There’s been some discussion as to Everton’s current debt position in recent times, particularly if as seems increasingly probable, the proposed acquisition of Moshiri’s 94.1% stake in Everton by 777 Partners fails to conclude.

Let’s start with the figures in the last set of audited accounts, dated to 30 June 2022.

The accounts showed the following:

Shareholder loans

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As at 30 June 2022, Everton Football Club Company Limited owed BlueSky Capital Limited (an Isle of Man company owned and controlled by Farhad Moshiri), £380.751 million.

This is an interest free loan, repayable at a mutually agreed date between BlueSky and Everton Football Club.

In the following financial year (to 30 June 2023) BlueSky Capital provided an additional loan of £70 million.

Therefore, to the date the accounts were signed (28 February 2023), Everton owed BlueSky Capital £450.751 million.

3rd party debt

In addition to shareholder loans, as was made clear in the Premier League Independent Commission hearing, Everton have also relied upon commercial loans or facilities provided by two sources.

One is a loan from the club’s bankers Metro Bank – originally £30 million, this Covid-related, government-backed facility is reducing by £3.75 million a year. Therefore a balance of £22.5million is expected in the accounts to 30 June 2023.

Additionally, and initially for working capital purposes but since expanded to include stadium financing, Rights & Media Funding – a specialist football lending operation – provided Everton with a rolling 5-year credit facility of £150 million to 30 June 2022. This facility has increased subsequently and now stands at £225 million. The financing is expensive with an interest rate of base rate plus 5% charged on the outstanding balance. The current base rate is 5.25%, giving an interest charge of 10.25% on sums outstanding.

Everton’s cash flow and 777 Partners

Everton’s cash flow is complicated by a number of factors: the reduced financial support from the club’s major shareholder, the proposed takeover by 777 Partners, the continued building of the new stadium at Bramley-Moore Dock, continued negative cashflow from operations, interest payments, and of course, trade creditor payments – a feature of Everton’s player trading last summer was the delay to or extended payment terms on incoming players.

The failure to accept a long-term secured, fixed-rate, senior debt funding package pre-Covid, pre the Russian invasion of Ukraine, and pre the proposed takeover by 777 Partners may prove to be Farhad Moshiri’s greatest single error. As a result, the stadium, on top of Everton’s losses, is funded by short term, not-fit-for-purpose loans.

In a takeover situation, especially when the target company (Everton) is vulnerable and dependent upon third party support to continue as a going concern, it is not uncommon for the would-be acquiring company (in this case 777 Partners) to provide financial support until such a time as the takeover is completed, in order to acquire a going concern .

Yet 777 Partners have funded Everton way beyond their and anyone else’s expectation. We are 21 weeks into a process thought to last 8 to 12 weeks. Given the difficulties 777 Partners have in funding other parts of their diverse empire, funding Everton to the tune of £160-190 million to date with no certainty of outcome seems an extraordinary act of largesse.

Of course, there’s a reason for this funding. At the Everton level, maintaining payments to Laing O’Rourke is critical. The penalties for non-payment render an already difficult position impossible. At the partnership level, acquiring Everton is critical to 777’s perceived status as a multi-club operator. Critically, it is also vital to the future funding plans of their multi-club operation.

Collectively, the 777 football clubs are loss-making and require continued shareholder support. ”Shareholder support” is said loosely – in reality, the support comes from third parties, connected and closely related re-insurers, for example. A practice which has caught the attention of regulators, credit rating agencies, the IMF, and close observers of the re-insurance market and its relationship with parent private equity groups.

Thus, for 777, fund raising from other investors is vital. 777 have (unsuccessfully) attempted to raise additional funds – perversely, the acquisition of a loss-making, capital-hungry Everton would make a capital raise for their entire football operation more likely.

MSP Sports Capital

In addition, we have MSP Sports Capital who have provided £140 million of loans to the Everton Stadium Development Company Limited. Originally, the intention was for MSP to provide a loan and ultimately (i) convert to equity and (ii) provide senior board members at group level.

This plan was rejected, in part through Rights & Media Funding objections to the future equity stake on offer. However, the loan was granted. MSP have the security over the stadium development company, the ultimate owners of the stadium and the original 200-year lease provided by Peel Holdings (owners of Liverpool Waters).

Total gross debt and its consequences

So, in total, including shareholder loans, but before trade creditors (outstanding transfer payments) Everton have £1 billion of debt. Does this matter? After all, we are perhaps only another £100 million away from completing the new stadium at Bramley-Moore Dock and are destined to move in in August 2025 immediately raising match-day income from less than £20 million to an estimated £55 million (source Deloitte) per annum. Plus, of course, future increases in sponsorship and commercial income. All predicated on remaining in the Premier League for many years to come.

It matters hugely!

Firstly, in the unlikely event that 777 Partners acquire Everton, how would they fund the acquisition, loans and future capex requirement (stadium and players) when, as evidenced elsewhere, even normal day-to-day operating costs of much smaller clubs seem to cause significant problems in serving in a timely and secure manner? There’s just no evidence to support 777’s assertion they could do such – which is perhaps why the process to date has taken so long. Other factors such as proof of and source of funds will clearly play a big part.

I stress as strongly as I can, 777 Partners are not the solution to our problems, financially, ethically and operationally. In my opinion, they are not fit and proper.

Alternative buyers

There are investors interested in Everton, there has been since it became clear more than 12 months ago Moshiri was a seller – despite his denials. However, Moshiri made his choice and deemed 777 Partners the most appropriate and suitably qualified purchasers of his stake, albeit at a significant loss to his personal fortune. The issue for potential purchasers has been to attract Moshiri’s attention; he has been wedded to the idea of selling to 777 Partners for many months – depite there being no exclusivity.

