Everton have announced a £10m loss for the 2005-06 season, despite recording the second highest turnover in its history and all only 12 months after posting a £23m profit that elevated the club into football's "rich list" for the first time.
A fall from fourth to 11th place in the Premiership, and the subsequent loss of prize money as well as a drop in TV revenue of over £3m, are to blame for the club's latest financial results.
However, it is the £27m sale of Wayne Rooney to Manchester United that explains the dramatic reverse.
The bulk of the England striker's transfer fee was included in the 2004-05 results, taking Everton into the top 20 of the Deloitte & Touche football money league that season on a turnover of £60m.
Last season the club's turnover dropped by £1.9m despite an increase in gate receipts, sponsorship and advertising year-on-year, although wages to players and staff rose significantly from £30.8m in 2004-05 to £37m. "We will, of course, continue to monitor this trend closely and take appropriate action as required," the Everton board state in their annual report, which will be put to shareholders at the AGM on Monday. It confirms the club's overall debt has risen from £19.5m to £21.8m.
In his annual statement, the chairman, Bill Kenwright, describes the turnover as "a very strong result", although the report makes no mention of current negotiations to construct a new 50,000-seater stadium, a proposal that is supported by Tesco but was omitted from the report due to the "sensitivity" of the issue. Everton are also in the process of constructing a new youth academy and training complex that will allow for the sale of existing sites and could improve the club's financial footing.
"When finished, hopefully next summer, the complex will stand comparison to any such development in European football and will become the home to subsequent Everton players," Kenwright added.
Despite overseeing a significant number of job cuts, the chief executive, Keith Wyness, secured a 154 per cent pay rise thanks to two years of bonus payments and pension increases which took his salary from £177,000 to £466,000. It is believed Wyness's basic salary is now £250,000.Reuse content