Deloitte. al (70. Box 500) 2 Hardman Steet Manchester M460 2AT Tek +4 (0) 161 832 3555 Fax: +A (0) 161 829 3800, wnwideloite.co.uk ‘The Directors Direct 0161 4550872 Diet fax: 0161 455 6013 clo Mr M Evans anjonesadelote.co.uk Finance Director Everton Football Club Goodison Park Liverpool L44EL 2 April 2008 Dear Sirs Ican confirm that the Sports Business Group at Deloitte were appointed in September 2007 to ‘work with the management of Everton Football Club on their business plan in connection with a potential new stadium and the associated financial projections for the period to 31 May 2012. ‘We understand that the Club has explored and continues to explore a number of options in order to fund a new stadium. Whilst the Club has stabilised its position in the last few years there has been a legacy of debt which is long term in nature but which impacts on present and future borrowing possibilities. In addition, the present stadium revenue streams are constrained and as can be seen from the forecasts for the new stadium, the North West is still a relatively price sensitive market compared to areas that stadia like the Emirates can draw from. ‘A number of options are currently being pursued. These are a combination of the following: © Long term bank debt * Syndicated debt © Private Equity Funding + Securitisation of future income streams © Securitisation of new stadium naming rights * Sale of Goodison Park * Sale of Belleficld training ground. Audit, Tax. Consulting. Corporate Finances Decree Toue Tohmets UP ine ity pores bere in Eldan ales th eee unin {Grand oer sr can Sere rend by rb fr othe as tn tyDeloitte. ‘The Club expect that the combination of these funding methods will allow the Club to reach the point whereby, with the enabling contribution, the Stadium project is viable. The Club consider that additional borrowing beyond this point would expose the Club to an unsustainable level of debt, resulting in an unviable proposition. ‘The combination of the funding methods described above, along with the enabling development allow a Premiership standard stadium to be funded, suitable for the Club's purposes. Significant elements of enabling development funding have been involved in the funding of new stadium projects in the last ten years. Bolton Wanderers, Cardiff City, Coventry City, Milton Keynes Dons, Reading, Southend United and Swansea City and have all relied heavily on enabling, development to fund their new stadium projects. The reliance of Everton upon the commercial enabling development, provided in this case through the retail floorspace, is becoming more commonplace in terms of how modern stadia are required to be funded. ‘The enabling funding provided through the retail development remains an integral assumption to the successful funding of Everton's new stadium. Yours sincerely Kise Dan Jones Partner, Sports Business Group cc, — Paul Williams, Savills