The issue for would-be purchasers today is different and more complicated. Clearly Everton’s status as a Premier League club is more questionable, particularly in the light of a second potential breach of profitability and sustainability rules. Secondly, there is the issue of how long Everton can remain a “going concern”. For a potential investor is Everton a more attractive proposition post-administration (even with almost guaranteed relegation)?

That aside, is the amount of accumulated debt, future losses. and continued capex just too much to warrant a purchase?

It’s widely accepted that Moshiri would either write off his shareholder loans and receive a small consideration for his equity, or agree to a long-term structured payment that would see a (relatively small) return over the medium to long term, having accepted his equity has no value.

The issue is what would Everton’s creditors accept? Football creditors (possibly around £90 million) are first in line. Then we have the secured creditors – I’m assuming we have no issues with HMRC.

MSP are likely to be the most secure, having the stadium development company as security for their £140 million loan. Selling the completed stadium to Everton’s future buyer or a third party would see a return of their capital and more to pay other creditors.

Metro Bank have a government-backed guarantee.

Rights & Media Funding have security over the club’s bank accounts (fixed charge) and a floating charge over all other assets.

777 Partners have a subordinated (ie, lower ranking) charge, attached to Rights & Media Funding. They would be paid (in a default situation) after Rights & Media Funding.

Assuming an alternative purchaser (ie, not 777 Partners) would they be prepared to pay off third-party debt (approximately £500 million), pay Moshiri nothing, finish the stadium (£100 million minimum) and provide working capital to fund continued losses and invest in the playing squad ( a minimum of £150 million). That in total is £750 million.

Is Everton worth that given Premier League status is not guaranteed? Even with a completed stadium and a very tight player investment budget, it’s difficult to see an investor (other than someone backed by a State) jumping at such an alternative.

Yet again, as a result of Moshiri’s misjudgement, we are backed into a corner. As stated for a long time, I don’t believe 777 Partners will get approval nor have the funding to adequately capitalise and run us.

Equally, Moshiri’s choice of 777 Partners as would-be purchasers has added enormously to our debt burden and day by day makes us a less attractive proposition for potential purchasers; one could hardly create a less favourable set of options, in my opinion.

For creditors, there’s a decision to be made once 777 Partners cease to be an option – do you allow the club to go into administration (with the consequences of relegation and punitive penalties from loss of revenue)? Or do you resolve to restructure your debt – longer term, lower coupon, debt/equity swap? (Incidentally, 777 Partners remaining an option doesn’t give creditors a free pass by any means).

Whatever the solution is going forwards, Moshiri has caused huge pain to himself, the club, the fans (most importantly), creditors, sponsors and their backers. The longer we wait for a solution or resolution, the worse our situation becomes – he needs to accept his responsibilities and work in the interests of the club, immediately.


Reader Comments (98)

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John Hall
1 Posted 10/02/2024 at 06:52:35
Excellent article, Paul.

Great summary of the depth of the shite that we stand in today.

Administration seemingly not so far away now.

Don't think there are many people with a billion pounds looking to buy an establishment in such a state as this football club.

Paul Johnson
2 Posted 10/02/2024 at 07:32:20
Premier League status is the key to our survival. A £1 billion investment in a going concern is not as much as it sounds when you look at the potential revenue.

Paul can probably give exact numbers and relate what sort of return year on year you would expect on a £1 billion investment. If you look at the Rights & Media Funding loan, which is extortionate, they are receiving 10.25% which on £1 billion is 100 million a year. I would think that, if we stay in the Premier League, our turnover would increase to over 200 million a year.

If we can significantly reduce the wage bill (part of the current journey) then invest in the academy developing players capable of actually playing at the highest level. We could be attractive.

I know this is probably a lot more complicated but numbers are relatively simple to understand and, if we remain in the Premier League with a world-class stadium, then I believe that we are an attractive opportunity. We are no quick buck though.

Paul Hewitt
3 Posted 10/02/2024 at 07:35:51
Those figures do look terrifying but probably not as bad as they look. If 777 Partners do take over, I would expect them to turn their loans into equity. Moshiri will probably write off his debt with maybe something paid in the future. So that's around £500 million gone straight away.

The MSP loan is on the stadium, not the club. The Rights & Media Funding and Metro Bank are the two the club will want to get rid of the quickest. Probably pay both off with a lower-interest loan but over a longer period.

If we can just get into the new stadium as a Premier League side, then I can see things improving financially.

Derek Thomas
4 Posted 10/02/2024 at 07:50:19
If there are other potential buyers out there plus 777 Partners, then 777 Partners must've got the nod because they suit Moshiri's best interests rather than Everton's.

A possible £1 Billion worth of debt, for fuck's sake.

I can only hope that The Greater Fool theory is correct and that, coupled with the lure of the Premier League, can drag 'somebody' in – preferably a 'somebody' who knows what the fuck they're actually doing this time.

Tony Abrahams
5 Posted 10/02/2024 at 08:17:38
What an accountant!!!

A fine mess, which is just a continuation of the club he purchased from Kenwright in many ways, albeit on a much grander scale.

But Goodison has been past its sell-by date for many years now, and just like Everton, has become nothing more than a footballing relic, so something definitely had to be done.

The plan was simple, more money than sense, an overflowing well that usually allows very rich people to get away with making stupidly expensive mistakes.

This plan was broken by government sanctions and has simply exposed that, below the surface, Everton Football Club has been nothing but a shell for decades.

