A new era is about to dawn at Everton – pending the approval of the Premier League, Football Association and Financial Conduct Authority.
The last part of that statement is important. Miami-based 777 Partners have agreed a deal to buy a 94.1 per cent stake in Everton in a deal that owner Farhad Moshiri says “strengthens the club’s balance sheet” and ends his tumultuous seven year ownership.
But as with many things at Everton, it is not yet cut and dried. The deal must go through stringent checks before 777 officially get the keys to Goodison Park. Here’s what we know.
Who are 777 Partners?
The American private investment firm was set up in 2015 by Josh Wander and Steven Pasko and has a football portfolio that includes Standard Liege, a 15 per cent stake in Sevilla, Red Star FC, Vasco da Gama, Hertha Berlin and Serie A side Genoa.
They also invest in the British Basketball League and own the London Lions team but a buy-out of Everton is by far their most ambitious and expensive sporting venture to date.
777 is a vast, sprawling enterprise that the company claims is worth $10bn. As well as football they have stakes in 60 companies across a variety of sectors including insurance, consumer and commercial finance, litigation finance, direct lending, media and entertainment, sustainability and budget airlines.
How much is the deal worth?
Neither 777 Partners nor Moshiri would confirm figures but it is understood a deal has been struck around the £4-500m mark. The precise structure of the agreement may be a little more complex that a straightforward payment of that figure, though.
A source told i that Moshiri is likely to have taken a “significant hit” on his investment to get the deal done and he has been looking to complete the sale “for some time”. Moshiri held talks with other groups – including one from China and several in the US – but claims 777 are “the best partners” to take Everton forward.
He hinted at the reasons why he has sold up in quotes provided to the club website in which he said the “nature of ownership and financing of top football clubs has changed immeasurably” since his first investment in 2016.
In reality, the invasion of Ukraine and subsequent sanctioning of his close business partner Alisher Usmanov has created significant problems for Moshiri, who has been seeking external investment to help fund the club’s stadium project for over a year.
Why will it not be completed until the end of the year?
A key part of Friday’s lengthy statement is that it “remains subject to regulatory approval, including from the Premier League, the Football Association, and the Financial Conduct Authority”.
Given the complex nature of 777’s business model – and a number of outstanding legal issues surrounding the company – that will take time as the Premier League’s lawyers work to ensure they are appropriate owners with the finances to support the club.
The Premier League will need to see short and long-term business plans from 777, proof of funds to cover liabilities for at least the next 12 months and a list of prospective directors who will need to have their backgrounds checked.
New rules prohibiting leveraged buy outs have been introduced and in March a new set of “disqualifying events” including offences related to violence, corruption, hate crime and fraud was added to the test.
That may yet prove relevant. As first reported by investigative website Josimar some of 777’s businesses in the US have faced lawsuits centred on allegations of fraud.
777 is understood to be “vigorously defending” the suits that have not been dismissed or have already settled without an admission of guilt by the company. Indeed i has been told 777 are “extremely confident” there will be no problems passing the checks.
A source close to the deal asked: “Are the checks and balances in the Premier League significantly more rigorous than they are in Spain, Italy, Belgium and Brazil?”
i has also been told that Cheshire-based Rights and Media Funding Limited, who have a £200m loan facility with the club, are satisfied with the agreement. The firm blocked MSP Sports Capital from taking a 25 per cent stake in the club last month because they were unhappy with the terms of the deal.
Do 777 Partners have the money to complete the deal?
Potentially a £1bn question. As well as the money to buy Moshiri’s 94.1 per cent stake, they will need to find money to complete the Bramley-Moore Dock stadium project. There remains an estimated shortfall of around £200m in a build that could cost up to £760m.
Then there is investment in the squad in future transfer windows and the looming Premier League commission into breaches of financial fair play rules which will be heard on 25 October. The club intend to “robustly defend” their position but if they are found guilty, rivals are lining up to potentially take legal action.
Sources close to the deal told i 777 are adamant they have the funds to complete the deal and invest in the club. They point to a “strong football portfolio” as proof of that and plan to meet with supporter groups and minority shareholders in the future, when more details about funding will be provided. They intend to let the regulatory process “play out” before those meetings take place.
Will that be enough for concerned supporters? 777 employed Tifosy Capital & Advisory to try and raise nearly £200m in equity for their football portfolio earlier this year and there is no sign yet that has borne fruit.
Genoa, one of the clubs in their umbrella group, was deducted a point for a missed tax payment recently. 777, however, put that down to an “administrative error” and it was a matter of timing rather than not having the funds.
What does it mean for Sean Dyche and director of football Kevin Thelwell?
i understands that the prospective new owners are fans of the work done by Sean Dyche and Kevin Thelwell and are fully supportive of them. They intend to keep them in place when the takeover is completed and a source told i they “look forward to working with them closely” when the deal is confirmed.
Of course, time will tell on that front.
Does Bill Kenwright still have a stake – and a role moving forward?
Kenwright is a two per cent stakeholder so will be part of future conversations with minority stakeholders. Moshiri promised to write to them “within days” to secure their support for the takeover.
A source told i that Kenwright’s future role has not been finalised and remains “to be confirmed”.
While the chairman was thanked fulsomely by Moshiri in his club-released statement 777 intend to revitalise the club’s board and will be submitting a list of directors to the Premier League shortly. It feels unlikely that he will be part of that future.
What is the 777 vision for Everton?
i understands their ultimate aim is for the club to be “consistently competitive on the pitch” and self-sustaining off it. Stabilising the club in the Premier League after recent relegation battles would be a start.
We have been told they will invest “financial capital and human capital” in Everton, including providing transfer funds to strengthen the squad in the January transfer window. They plan to speak to the club’s existing board and football executives to find out what the club’s issues are and the best way to address them.
The belief is that the group’s multi-club model means the club will be better prepared in the transfer window, utilising their network of scouts and “football intelligence” to improve the club. Basically this means knowledge-sharing across 777’s stable.
What does it mean for transfers?
After the summer’s “make-do” approach which saw just a £3m loan fee for Arnaut Danjuma invested, i understands 777 intend to provide “capital” for squad strengthening – if the deal is approved.
Expect a data-based approach to recruitment and potentially trading across the clubs in 777’s stable, with some of the club’s best young players potentially going out on loan. The group believe there are big benefits from operating across a network of clubs.
Will Josh Wander’s past prevent him from being a director?
Wander pleaded no contest to a 2003 drugs trafficking charge and was on probation up until 2018 for something sources close to him describe as “one stupid mistake he has long since put behind him”. Given it is a spent conviction, it is not expected to stop him from being named as a director.
i understands Wander intends to be a regular visitor to Goodison Park if the deal is passed.
What does it mean for the Bramley-Moore Dock stadium project?
Moshiri says the takeover will “secure full funding” to complete the 52,888-capacity stadium, which is on track to open at the end of 2024. But there is scant detail on the specifics.
The project is widely seen by club sources as securing Everton’s future after their recent troubles but the cost of it has put pressure on their finances. Fans will want to hear in much more detail how 777’s takeover ensures the project will be delivered.
What do fans make of it?
Judging by social media, many are concerned given the issues reported about 777.
The Everton Shareholders’ Association – which represents some of the thousands of small shareholders – said receiving only a few minutes warning about Moshiri’s announcement was “disappointing” and urged 777 and the current owner to engage with them and the wider supporter base “immediately”.
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