Report: US firm in talks about minority stake in Everton

US investment firm MSP Sports Capital is considering a potential investment in England's Everton Football Club, people with knowledge of the matter said.

MSP has held preliminary discussions about buying a stake in Everton, which is controlled by businessman Farhad Moshiri, according to the people, who asked not to be identified because the information is private.

Not very private then if people have spoken to Bloomberg. Unfortunately the full story is behind a paywall or at least you have to register to view it.

MSP homepage

Way beyond my knowledge and expertise. First glance I would think they are a relatively small organisation, looking to expand. I could be wrong of course, but I don't see them as a major player who would propel the club forward.

However, perhaps, the owner sees them as being able to monitor the club's executive management and make suggestions along the way, but as I say, that's only guesswork from me.

“We are close to having a deal done” he said. “It's not selling the club at all. It's just bringing more expertise in terms of global sponsorship, in terms of commercial development.”

Bloomberg, 1 hr ago

Re MSP Sports Capital, here is the article in full, so you don't have to register;

US Investment Firm MSP Sports Eyes Stake in Premier League's Everton FC

By David Hellier

25 January 2023 at 22:42

GMT Updated on 25 January 2023 at 22:58 GMT

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Private Company US investment firm MSP Sports Capital is considering a potential investment in England's Everton Football Club, people with knowledge of the matter said.

MSP has held preliminary discussions about buying a stake in Everton, which is controlled by businessman Farhad Moshiri, according to the people, who asked not to be identified because the information is private.

Everton, which is building a new stadium in Liverpool, is in danger of dropping out of the lucrative Premier League. It currently ranks second-to-last in the standings, with three teams set for demotion at the end of the season in May.

A transaction would add to a string of global deals by MSP, which agreed in October to buy ESPN's majority holding in the X Games extreme sports competition. It also has stakes in McLaren Racing and several European football clubs, including G.D. Estoril Praia in Portugal and Spain's AD Alcorcon.

MSP was founded by former sports agent Jeff Moorad and businessman Jahm Najai, (An American-Iranian, don't you know?) who's a minority investor in the Phoenix Suns basketball team. Deliberations are at an early stage, and there's no certainty they will lead to a deal, the people said.

The club could also attract interest from other investors, according to the people.

Representatives for MSP, Everton and Moshiri declined to comment.

Moshiri has invested heavily in the team since buying control in 2016, but his efforts haven't been rewarded on the pitch. The team hasn't won a major trophy since winning the FA Cup in 1995.

He recently said in an interview with the chair of the team's fan advisory board that he's been talking to quality investors who can “bridge a gap on the stadium” and help bring in more talent. A lot of specialist sport investors have a “pool of knowledge” that can be secured for Everton, Moshiri said in a video of his remarks posted on the team's website this week.

“We are close to having a deal done” he said. “It's not selling the club at all. It's just bringing more expertise in terms of global sponsorship, in terms of commercial development.”

(Updates with quotes from owner interview in last two paragraphs.)

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There you have it, Farhad Moshiri is definitely looking for a small amount of investment (as MSP has only raised $2Bn over 10 years for their clients, according to their website) and what I feel Moshiri is more interested in: Sporting and Commercial expertise.

As an aside, in an earlier post, I said he may be looking for a majority investor in order to circumvent any 'actual' contract of non-dismissal with Kenwright; but even a minority investor with a capital investment of (minimum) 7% of shareholdings, would allow a special proposal for a vote of no confidence in Kenwright and Barrett-Baxendale.

To call an extraordinary general meeting (EGM), the proposer only needs to control 5% of the share-holdings, and then the special proposal can be made. At that point, as long as the proposer garners 51% or more of the 'cast' votes, they can remove the directors and chair, after a period of due process. Moshiri can abstain, and swerve any legal consequences, if a contract between him and Kenwright (or Barrett-Baxendale?) does exist?

I've just looked at the value of EFC shares (I know, privately owned and prices vary etc) but, using today's Sportico valuation of 𧺝M, and dividing it by the number of shares (135,000), it gives a value of approximately ١,592.60 per share.

I did a quick sum for a 15% investment in the shares, and that would create a 㿴.75M cash injection into the club, which means we wouldn't have to sell 'assets' immediately, and can be used as the start of a war-chest for next summer? Who knows, maybe if possible, with another equity/cash injection from Moshiri, of about 㿞M or so? Which would be easily recoupable for him in the long or short term.