Because I absolutely abhor nepotism, then I'd take anything, including administration, if it meant we could finally clear the decks of our second-rate amateurs, and hopefully come out the other side a lot stronger. But reading this very sobering piece by Paul, it does look like we are going to have to go to hell and back before things can eventually change for the better. 🤞

Tony Abrahams
6 Posted 10/02/2024 at 08:39:54
Derek, I believe my story/rumour is most definitely true, and that another group are still waiting in the wings.

I was told last week that things were running along very smoothly until Everton received their second P&S charge, and this has had a detrimental impact, because it looks like it has pushed Everton a lot closer to the trap door, and Americans, don't really understand or want to understand the concept of relegation.

We will soon find out, surely? But it does seem like Everton's fate is in the Premier League's blending machine, and so we will also find out if what they said about not wanting to punish the fans was genuine, because these people know that Everton have been mismanaged to hell, and our fans have been protesting against the board for a few years now.

In fact, If they want to look a little bit deeper, all they would have to do is go onto the pages of ToffeeWeb and they will see Everton Football Club has been split right down near the middle for at least a couple of decades now.

David Bromwell
7 Posted 10/02/2024 at 09:25:19
Thank you once again Paul, as you say in summary the longer this situation prevails the worse it becomes. So in these circumstances just what are fans purchasing when they sign up for the Bramley Moore hospitality tickets ?

What's so sad about the whole financial situation, which seems to worsen by the day, is that no one seems prepared to attempt to find an equitable solution. It's clearly not satisfactory that the decision on 777's suitability as potential owners has taken so long. And that the Premier Leagues decision to implement an unprecedented 10 point deduction was taken mid season, and timed to have its most devastating effect on the Club and its future survival.

Sadly it appears that Mr Moshiri, has passed away without leaving a Will. The Premier League seem to have no regard for the Clubs fortunes, and our potential saviours, Messers 777, unable to prove their financial worthiness.

Roll on Manchester City, and let's all celebrate, ' fair play '.

Robert Tressell
8 Posted 10/02/2024 at 09:25:44
Paul, excellent article if frankly terrifying to read.

This all sounds very worrying - but how does this compare to other Premier League clubs? I assume we are an outlier with levels of debt this high - and I assume our very existence is under serious threat. How close are we to a Glasgow Rangers situation?

Other than snippets on here and on unreliable newsfeeds, I do understand reservations about 777 but not sure why you are so opposed. You seem to suggest that they are a smoke and mirrors operation under resourced to finance Everton as well as the rest of the multi-club group. You might well be right.

Perhaps wrongly, I worry more about the takeover not going ahead.

The situation you describe is of a club heading for administration; 777 are propping us up. If the 777 deal fails then they will call in their loans surely. That's us finished? I understand that there are other possible investors around but is anyone really going to stump up the money needed?

I am doubtful; and I am doubtful that if they do they will be "the answer". We're in a hell of a fix.

If I were investing as a non-Everton fan, I would be looking at the (potential) high attendance clubs in the Championship and even third tier who have their finances in order, and possibly a decent stadium already (like Sunderland, Derby, Bolton etc).

Michael Kenrick
9 Posted 10/02/2024 at 09:26:21
As I understand the Premier League's 'fit and proper' assessment (actually called the owner's and director's test), certainly financial strength and the ability to fund a business plan would figure largely, along with questions over the source of funds.

To what extent do you think 777 Partners have already proven beyond all reasonable doubt their ability to fund Everton Football Club — to the tune of £160 - 190 million over the past 21 weeks?

And isn't there some serious conflict of interest in what the Premier League are doing here, deepening the uncertainty over Everton's ongong profitability and sustainability by, on the one hand punishing Everton for excess spending that led to unallowable losses which were in fact supported by owner funding, while also punishing the club and directly impacting their revenue streams for spending so much on a new stadium that should be exempt from such controls?

Tony Abrahams
10 Posted 10/02/2024 at 09:46:28
That’s how it feels to me Michael, and that’s why I thought that the, “you don’t know what you’re doing shout”, that was aimed at the Premier league, couldn’t have been more wrong, imo.

It looks like they know exactly what they’re doing with regards Everton, so hopefully they have got a happy ending for us in a similar way Martin Broughton, eventually helped out our neighbours, in their hour of need.

Robert Tressell
11 Posted 10/02/2024 at 10:06:57
It's a good point Michael / Tony, the Premier League seems to be working very hard to destroy the club.

The disproportionate and unprecedented points deduction.

The delay in revisiting the decision.

Delays in relation to the 777 takeover.

And on the pitch the extraordinary situation with no penalties, sendings off for phantom fouls, VAR week in week out etc.

We're a fair bit beyond circumstance and coincidence now, surely?

Alan J Thompson
12 Posted 10/02/2024 at 10:42:55
So the most likely, only possible rescuers are Gates, Musk, Amazon and the bloke who used to own Twitter. We've done "good" accountants so the question has to be asked; When does it all end, in sickness or in health, for richer or poorer, till death.....
Nick Riddle
13 Posted 10/02/2024 at 10:49:49
Sorry Robert but I don’t buy the conspiracy theory premise. I just don’t see what the Premier League has to gain from a focussed effort to destroy Everton. At the end of the day, as a club with a storied history, global name recognition and an unbroken presence in the Premier League, Everton is a valuable part of the Premier League brand. Not as valuable as the Sky Six, but valuable nonetheless.

That brand value gives me hope for the future. Paul’s article is a sobering read. If he’s correct and the 777 bid fails, it seems likely to me that administration is probably inevitable as it would allow the club to discard historic debt, making it much more attractive to alternative buyers who see value in the brand going forward.

