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Everton's firm accounts for the 2020/21 season have been released, and they demonstrate why staying in the Premier League is so crucial for the Toffees.
The international break is over, but whether it was a chore or a vacation varies on which team you're talking about. The messages going into the break were mixed for one club.
Everton's 1-0 win over Newcastle United put some distance between themselves and the three teams below them in the Premier League table.
But their 4-0 loss to Crystal Palace three days later reopened the wounds. The FA Cup has been a ray of hope in an otherwise bleak season for weeks.
With that out of the way, the aim for the remainder of the season is straightforward: stay in the Premier League.
Everton are at risk of getting relegated
However, even as international matches went into place, Everton made news when their corporate finances for the 2020/21 season were released.
People expected them to be bad, and that it was. The club lost £120.9 million over the course of the year, or £331,232.87 each day.
Everton has attributed £103 million of these losses to the pandemic, but the club has been spinning a lot of plates.
They have a reported average wage bill of £85,000 per week per player – the seventh highest in the division. The loss of Alisher Usmanov as their main sponsor this season could not have come at a worse time.
In summary, no other Premier League side may be more desperate to stay in the top tier than Everton. Should they drop to the Championship, the financial scale may be too large to recover.
The figures for 2020/21 are dismal, and they continue to be a trend.
Everton lost nearly £140 million in 2020 and another £111.8 million in 2019, for a total loss of nearly £400 million over the last four seasons.
Those of you who are wondering what the club has for all of this money, the answer is - not a whole lot.
Farhad Moshiri has issued two share offerings for the club in order to stabilize finances and reduce net debt to £58 million.
Everton will have to attribute their losses to Covid and the infrastructural costs of building their new stadium at Bramley-Moore Dock.
Both can be subtracted from the figures sent to the Premier League for evaluation if they are to avoid sanctions under Premier League FFP rules.
However, all of this emphasizes the importance of Everton's Premier League survival.
Relegation would result in a huge decrease in the club's television (and prize money) revenue. For the 2020/21 season, they made £130.5 million.
In the Championship, this would equate to a £40 million parachute payment.
While the club should have had relegation clauses inserted into their contracts, it has been rumored that this may not be the case.
With sponsorship from Usmanov and Premier League television money factored in, Everton's wage-to-turnover ratio for 2020/21 increased from 89 percent to 95 percent.
In the medium term, the loss of Usmanov as the primary sponsor should not have a significant impact on the team.
The USM, MegaFon, and Yota contracts (all of which originated through Usmanov) were terminated after the club received about £48 million of their total combined value of £60 million.
However, with main shirt sponsor Cazoo also confirming that their contract will expire at the end of the season, it appears unlikely that this money will be returned.
There are no guarantees that whatever sponsorship deals the club can put together will be worth anywhere near what he was willing to pay.
Furthermore, while Moshiri is known to be immensely wealthy, the extent to which he is presently wealthy is unknown.
According to The Times 2021 Rich List, he was worth £2 billion, but it's widely assumed that a significant portion of his fortune was invested in Russia.
On top of that, the chances of the new stadium coming close to its original budget of £505 million appear to be dwindling.
For example, steel prices are rising, with British Steel recently announcing their highest-ever price hike of £250 per ton, or 25%.
The news about their Premier League survival chances is mixed.
Everton lead Watford by three points and Burnley by four, despite having played two fewer games than the former and the same as the latter.
Burnley's mini-revival of one defeat in seven games ended suddenly with three consecutive losses at the start of March.
Watford's season was resurrected with a surprising 2-1 win against Southampton before the break.
Everton have an awful run in front of them, with games against West Ham, Manchester United, Liverpool, Chelsea, and Arsenal in their last 11 games.
Their trip to Burnley on April 6 will be crucial. If they win, they may be able to start feeling confident about their survival.
However, if they lose, their nerves will be stretched even more, with even harsher games to come.
Some of Everton's issues are purely coincidental. Few could have predicted the deterioration of the international situation at the start of this year.
There is no doubt that now is a tough time to be doing huge building projects. However, many of Everton's difficulties are self-inflicted.
A club without the financial clout of the Big Six has been overpaying players in terms of wages and transfer fees for several seasons.
Those signings have been a jumble of mess after a succession of managers passed through Goodison Park's revolving door.
While it's unlikely that the club will face a financial crisis right away, it's easy to see how reliant they are on staying in the Premier League for stability.