However, as Jerome and Barry mention above, I've no idea what guarantees would need to be given to MSP? Though I'd imagine Moshiri would be the guarantor himself, and use increased commercial activity and player sales going forward to repay interest on the investment? I presume, that the capital would be given over 25 years, or longer as per Spurs and their stadium period for example, whilst the lender/investor gets rich off interest repayments.

I seriously think this could be a vehicle to refresh the board, oust Kenwright and Barrett-Baxendale, and stabilise and improve the playing squad.

If you got here, get a drink and curse me...

Good wishes

Red Bull Everton

Any takers?

"We invest in sports teams, leagues, and businesses in the sports ecosystem that are pursuing ambitious, challenging tasks."

We'll see how good they are.

I suspect this is the future for a lot of clubs.

Augsburg are already participating in the recruitment of potentially elite players - like the US striker Ricardo Pepi and Croatian striker Dion Beljo.

Estoril like many Portuguese sides tap into the Brazilian Market.

This is a logical development for us. We could be the next step for Pepi and Beljo, say, on route to them fulfilling their destiny as Champions League players (albeit probably not with us).

There's a degree of holding your nose and selling your soul with this sort of model but we are where we are. Football isn't what it was and there's no going back.

Unfortunately we are getting left behind by clinging to tradition.

Red-Bull? In a heartbeat, where do I sign?

I made a tongue in cheek comment a few years ago that we should buy Dundee United and make Ferguson manager. We can then send academy players and foreign talent there for development. It would all cost less than a Bolasie or Schneiderlin.

Not quite Red Bull, but maybe the supermarket own brand equivalent

I'd heard a different story, about American investors, believing they were wanting to take the club, lock-stock and barrel, so this has disappointed me, although it also wouldn't surprise me to see a complete takeover, if Everton can scramble to safety.

Maybe Simon@5, is closer to the money, and because Moshiri has pumped in millions, then I'm sure a lot of Evertonians, would love to see it turn around for him, but it goes back to my initial thought that I'd love to hear from “Deceitful Bill” and the question to Moshiri, would be, why haven't you just got rid of the ineptitude?

I'm aware money is God, but give me hard nosed professionalism and a plan, and I will genuinely be much happier for my football club. We will see🤞

My poster got lost in transfer.My concerned is the conditions the proposed investor would insist on to protect their investment.e.g Asset strip the Club in event of failure.

I think Moshiri whose expertise is in offshore financial and moving money around, not Managing a business operation, could be trying to adopt a similar model to the successful Stadium development model on the Football side.The model is he organised the Financial and Professional Management run the operation.

On the Football side Moshiri has been successful providing finance, but has fell down on the Management of the Football side.

The problem is that the Stadium side was done right, from the start, whilst on the Football side Moshiri mistakingly accepted that existing management where capable.Not only where they not capable but they are self serving as well.

So bringing Professional Sports Management has two barriers to deal with. The existing Management and the unsuitable Culture that exists a the Club. This is a really big undertaking in a crisis situation.

Trying to keep existing Management in place makes it impossible,even in a hard hat, high Vis role.

You might be on to something, but Moshiri appeared dressed up and stuffed like a Turkey by Kenwright, assisted by Barret Baxendale, in the intetview.

I wonder if Moshiri will follow the necessary advice of a Professional Sport Management outfit, which would be supported by most Evertonians.

Maybe threatened relegation may put them off, which might suit Kenwright in such a scenario.

Well researched by the way.

This is critical.

What it takes is, like any other business, an ownership model that understands its own objectives and how to achieve them. That is not set by a DoF. The DoF delivers it off the pitch and the coach / manager delivers it on the pitch.

So this could be the biggest part of the jigsaw we've been missing – and the bit that much smaller clubs like Wolves, Brighton, Leicester and Brentford have used very successfully to steal a march on us.

A lot of the problem is that Kenwright seems to be performing a highly strategic role that he has no right to perform. For the good of the club, he needs to put his own vanity to one side and let people who know how to run football commercially do their stuff.

"Jeff Moorad and Jahm Nahjafi attended Everton's match with Southampton as they consider a possible investment in the Premier League side. Former sports agent Moorad and businessman Najafi were named by Bloomberg as being interested in a stake in the club on Thursday through their investment firm MSP Sports Capital. Moorad and Nahjafi were shown around key club sites by Everton officials before the Southampton game, and talks about acquiring a minority stake have continued since then."

So perhaps more advanced than we knew? Mind you, who showed them around given the board stayed away?!

MSP buying 15% of Everton shares doesn't put a cash injection into the Club at all.

They will be buying those shares from Moshiri, it will put a cash injection into Moshiri's pocket – that's all.