I’m beginning to think that administration might be the best result, particularly if relegation is avoided this season and they’re given a 10 point penalty next season (following the Portsmouth precedent) giving a fighting chance to avoid relegation again.

Brian Harrison
14 Posted 10/02/2024 at 11:10:00
Paul

Just a pity that our accountant owner wasnt across the financial position of the club as much as you are, and to think he unlike you has all the financial figures to hand. Reading your accurate and very depressing state of our club I don't see anyway to avoid administration should 777 fail to convince the Premier league they are fit and proper owners. I don't doubt your figures which show us being nearly a billion pounds in debt, and this is a club valued at £450m to £600M.

I know some weeks back you suggested our loans were costing the club £32m a year in interest payments and that was before 777 put in their estimated £140m to £190m, which would push up our interest payments even further. To take on this level of debt would require a nation state rather than any ordinary investors and even for a nation state to take over they would need to be guaranteed Premier league football to make it a gamble worth taking. Seeing with a 2nd charge against the club its looking increasingly either another points deduction or administration would see us relegated. I would be interested to hear your thoughts should that scenario play out.

Christine Foster
15 Posted 10/02/2024 at 11:12:06
Nick, in any reasonable world I would agree with you, but this is all about power. Nothing more or less. For a number of years we have been a thorn in the side of Masters & Co. We irked them with our response to the sly six, but more than ever the threat of an independent regulator meant their power base, and profit, could be damaged by outside control. Everton lined up as the Patsy, incompetent management for all to see, who better to make an example of? True, they are not actually firing a gun, just loading it and pointing it in our direction. Should we die it's a shame but of little consequence to the brand, there would be wringing of hands, feigned sadness but if no regulator is appointed, then it will have been worthwhile, onwards unabated. Alas it ain't going to happen. We are Everton, who are you EPL ? Masters of your own self importance
Dickie Langley
16 Posted 10/02/2024 at 12:23:02
If we looked like finishing more than 9 points above the relegation spots, would it be worth going into administration this season? Would that help in any way?
Dennis Stevens
17 Posted 10/02/2024 at 12:50:13
Ironically, Christine, nothing has strengthened the case for an independent regulator more than the absolute shit show of the incompetent football authorities trying to deal with Everton.
David Cooper
18 Posted 10/02/2024 at 16:59:22
Can anyone give me a definitive answer?

We read nearly every day that the Premier League are doing this or that, determining who to sanction and who not to sanction, and lastly determining if 777 Partners have the right credentials to become owners of EFC. But apart from Masters, who else are the decision makers?

Is it the owners of the Premier League clubs, or their CEOs carrying out their instructions? Who exactly is sitting on the committee that should have taken 10-12 weeks to assess 777 Partners' ability to be “right and proper” owners?

Although we all hate Masters, surely he is not operating a dictatorship within the Premier League? Who are his close supporters etc?

So who the fuck is putting the knife into us, twisting it and leaving it in to fester?

Since the Premier League only exists to carry out the wishes of the 20 clubs, which of these clubs really want to see Everton trashed so much that they can never recover?

David Cooper
19 Posted 10/02/2024 at 17:11:39
Just went onto the Premier League website to see if I can answer my own question, only to find a job application for an Administration executive!

Looking at what the job entails, you would need a superhuman to carry out all the demands!
Maybe we should flood the Premier League application at people@premierleague.co.uk!

What credentials do you have? I don't like EFC!

Anthony A Hughes
20 Posted 10/02/2024 at 17:25:03
It's hard to comprehend that – at a time when there's never been more money in football – that we are in our worst financial state ever.

Accountant? Moshiri?? Unbelievable.

Brian Hennessy
21 Posted 10/02/2024 at 17:54:28
You do have to wonder why Moshiri is so fond of 777 Partners if they are as bad a prospect as many people are suggesting.

You also have to wonder where the money 777 Partners are loaning us is coming from.

The Premier League seem to be doing a lot of wondering where 777 Partners are going to get the funds from to run Everton in the future.

I wonder if the answer to all these questions is a certain Mr Usmanov?

Kieran Kinsella
22 Posted 10/02/2024 at 18:23:35
Paul,

Keith Wyness claims 777 Partners haven't actually lent us any money but made assurances they can. Something akin to a letter of credit. No idea if Wyness is accurate with that or his idea that there are other bidders but an interesting twist.

If we do go into administration, wouldn't the stadium be the most obvious asset the liquidators would sell to help recover debt owed? Obviously no one else would likely have any use for the stadium but presumably some third party would acquire it and we would end up being tenants -- and deprived of the economic benefits derived from the project.

David West
23 Posted 10/02/2024 at 22:38:47
This article is terrifying! It's a mess!

777 Partners must have funds available, they have been funding the club to the tune of £150 - 200M over the past months.

If we are looking at roughly £1B to buy and clear the debt of the club, where's the return for any investor?

We could up our turnover with the stadium to £200 – 250M possibly but what profit is in that for any investors?

If I had £1B, I'm sure I could find better ways to get a bigger and quicker return on investment. I just don't see us being an attractive proposition.

It seems the Premier League have more than just reservations about 777 Partners; the problem is, the longer they leave us in limbo, the further we get from the profitability and sustainability they preach.

The Premier League need to resolve it one way or another.

If it's administration that's needed, then wouldn't it be better to take it this season, take the punishment for administration with the point deduction or deductions, and go down, clear the debt and move forward, clearing the way for us to be more attractive to a serious investment?

