their performance thus far. Certainly not what we would expect. Even more surprising is the trouble Liverpool seems to be having – with their form up and down and a serious inability to keep a clean sheet. But what is even more interesting are those teams that are fighting for survival… with one being Liverpool’s fiercest rival, Everton. At the start of the season, no fan who enjoys betting on sports could ever have predicted that teams such as Everton, Leeds, Leicester and even West Ham would be facing such troubles.
Could Everton Face the Drop?
Yes. At the time of writing, Everton is sitting (un)happily in the middle of the relegation zone, second from bottom and the form is appalling, with three losses and two draws. The only team worse off is Southampton, who are 5 points below them. The good news, however, is that they are just a couple of points from safety and they can save themselves with a few good performances. Nottingham Forest, Leeds Utd and Leicester City all have just one point more – and so any of these could theoretically face the drop.
What Would it Mean for Everton?
There could even be doubts over the club’s ability to survive if they are relegated – as their accounts show. The club announced losses of £44.7 million for the 21/22 season – and it’s not just a one-off.
Overall, the combined losses of the past three financial years amount to a staggering £305.5 million – and, having been referred to an independent commission regarding alleged breaches of the PL’s financial fair play rules, they’ve lost a huge £417.3 million over four years.
If the team is demoted to the Championship, then whether or not they can even continue is in serious doubt. The club relies on the financial support of Farhad Moshiri, the majority shareholder – who has given the board a letter of support, agreeing to financially support them for at least 12 months. Although this isn’t seen as a legally binding commitment, the board is confident that even should the club be relegated that they will be financially secure for at least 12 months.
A New Stadium?
The club’s accounts also reveal that the team is in advanced negotiations to secure further funding for their new home stadium at Bramley Moore Dock – and the deal should be concluded within the next few months. However, their accounts have also disclosed that should they be relegated, the club would need to review its costs base, trading strategies and delay any other serious types of expenditure to offset the probable reductions in their future revenue.
A Financial Nightmare
The fact is that all of the 20 Premier League teams receive around £100m from broadcasting revenue – and a drop to the Championship would mean a hit of at least £40 million to their revenue in just one season. This is because clubs that are relegated earn ‘parachute payments’ that have been designed to help clubs who do drop down from being in instant financial trouble that first season.
Everton would receive 55% of the revenue they would have earned in their first season of relegation, 45% in the second and 20% in the third. However, other streams of revenues, such as sponsorships etc. would also take a massive hit if they drop down.
This would also lead to a Fire Sale, where many key assets would be sold at a cut price… and the big teams would be circling to get their hands on the club’s biggest and best players. This means that players such as Jordan Pickford, Dominic Calvert-Lewin and Ben Godfrey etc would all probably leave – for their own careers and for the sake of the club.
This is a tough time for the team – and their fans will be desperate for some good performances to pull them back from the brink.