Everton - Payroll
Payroll covers all the people employed by the club, from the players, through the board members, through to the match day tea-lady.
Because the numbers are so large the club like to talk about the ratio of payroll to the amount of money coming in to the club. (Try and work out for yourself how much the players must be getting paid.) So for example in 2004 the payroll was £33.2m and the income was £44.3m, a ratio of just under 75% which is widely seen as an unacceptably high ratio.
Up to 2007 wages have generally been more than 60% of the money coming into the club, and this has been a huge contributor to the losses the club has made. The 2008 ratio looks far better, despite the leap in salary. This is down to the big increase in revenue form a combination of Sky money, and European games.
The payroll was fairly static up to 2005. There was a leap in wages in 2006 due to having to pay more to attract players who wanted to play in the CL. This logic seems to be flawed and often means that when a team stops playing in the CL, and has implemented higher wages with long term contracts without the guarantee of the extra money and it all ends in tears.
The 2008 figures suggest that a good bonus system is in place, as the increase in wages only happened when revenue increased.
To see how well Everton is being run, the
comparison with Newcastle is again interesting. Newcastle wages were
£70m in 2008, when Everton's were £44.5m !!
The club is aware that the proportion of income being spent on player
wages is slightly higher than they would like at 62% but this is justified,
in their eyes, due to the investment in the squad. As ever it is vitally
important to not get the wages wrong. Long-term, high value contracts do
keep players a the club, however this only works if the right players are
bought in. Any poor buys will be hard to move on, and may still be at the
club at the end of their long, lucrative contracts.