David West
24 Posted 10/02/2024 at 22:50:46
Or are we battling this point deduction this season, likely survive, only to be hit with another next season, then administration and more points deducted only to be relegated next season?

The sooner we fans stop needing to worry about interest on servicing debt, shares converted to equity, credit facilities, loans secured against whatever, rolling 3-year accounting periods, and point deductions the better.

Imagine just supporting a team where all you're worried about is who's starting your next match, who's injured, who's taking penalties, and what formation you should play!!!

Kieran Kinsella
25 Posted 10/02/2024 at 23:15:41
Is Everton worth £1 billion, Paul asks?

Thinking about it again, Man Utd and Chelsea are valued at 3 or 4 times that amount. They too run the risk of losing Premier League status — not this year but in the future. They also have shit-hole stadiums.

So, in that context, Everton doesn't seem as unaffordable as Paul the Esk makes it sound. Yes, those sides currently have higher commercial income but they also have far higher wage bills.

Bob Parrington
26 Posted 11/02/2024 at 05:30:16
Hey Paul, What about a pre-pack solution?
Bob Parrington
27 Posted 11/02/2024 at 05:53:44
Christine @15. You might well be right. The problem is we are dealing with what appears to be a private company. How on earth did we reach this stage where a private company could have so much control over a national sport?

As much as I hate governmental control (too much of), I think the UK government needs to take some form of control over its national sport. There is no sense in the 10-point deduction.

Also, how can such a private body have the right to impose such a random penalty in British Law? Sounds like bullshit to me. High Court, Supreme Court, or whatever the courts are in UK, we should defend ourselves.

I've held back on my comments on this entire subject (I started following Everton in 1954, by the way) but you might understand from my comments that I am completely pissed off with this entire load of pitiful crap.

Let's get back to football being a sport! Not just a cash cow for a few like Masters.

There. I feel better for getting that off my chest.😋

Tony Abrahams
28 Posted 11/02/2024 at 08:16:06
How can a club be worth less than the cost of their new stadium?

That doesn't make sense to me — and this is why I'm certain there are other interested parties waiting in the wings to purchase Everton.

Christine Foster
29 Posted 11/02/2024 at 08:31:01
Brian @21.

I confess the same thought had occurred to me. It seemingly makes no sense to consider the 777 purchase given their current plight. As has been pointed out, 777 Partners will be borrowing the money to "buy" the club. From whom? I guess that is the real question, who is backing 777 Partners and from where?

Like all good investigations, follow the money. If it follows a circular route with a number of hand-offs to third party, BVI loan companies (just asking the question), then just who is funding the front men?

I may be a million miles away from the reality here, but, in the murky waters of global finance, who is funding whom?

John Zapa
30 Posted 11/02/2024 at 09:02:34
The Premier League is not purposely delaying the decision on the club's prospective owners. People here complaining about that don't seem to have a clue.

The reality, which Masters has openly declared, is that they have asked 777 Partners for certain documents, among them the Audited financial statement, in order to be able to take a decision.

777 Partners have been unable or unwilling to provide that, and as such, the deadlock remains and the issue gets dragged out, with 777 Partners hoping the pressure to approve or else the club faces oblivion would be enough to persuade the Premier League to approve 777 as owners.

Unfortunately this isn't going to happen: the Premier League doesn't feel the need to make any exception to the rules for 777 Partners.

I believe that, unless a White Knight appears out of nowhere with a lot of money and no care about the club's real value, then administration is the inevitable conclusion.

Robert Tressell
31 Posted 11/02/2024 at 09:23:35
777 Partners look like the only outfit willing to buy while our future is uncertain. If we get 10 points back, and soon, another investor may appear.

If we get 5 points back or fewer, then other investors will wait to see if Dyche keeps us up surely.

Unfortunately that time lag may mean we stay up – but run out of money and go into administration anyway.

Personally I can't see any way for us to go into administration and remain a top-flight club. At that stage the position gets really serious as we may find ourselves in the Championship playing the youth team and a few journeymen as well as managing a points deduction.

That situation takes you to the third tier and league games at the likes of Fleetwood. It's a long way back from there...

Mal van Schaick
32 Posted 11/02/2024 at 09:44:31
It's amazing how the points disappeared ‘rapido style‘ and yet the appeal process has dragged on for an age without an outcome to date.

In summary, the impact on Everton Football Club as a business has affected matters on the pitch, has affected matters off the pitch, and is affecting our buyers who may show an interest, but may be put off pending our appeal. This is totally unacceptable by the Premier League.

They are acting as ‘God', overseeing and sitting in judgment of a long-standing member of the Football League, who have only ever brought traditional values and high standards in football.

Never again should any club have points taken in the first instance, while an appeal is pending, because of the immediate impact it has on that club.

All Premier League clubs need to meet, to thrash out alternative rules, and take back control from the dictatorial system that is currently blighting the Premier League.

Danny Baily
33 Posted 11/02/2024 at 10:32:52
So, in summary, it's a real mess.

I hope we can muddle through, by continuing to lower the wage bill, making profits on player sales and maximising our revenue through sponsorship and the new stadium.

The alternative is administration, relegation and some time in the wilderness. As tempting as a fresh start and a relatively clean slate may be, I hope that's not the case.

As fans, we'd be in for a real shock with the loss of status.

Here's hoping we can keep things ticking over. The Blades result yesterday was a big step in that direction. A positive appeal outcome would be another.

Jack Convery
34 Posted 11/02/2024 at 11:53:39
This makes for sobering reading indeed.

To avoid relegation would seem to be the first order of business. The Premier League can help, if its appeal tribunal decides the 10-point deduction was way out of line – which in my opinion, it was.

