Everton, Elevate Sports Ventures and Bramley-Moore Dock

The news that Everton have appointed Elevate Sports Ventures “to support the delivery of its commercial strategy for the Club’s new waterfront stadium” barely raised a ripple of interest in the media or indeed most of the fan base.

Everton & USM

Yet it should for many reasons. It signifies the end of the Everton/USM relationship. Why do I say that? As is well known, USM signed and paid a £30 million option for naming rights to Bramley-Moore, and was seen as a key provider of funding, in addition to the near £20 million a year sponsorship package including USM Finch Farm, various USM brands on kit, women’s, and training apparel plus extensive advertising around Goodison Park.

The Russian invasion of Ukraine put paid to USM’s future involvement. Existing sponsorship arrangements were quickly dropped as the potential toxicity of funding from a company that derived much of its income from within the Russian State became apparent, as well as the association with its major shareholder, the Uzbek, Alisher Usmanov, sanctioned in the UK and Europe because of his close ties with Putin and the Kremlin.

Indeed, Farhad Moshiri, Everton’s 94% majority shareholder also quickly sought to distance himself from USM, ceasing to be Chairman, a board member and thought to have reduced his USM shareholding significantly prior to the Russian invasion.

Whilst it was apparent to most observers that the relationship between USM and Everton could never be resurrected, Everton described it in more cautious wording by saying “suspend” rather than terminate (March 2022). There has been no additional comment from Everton on the relationship since this time. Nevertheless, the appointment of Elevate puts paid to any prospects of a return.

The ending of the USM relationship must have had a significant impact on Everton’s future funding plans. As mentioned above, regular pre Bramley-Moore sponsorship was worth £20 million and there was the prospect that a USM company may have taken the shirt front sponsorship once it became clear that the Cazoo relationship was to be terminated early in time for the beginning of the 2022/23 season.

None of the previous USM related sponsorships have been replaced other than by the extension of the main shirt sponsor package to include ancillary apparel.

Bramley-Moore Dock funding

However, the most significant impact is the loss of funding relating to naming rights. Farhad Moshiri, at least in the earlier part of his tenure, made it clear that there were three elements to the funding of Bramley-Moore – debt, sponsor partners and himself effectively underwriting the remaining capital required.

To date, there is no stadium specific debt provider and as we are now aware, no sponsor or naming rights partner. Moshiri’s role as financial underwriter has become much more significant at a time when perhaps his personal finances come under pressure from macro-economic events, not just the invasion of Ukraine.

Of course, all of this has been met with absolute silence from Farhad Moshiri and the club’s Board. Forced into communications by protests from the wider fan base at the beginning of the year and then a hastily prepared statement on the back of a leaked open letter from the 27 Campaign in June, Moshiri has since reverted to type.

As a fan base, let alone the multitude of commercial partners, we are supposed to take on trust that all will be fine, despite the silence, despite the attempt to sell the club in the early summer, and strong indications of further interest since. He has acknowledged the possibility of accepting “investment” from a minority partner. However this presents two major challenges – firstly the price he places upon the club – good sources in the US suggest he values the club at US$460 million – a figure that cannot in any way be justified on current financial performance, the current balance sheet, current revenues and the quality of leadership within the organisation. Secondly, how many investors would wish to hold a non-controlling stake in Everton given how it has been managed in the last six and a half years?

The decision to put Bramley-Moore’s future commercial strategy into the hands of Elevate is interesting for other reasons too.

Firstly it acknowledges, despite previous claims by the club, the lack of in-house capability to do such. I’m always a believer that the best sellers are principals not agents, yet here again we go down the outsourced model.

Elevate Sports Ventures

The choice of partners is interesting. Elevate Sports Ventures is a fine company, attracted industry leaders and has grown quickly with 185 clients globally and describes itself as a ”best-in-class sports and entertainment consulting firm”.

Elevate’s Chief Executive Officer is a gentleman called Al Guido. He also happens to be President of San Francisco 49ers Enterprises, the investment arm of Denise DeBartolo York and John York and 90% owners of the American Football team by the same name.

Elevate were formed in a 50/50 partnership between San Francisco 49ers and HBSE (Harris Blitzer Sports & Entertainment) in 2018. They’ve since gone on to attract investment from other investors including Ticketmaster, Oak View and most recently Arctos.

The 49ers investment company is significant – holding more than 40 investments and as per their own claim, comfortably within the top decile of venture capital funds.

One of their most interesting investments is, of course, Leeds United Football Club. Since buying an initial stake in 2018, the 49ers now own 44% (Radrizzani still owns the majority 56% holding). However it has been reported by The Athletic that the 49ers have an agreement to purchase Leeds United outright at a valuation of US$ 530 million by January 2024. Indeed Al Guido has been quoted regarding their interest in Leeds “ for us, our engagement level is off the charts”

Does this create a conflict of interests? Elevate would say, of course, that it doesn’t, that Everton are a fee paying client, there’s no direct management of Everton through this arrangement, however given the significance of Bramley-Moore to Everton’s future commercial and therefore sporting success, the question has to be raised, and one would hope answered?

Unanswered questions

There’s no doubt that some lessons have been learned in terms of Everton’s footballing operations since Benitez’s departure. The appointment of Thelwell as Director of Football seems to be moving the club in the right direction. Recruitment has improved since the chaotic days of the early Moshiri years.

The academy, at last is completely overhauled and the support services around the first team are now full of Thelwell and Lampard’s people. Even the biggest critics of Moshiri and the Board can see evidence of a better structure and decision making by the appropriately qualified footballing personnel.

However, the business of the club remains shrouded in silence with no apparent changes to the governance model, strengthening of the board, of the executive team and the continued reliance on outsourcing key aspects of the club’s operations. Whilst transfer activity will have improved this year’s profit & loss account the club still faces large operating losses as costs continue to outstrip income.

Communication remains very poor despite claims of greater engagement with fans through the Fan Advisory Board, the Fan’s Forum and the shareholder association EFCSA.

The appointment of Elevate may improve the future commercial performance of Bramley-Moore, I sincerely hope that it does, but the appointment leaves many questions unanswered – how will Bramley-Moore be funded? What are Moshiri’s intentions after a summer of possible ownership change and still potential for new minority investors?

As ever the answer to the questions lay in the hands of the owner and Directors, the lessons of the last 12 months or so suggest sharing with the fan base is a wiser strategy than ignoring reasonable requests for timely information from the custodians of our great club.

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