Finance Guru predicts when serious Everton administration talk could start
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 believes there is a chance Everton could end up in administration if they are punished for their next set of accounts not adding up.
The Toffees were hit with a 10-point penalty for breaching profit and sustainability rules, and reports suggest they are being sued by Everton, Leicester and Burnley for a combined £300m as a result.
The Times (20 November) claimed they could face further punishment for breaching limits in consecutive seasons, and Plumley believes that mixed with potential compensation payments to rival clubs could see administration become a reality.
“I think we need to look at the chain of events don’t we,” he exclusively told Goodison News.
“So they could be punished if the next accounts don’t add up. That will be largely dependent on the Premier League. Do they feel that the sanction they’ve applied is enough? So do they go back further and look at the accounts in the future?
“That is in the Premier League’s remit of course but the other thing that we need to consider that is separate to that which could cause a cash flow problem is compensation fees.
“If they were to get approved that creates a dynamic where you’ve then got to pay out even more and then we also need to overlay the takeover with that because that is linked to everything we’ve said in the past with the price of the takeover, the amount of money the new owners would put in, and the amount of money those new owners would have to pay out.
“So if the compensation fees come into play and that derails the takeover as an example, kind of worst case scenario, and then you’ve got to foot the bill for compensation, I think that would be a more critical problem that is when you would start talking about the potential for administration.
“The further breach is with the Premier League first and foremost I guess.”
In other Everton news, Teenager set to make first start in Everton clash v Manchester United.