Finance Expert reacts as eye-watering numbers emerge at Everton

Mon 17 July 2023 17:10, UK

We’re delighted to welcome football finance expert Dr Daniel Plumley as our exclusive columnist. Each week he’ll be giving his views on the biggest talking points at Everton

Dan Plumley has insisted that the interest rates surrounding the Everton loan with Rights & Media are currently “eye-watering” in isolation.

The Esk has reported that they could range between anywhere from £49,300 to £65,700 every single day as Farhad Moshiri continues his hunt for investment.

Plumley admitted that this is happening more frequently at other clubs, and that it would have been considerably worst if Everton dropped out of the Premier League.

Just to give an idea of the cost of borrowing, the cost of our financial performance, if we are using the whole of the Rights & Media facility of £200m that's costing £65.7k in interest each day. £150m is £49.3k a day
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“The figures in isolation raise eyebrows and are eye-watering in terms of interest,” he exclusively told Goodison News.

“Obviously, the deal will be structured behind the scenes that we won’t see, but I think the wider thing to raise, this is some of the dangers when you enter into these agreements with third parties who are charging high-interest rates, so if you go into this with your eyes open, you know you are going to have to pay high-interest rates.

“Again, it’s the nature of the market at the minute that some of these third parties have come into football and charged high-interest rates, we’ve seen it at a number of clubs.

“The clubs have taken them on okay, but it’s kind of back to finance 101, the debt in itself is not necessarily a bad thing, it’s not being able to service that debt that is the problem. If you can cover that payment, people will turn round and say that’s not a problem, but with everything else going on in the background, and the financial challenges, that when people start to point fingers.

“That’s the danger of third-party lenders when you see those interest rates. The point here is that figure is quite stark, but it would have been considerably worst if Everton had been relegated, so actually, survival becomes vital.”

In other Everton news, Bill Kenwright had written a new resignation letter for the club before a new twist