Everton could be in danger as a club if they are relegated from the Premier League. The gloomy assessment was released on Friday as part of the club’s annual reports, which showed losses of £44.7m for the 2021/22 season – the fifth consecutive season with a deficit. Substantial reductions in the club’s losses, down from £120.9 million the previous year, did not prevent the Premier League from referring Everton to an independent commission last week for an alleged violation of profit and sustainability standards for this reporting period.
Denise Barrett-Baxendale, Everton’s chief executive, highlighted the club’s financial stability was due to the continuous support and dedication of majority shareholder Farhad Moshiri, who has contributed an additional £70 million since the end of the fiscal year. Everton’s auditors, however, do not share Barrett-confidence, Baxendale’s citing the club’s potentially hazardous league position, with the Toffees lying only two points above the bottom three.
“If the club is relegated, it will need significant financial assistance from its majority ownership,” the auditors said in a report. “These issues suggest that there is a major uncertainty that may place significant questions on the group’s ability to continue as a going concern.”
According to the article, Everton is in advanced talks for extra long-term investment as well as the next round of funding for the Bramley-Moore Dock development for the new stadium. Clubs can lose up to £105 million over three years, but the decision surprised officials at Goodison Park, who have been working closely with the Premier League on the matter for more than a year, and they have committed to “robustly defend” their stance.
To date, six clubs have released their 2021/22 accounts: Arsenal, Chelsea, Bournemouth, Leicester, Manchester United, and Tottenham. The global Covid-19 pandemic has cost the Toffees £90.4 million over the last three years, according to Everton sources using third-party data, but the club has been further harmed by the effect on player transactions. For more than a year, the club has been doing cost-cutting operations across the board, resulting in a £20.6m reduction in staff costs and a reduction in the total wages-to-turnover ratio from 95 percent to 90 percent.
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