A long-awaited football white paper, which will include "strong action" for club owners and directors, is set to be released by the government in February.

Culture Secretary Michelle Donelan said on Thursday that the paper would be published in "two weeks time".

This follows calls from multiple clubs for an independent football regulator.

The white paper will propose a series of reforms to shake up football, including ensuring financial security within the professional game.

Sports Minister Stuart Andrew added that the white paper will include "strong action on owners and directors to ensure they are suitable custodians for clubs".

White Paper Due February

Jahm Nafaji attended the Southampton game. Paul the Esk has a picture of him in the stand on his Twitter feed.

It's funny that, the day new investors attend a game, Kenwright suddenly announces the directors are under attack and can't attend themselves.

Is this his latest ploy to cling onto the club by detering others? I can't imagine the absence of the directors made a good impression on them.

I'm not so sure about that. The extra shares (100,000) created for Moshiri were to convert his loans into equity in the club. I don't think any money was paid back to Moshiri at that time, but he has a load more shares in the club.

Eric @21,

I imagine that Moshiri wants more cash to fund the stadium construction, and would look to sell a portion of his shares to fund the continuing work via another Shareholder Loan to the club.

In terms of the stadium ownership, which I raised before, the last accounts make it clear that the new stadium is a tangible "asset under construction" through Everton Stadium Development Ltd, a wholly-owned subsidiary.

The idea of having links to other European clubs is what interests me.

Clubs that can bring through South American players far easier than Everton have ever been able to do ( why is that when Leeds and others seemingly have little problem? ) could prove to be key in

1 improving the squad.
2 player / youth development.
3 realistic talent pool for non- playing staff ie coaches.
4 getting around financial rules and regulations.

Issuing more shares is a standard way of raising capital for a business. If Moshiri wants more capital in the club then a new share issue is the way to go. That is much safer for the future of the club than borrowing from a bank, Moshiri or anyone else.

Michael, the way I see it then is Moshiri sells some shares and trousers some cash and the new shareholder invests in the completion of BMD as debt to EFC. Unless Moshiri continues his largesse and puts money he gains from selling his shares back into the Club, unlike the greatest ever Evertonian.

So who are the shareholders of the stadium company and who are the board of directors and how is it financed?

I am the wrong one to ask Kieran, as I am quite paranoid regarding Kenwright motives in relation to maintaining his position. I would not put what you suggest past home.I also think he would see use relegation and be relegated to put off any investor that would threaten his position.

A Share is fundamentally a loan to a company that can go up and down in value and is transferable with voting rights.The latter is where it gets more complicated,with different types of shares with different rights.

Everton Football Club Company Limited (EFCCL) transferred its
shares in Everton Stadium Development Limited (ESDL) to Everton Stadium Development Holding Company Limited (ESDHCL) on 25 November 2021.

ESDHCL was formerly Everton FC Finance Limited (EFCFL) but changed it's name on 3 December 2021 and became a Person with Significant Control (PSC) of the company owning 75% or more of the shares and voting rights and having the right to appoint or remove the board of directors.

On the same date EFCCL ceased to be a PSC.

So, EFCCL does not control ESDHCL, it seems Moshiri does (75% or more shareholding?) but as these name swaps were done after the last accounts were closed out I expect they should be updated in the forthcoming accounts.

What is worrying is that all I can find on the composition of the board of directors is our incumbent three stooges.

I still have no clue as to how the money flows through the accounts. I had thought into Club coffers then on to Stadium but as of now is it divorced from the Club? It seems that way.

Sauce: sic

ESDHCL

ESDL

It would have to be a good deal for the purchaser I would have thought.

Relegation odds now are:-2/7 Bournemouth, 4/7 Everton and 4/6 Southampton 5/2 bar others. For non gamblers that means Bournemouth are the most likely to go down, then us and then Southampton. 5/2 the rest is saying that its unlikely that any of the others teams will be relegated instead!

The new stadium is a complication that Moshiri could have well done without at this time. Trust the club to get into serious relegation trouble now.

Can someone more oh fay with all this wheeling and dealing with extra shares etc explain as we stand what sort value the club has because of our present crisis.

I would expect Raymond that we're worth nothing at the moment because anyone with any interest in buying the Club will wait.

If we are relegated the price will go down purely because of the decrease in income and stricter profitability and sustainability rules.

So a prospective buyer can wait. If we're relegated he can walk away or renegotiate at a cheaper price.

But if Moshiri is looking at investment into the stadium funding and it's a separate entity from the football side?