Whatever they then come up with, must surely then be the punishment for the 2nd apparent breach, if proven, which no doubt, it will be and not just for us but Forest as well.

Will they then administer the punishment or should I say, can they administer a second punishment, in the same season to Everton FC? That seems unreasonable but as it's the Premier League who knows.

Should the scenario play out as a 5-point example for the first offence, would the 2nd offence incur a greater penalty or would it remain the same, ie, another 5 points?

Hopefully, it would be the same but if the Premier League and whoever is pulling their strings, decide Everton has to go, we all know which scenario would apply.

As for Moshiri, he, like 777 Partners, is just a front for others. The question is, who are backing 777 Partners?

Rory Grant
35 Posted 11/02/2024 at 12:29:36
Clinging on straws now. We are doomed on and off the pitch, that is a fact, and living in denial doesn't help. Conspiracy theories can be justified but don't change anything.

Do understand that retaining Premier League status is paramount to any hope of holding on to the club we have known all our lives but at the same time feeling that club is long gone.

Decades of mismanagement have brought to us to the brink and instead of dwelling in the past, we should prepare for a better and hopefully more realistic future. Wherever the new club will end up, the worst mistake will be to drag the sordid history of failure and debts along with us.

The Premier League is gone as well. It is not for the local fans anymore, global branding and tourists are more potential revenue sources and will mean that the Super League will become a reality. Do we even want to be part of that?

Raymond Fox
36 Posted 11/02/2024 at 13:15:49
777 Partners are not the answer, I'm convinced of that.
Ratcliffe could have been our best bet, but that boat's sailed, it would seem.

Moshiri couldn't foresee losing Usmanov's backing when he invested in us and the stadium, and now we are in a pickle.

If we were not now building the new stadium, we would then obviously be a more affordable purchase. A new stadium was badly needed but it's a pity that it's just happening now.

We will survive this season but what sort of squad we will be starting next season with is anyone's guess.

David Cooper
37 Posted 11/02/2024 at 16:10:46
John @30, Why would you believe anything that the Premier League say?

Jack @34, who do you think is pulling the Premier League strings? Did the fact that we were on our way to building the best stadium on Russian money really piss someone off after Covid and the Russia - Ukraine War?

For the longest while, I have been trying to find out what the decision-making process is at the Premier League? I can't believe that 20 club owners and CEOs allow Masters to make his own decisions!

What does our CEO Colin Chong have to say about the meetings he attends? Since the 10-point deduction, he has said nothing about what is going on.

Peter Mills
38 Posted 11/02/2024 at 16:36:45
Masters is surely just the oily rag, he will be being guided by his own masters, the leading, wealthiest clubs in the Premier League.

They are desperate to show how they can regulate themselves. If one club has to be sacrificed, so be it. Come to think of it, if Everton were to be sacrificed, it would do no harm whatsoever to our nearest neighbours. I would not be surprised if their sights are on fielding two separate teams, one in some Super League, the other in the Premier League.

Brent Stephens
39 Posted 11/02/2024 at 16:45:19
Peter #38,

"If Everton were to be sacrificed, it would do no harm whatsoever to our nearest neighbours. I would not be surprised if their sights are on fielding two separate teams, one in some Super League, the other in the Premier League."

An interesting thought. I wonder how the Premier League would respond to LFC fielding their second (weakest) string in the Premier League – grounds for a sanction??

Peter Mills
40 Posted 11/02/2024 at 16:56:12
Brent #39,

I think some kind of Super League is inevitable within the next 10 years. The money to be made from viewing rights around the world would be huge.

The Premier League would have little power to stop it, and I suspect they would be so terrified of losing their darling clubs that they would agree to anything.

Brent Stephens
41 Posted 11/02/2024 at 17:34:00
Peter, that raises the interesting prospect of the other lot trying to stay in the Premier League with a second-string squad! Or would their total income allow them a decent Premier League squad as well? Probably.
Barry Rathbone
42 Posted 11/02/2024 at 17:56:48
Brian @21,

I'm with you.

Every bit of analysis suggests Moshiri is taking a massive hit dealing with 777 Partners and it just doesn't make sense. Your Uzi suggestion makes sense though.

Peter Mills
43 Posted 11/02/2024 at 18:01:01
Brent,

Man City could probably do that already. The wealth to be made from a Super League would enable others to do the same.

Just musings, but plausible ones, I think.

Jarmo Rahnasto
44 Posted 11/02/2024 at 19:32:38
If the situation is this bad, I'm just wondering why wouldn't the club move into the new stadium as soon as possible? If the match-day income increases so much, there is no sense to do anything otherwise.

Still, the club decided to wait until the new season begins. Why would they do this if the club is desperate for money?

Eric Myles
45 Posted 11/02/2024 at 19:36:15
Tony #28, because the stadium isn't yet complete, a new owner will have to find the money required to complete it, plus interest charges for 20 years.

Kieran #25: "Is Everton worth £1 billion, Paul asks?"

£1 Billion Everton — The Echo, 26 June 2022

Eric Myles
46 Posted 11/02/2024 at 19:45:30
Paul, you say "The penalties for non-payment render an already difficult position impossible."

Exactly what are the penalties?

You also say Moshiri "has been wedded to the idea of selling to 777 Partners for many months – despite there being no exclusivity."

What do you mean by 'no exclusivity'?

Jerome Shields
47 Posted 11/02/2024 at 19:56:04
A new owner entity could restructure all the debt, subject to the terms of the secured and unsecured debt. The ballpark figure of £1billon is still within the parameters of an attractive takeover prospect for an investor.

