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Everton could have £206m PSR budget next season as Dan Friedkin ‘will welcome’ Premier League rule change

Adam Williams

Fri 24 January 2025 14:00, UK

After Farhad Moshiri’s eight-year boom-and-bust cycle, Everton’s transition to life under Dan Friedkin and imminent move to Bramley Moore Dock will be a game-changer in terms of PSR.

In typically bold American fashion, the 59-year-old California-born bi♓llionaire has wasted no time making his mark in L4.

The headline-grabber is, of course, the return of David Moyes to the dugout a decade on from his first period in charge. But Friedkin has also made a number of less evocative but 🌃equally significant moves.

The new owner is in the process of restructuring Everton’s debt, easing what was becoming a suffocatinᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚg interest burden, for example.

The structure of the takeover meanwhile, which saw several hundred million pounds worth of soft loans converted into equity, has also spared Everton further reprisal under the Premier League’s APT rules.

In truth, Everton supporters are probably sick of hearing about the intricacies of football finance, Profit and Sustainability Rules, and constant talk over whether their club 🔴is on the brink ♒of collapse.

Instead, they would love to be able to concentrate on Premier League survival and enjoyiꦉng the last days of their 133-year residency at their spiritual home of Goodison P🧜ark.

Position	Team	Played MP	Won W	Drawn D	Lost L	For GF	Against GA	Diff GD	Points Pts
12	Crystal PalaceCrystal Palace	22	6	9	7	25	28	-3	27
13	Man UtdManchester United	22	7	5	10	27	32	-5	26
14	West HamWest Ham	22	7	5	10	27	43	-16	26
15	TottenhamTottenham	22	7	3	12	45	35	10	24
16	EvertonEverton	21	4	8	9	18	28	-10	20
17	WolvesWolves	22	4	4	14	32	51	-19	16
18	IpswichIpswich	22	3	7	12	20	43	-23	16
19	LeicesterLeicester	22	3	5	14	23	48	-25	14
20	SouthamptonSouthampton	22	1	3	18	15	50	-35	6

But like it or not, Everton will have to acclimatise to a new set of spending rul♋es based on revenue, not profits or losses next season. If Moyes can steer them away from the bottom three, that is.

Profit and Sustainability Rules (PSR) currently limit clubs to losing a maximum of £105m over a rol♑ling three-year period and have barely been revised since they replaced financial fair play (FFP) in 2013.

The fact the loss limit has not been adjusted in line with inflation o𒅌v𝓀er the last 12 years is baffling.

Football’s rate of inflation is out of control, yes, and the Premier League should not be encouraging the financial arms race in the transfer market and player wage ecosystem.

However, general inflation in the UK since PSR was introduced means £105m in 2013 is noꦓw worth £145m, so it is little wonder that m🦩ore and more clubs have found themselves flirting with the upper limit.

Although i🧔t comes several years too late for Everton and Nottingham Forest, the new framework should ♔mitigate this dragging effect.

But how will the🎃 mechanics of the modernised PSR system affect Everton and their ability to compete🥂 in the transfer market?

TBR Football spoke excܫlusively to Liverpool U💃niversity football finance lecture Kieran Maguire to find out.

• READ MORE: Everton are continuously asking about signing 📖£21m attacker

New dawn for Everton as Premier League design new PSR system

Over the summer, Premier League shareholder clubs including Everton will vote on whether to introduc𝔉e the proposed ‘squad cost control’ system, which mirrors UEFA’s model.

The new approach will𝄹 see spending on wages, transfers and agent fees capped at 85 per cent of revenue. Basically, for every £100m earned, clubs can spend £85m.

The vote is 🌜expected☂ to pass easily given that clubs have been trialling it on a non-binding basis this term, but the specifics of the system could be subject to change.

One area of ambiguity is whether profit from player sales will be included in the revenue calculation for PSR, with some outlets’ reporting suggesting that i🎉t could be omitted.

In football club accounts, profit from player sales (based on the transfer fee received minus the player’s amortised book value) does n꧅ot count towards revenue but does impact a club’s profit or loss.

However, Maguire fully expects to see player sale profit encompassed within the revenue metric under the new PSR system, which wouldꦺ be good news for Everton, allowing them to spend more.

“Under UEFA’s squad cost control rule, you take the average player sale profit over one, two and three years,” said the Price of Football author.

“It would be a huge anomaly if the Premier League did not replicate that model. I can’t see the teacher’s pet clubs like Brentford and Brighton, who use player trading as a critical element of the overall business, would be willing to sign off unless player sales were included.

“You would have crazy inconsistency in that clubs who qualify for Europe would be including the profit from player sales under the UEFA rules but not in the Premier League.

“My gut reaction is that it will be a cut-and-paste job. What is intriguing to me is that UEFA’s rules have a 31st December cut-off date, whereas Premier League do it on a season-by-season basis.

So how much, if these assumptions are ac♐curate, will Everton be able to♋ spend?

• READ MORE: Major Everton Stadium naming rights hint as big-na🔜me firm agrees £80m deal after Bramley-Moo𝓡re Dock talks

Everton’s capacity to spend under the new FFP rules

“Everton won’t have a huge amount of latitude,” predicts Maguire.

“However, their total wages has been at the top end in the Premier League in recent years but we have seen a gradual decrease from more the more alarming numbers.

“The switch to a new stadium will, at the very least, double matchday income – I think they will be aiming for £40m or £50m.

“That will impact top line and the additional wage costs in the running and maintenance of the stadium are excluded from the squad cost rule.

“So, they get the benefits of higher revenue but not the additional running costs or interest on the loans, so I think Everton will welcome this move.”

• READ MORE: Everton now in talks to sign Brazil internat🤡ional for David Moyes who left Liverpool in 202♔3

Dan Friedkin’s PSR calculation: Cuts at first, but long-term leeway?

What about specifics? How much exactly will Friedkin be able to invest on player transfers and𝕴 wages under the new PSR system?

We can’t say for certain without knowing precisely what their revenue will be in 2024-25 or exactly what the final version of the squad cost♊ approach will look like, but we can make an educated projection.

Thanks to the recently published Deloitte Football Money League which ranks clubs’ financial performances on a season-by-season basis, we know Everton’s revenue in 2023-2ꦓ4 was £187.14m

We won’t know any more specifics until the Toffees release their accounts fওor the financial year in the next few weeks🐽, but we will use expert analysis from the brilliant as a basis.

Their three-year rolling average for profit on player sales is, according to the world-renowned football finance writer, li⛄kely to be around £55.4m, giving them PSR revenue of £242.54m.

85 per cent of that revenue is £206.16m, meaning Everton will – based on their 2023-24 figures – be able to spend in the region of £206.16m on playerꦗ wages, amortised transfer fees, and agents.

For context, Swiss Ramble estimates that their total outlay on wages and amortised transfer fees last season was £217.9m, so Everton would༺ actually have to reduce their spending slightly.

However, as Maguire points out, Everton’s matchday income c🎃o𒅌uld rise from less than £20m to £50m after the move to Bramley Moore Dock.

A stadium naming rights deal and other commercial opportunities associated with the new stadium meanwhile could be worth an additional £15-25m, according to experts canvased by TBR Football.

Conservatively, if Everton earn an💞 extra £50m per season from Bramley Moore Dock, the new system will allow them to spend 85 per cent of that figure on wages, transfers and agent fees.

There will be costs linked to the new stadium too and, with construction now🐓 finished, Everton will no longer be able to deduct interest payments on loans taken out to fund the stadium from their PSR quota.

But the financial upside of their new waterfront home wil💜l far, far outweigh any potential expenses. It will be truly transformative for Everton.