Though I have been critical of the Premier League process, there is a flexibility about it that could provide an opportunity to maintain Everton as a Premier League club, with world class facilities.

I expect that Everton will be able to stay in the Premier League after the two Commissions. They are not a Championship team and would be comfortable in the Premier League. It is to Dyche's great credit that he has established this.

Man City, with a full squad, were very glad to get past the fixture with Everton. Pep Guardiola acknowledged the difficulty of playing against Everton. The Parliamentary Committee had a pro-Everton attitude, so Government support for making an example of Everton would not be strong.

Another factor that came to light was brought up on the Live Forum. Some Everton fans left early to get to their means of getting home anticipating difficulty. What they did not expect was the number of Man City fans they found ahead of them. Something they didn't come across at Goodison.

Evertonians as a fan base are a bedrock that the Premier League can't turn their backs on.

Paul [The Esk]
48 Posted 11/02/2024 at 19:58:25
Apologies - I didn't realise my article had been published on ToffeeWeb - I will answer as many questions as I can
Paul [The Esk]
49 Posted 11/02/2024 at 20:37:24
Answers to the comments made so far:

#3 Paul - the assumption is that Moshiri (or a new owner) writes off his shareholder loans to zero leaving £500M approx external debt. The issue is that that debt plus what is required to complete the stadium plus opex and squad rebuilding costs far exceeds the value of the club, even with a completed stadium and a realistic chance of maintaining Premier League status. I've spoken with several potential purchasers, none of whom would consider that scale of investment.

Re MSP – any change of ownership requires the repayment of the MSP loan.

#7 David - Fans signing up for seats at the ne stadium (and I understand the reasons for doing so) are making a judgement that Everton will be a going concern in 18 months time.

#8 Robert - I'll have to check but our gross debt is (I think) the highest in the Premier League. Our problem is the servicing costs (interest payments) and the fact we need a significant amount of additional funding to get us through the next 18 months.

I, and investigative journalists have consistently documented 777's own funding problems, the poor state of their portfolio companies, the growing regulatory concerns in the US over their funding model, and finally there's no evidence that their multiclub operation works, certainly no evidence of improved performance and adequate funding

#9 Michael - You have to look at how 777 Partners have funded the loans to date - by borrowing monies off owned and close-relation insurance companies - this is not their money, it is from third party sources and is subject to close regulatory scrutiny.

I agree that the Premier League role is completely untenable

#18 David - it is the Premier League board comprising of : Alison Brittain CBE – Chair, Mai Fyfield – Independent Non-Executive Director, Dharmash Mistry – Independent Non-Executive Director, Matthew Ryder KC – Independent Non-Executive Director, and Richard Masters – Chief Executive and Director plus of course an army of lawyers and advisers.

# 22 Kieran - unfortunately Keith is incorrect. 777 Partners have provided funds (otherwise we would have become insolvent). However, the last £30 million has been a pledge, not cash.

#26 Bob, that has to be a possibility.

#28 Tony, the club itself has a negative value given its losses and its future investment requirements. Therefore club and stadium are worth less than the stadium (in simple terms).

#30 John, you are absolutely correct re the Premier League and 777 Partners.

#45 Eric - for the reasons expressed above, Everton are not worth close to £1 billion.

#46 Eric - If Everton default on their agreed payment schedule, Laing O'Rourke have the right to re-price the stadium construction contract to reflect increased costs, potentially adding a huge amount to the total build cost.

Re exclusivity, Moshiri is not exclusively tied to 777 Partners, he can enter negotiations with other investors should he choose so to do.

Michael Kenrick
50 Posted 11/02/2024 at 21:22:03
Jarmo @44,

You are not alone in thinking that the club will be missing out on income from the new stadium by delaying its full opening until August 2025.

We had a very full discussion of the pros and cons just before Christmas on this thread: Move to Everton Stadium set for 2025-26 season.

Jerome Shields
51 Posted 11/02/2024 at 22:20:59
The decision coming next week from the Appeal imo is already having a impact on the usual attempt by the Premier League to remain faceless.Masters PL Chief Executive is clearly exposed and is now under pressure that he was not expecting. He is now associated with a questionable process and a flawed outcome.

The Premier League Chairman Alison Brittain who has managed to be faceless, is the next in line for exposure.I can't see this now not having a impact on the outcome of the Appeal, though I think that things have unfolded too much for Masters and Britton already.

Evertons future is very much tied to the Premier League's immediate future, whether the latter like it or not.The Ownership issue at Everton is a separate issue, which imo the Premier League will be under pressure not to exasperate any further


Jarmo Rahnasto
52 Posted 11/02/2024 at 22:32:15
#50 Michael

Thanks for the link.

Eric Myles
53 Posted 12/02/2024 at 00:26:55
Paul, surely 777 Partners have an agreement in place for the purchase of the Club from Moshiri?

They are not just pouring money into the Club and hoping one day they will own it?

David Cooper
54 Posted 12/02/2024 at 18:06:15
Paul,

Thanks for the answers and putting names to the Board of the Premier League. Can you go one step further and explain the relationship between the members of the board (do they know anything about football?) and the CEOs and owners of the Premier League clubs? Does the board carry out the wishes of the owners etc, as example by the vote last week?

I am really trying to figure out who makes the decisions! Thanks!

Paul [The Esk]
55 Posted 13/02/2024 at 14:22:22
David (54),

It is clear that the decision-makers are the 20 clubs – they set the rules as handed out in the Handbook published each year. It is the role of the board of directors to make sure the rules are adhered to and, in the event of a breach, follow the processes as laid down in the rules to remedy the breach.

The question we have as Evertonians is do Masters and his board do so fairly, legally, and without favouring certain clubs within the Premier League?

Simon Jones
56 Posted 13/02/2024 at 15:47:27
Putting all emotion to one side, something seldom encountered amongst football fans, does it not look as if we are heading for administration? In fact, to be able to go forward without the weight of the debt, does administration not look like the more appealing destination?

Otherwise, come 2025, we might just limp into the new stadium, still clinging on in the Premier League, £1.1B of debt around the club's neck (stadium requires £100M more) and all of us fans still praying for a wealthy benefactor to save us.

I hate this, I hate thinking like this, I hate being a supporter of a club that other fans accuse of cheating. It is a shit show far beyond anything I could have imagined. I used to feel sorry for the real Man U fans who hate the Glazers and the way they loaded the club with debt, but the Glazers are like the tooth fairy compared to what we have.

Everton have a turnover of £180M and ONE BILLION POUNDS of debt. I have no idea how we get out of this.

Paul Hewitt
57 Posted 13/02/2024 at 16:05:43
Simon @56. 130 million of that is owed to 777 that will be turned into equity once they buy the club. £500 million is owed to moshiri who will probably wait till the club is in better financial state before he gets anything. The rest will probably be paid off and put into one loan at a lower rate but over a longer period.
David Vaughan
58 Posted 13/02/2024 at 16:13:20
Meanwhile, in the blink of an eye...

David West
59 Posted 13/02/2024 at 16:35:54
Paul

Do you belive administration would be a way to free us from some of the debt burden?

The penalty for it is less than we have been deducted this year, so if the 777 deal doesn't go ahead, do you believe its the only way Moshiri can put the club in a more attractive position for an investor?

Is it just a point deduction for going into administration or are their other sections imposed?

What are the implications?

Jay Harris
60 Posted 13/02/2024 at 16:47:46
I am not as despondent as some other posters, nor the Esk.

Todd Boehly paid £4 billion for Chelsea and spent another £1 billion on new players and yet, without the points deduction, we wouldn’t be far off them and we have a brand new £800million stadium as an asset despite the loans against it.

The million-dollar question is why 777 Partners are being given preferential treatment and, as some have pointed out, this may be related to Usmanov. I have always wondered why Rights & Media Funding blocked MSP but not 777 Partners.

Rennie Smith
61 Posted 13/02/2024 at 17:08:20
For those saying administration may be the best bet, here are the clubs that have slipped into admin since 2010:

Aldershot Town
Bolton Wanderers
Bury
Coventry City
Crystal Palace
Darlington
Derby County
Plymouth Argyle
Port Vale
Portsmouth
Rhyl
Rushden and Diamonds
Wigan Athleticism

Not exactly a stellar line up of subsequent success is it? Who knows… we might buck the trend, but admin + relegation may also equal extinction.

John Burns
62 Posted 13/02/2024 at 17:12:33
If we did go into Administration, would they give us a point back?
Simon Jones
63 Posted 13/02/2024 at 17:22:29
I am yet to hear a narrative that shows a meaningful way out of the debt problem other than "Sovereign Wealth Fund".

Genuine question, does anyone have a clue?

Danny Baily
64 Posted 13/02/2024 at 17:49:37
Simon 63,

An owner willing to service the debt while we bring down the wage bill, make a profit from player sales and increase revenue, both matchday through the new stadium and through sponsorship. All while staying in the top flight.

That's the only path forward that doesn't involve administration and relegation that I can see.

David West
65 Posted 13/02/2024 at 22:12:24
Danny 64.

How can we slash the wage bill any further and Still compete in the league?

Rennie 61.

If we can survive this season with a 10-point deduction, who's to say we can't survive next season with a 9-point deduction?
I'm not totally sure a point deduction is the only sanction for going into administration, that's why I was asking Paul the question.

If anyone has actual facts about what the implications of administration are, for example, how it affects the debt position, stadium, points, transfer embargos or any other issues, I'm interested to hear, as it seems a very real possibility the longer the league fail to decide on 777 Partners.

David Cooper
66 Posted 13/02/2024 at 22:17:05
Jay 60 - what do you mean by 777 Partnerss being given preferential treatment by the Premier League? Are you being sarcastic!

I am one of those that think our previous very clear links to Usmanov money is close to the root of the negative feeling exhibited by the Premier League owners who are fearful of what a new amazing stadium may mean for Everton?

As Paul has explained, the Premier League Board only carry out the wishes of the clubs. But we know all 20 clubs are not treated equally. So who really does have it in for us while protecting Chelsea and Man City?

David Cooper
67 Posted 13/02/2024 at 22:23:49
Paul.

Do you have any suggestions related to your last paragraph as to how the Board could decide to treat Everton unfairly?

Surely every action is covered by a written explanation that would go to all clubs? Are you suggesting that the Premier League Board is acting on its own?

Oliver Molloy
68 Posted 13/02/2024 at 22:40:25
The real owner of Everton is Usmanov and it was his money that funded the club and the new stadium – that's why we hear fuck all from Moshiri who was and is only a frontman.

No proof from me, just a hunch with all the stuff I've read. Since the sanctions against Russian oligarchs, the finances have just dried up. Usmanov, I believe was the main man – pretty obvious for me. The government of the UK wanted pressure on the Premier League.

Eric Myles
69 Posted 14/02/2024 at 01:18:09
David #66,

I'm sure Jay was referring to preferential treatment by Moshiri, not the Premier League.

Christine Foster
70 Posted 14/02/2024 at 07:59:09
Oliver, we may never know the truth but, as I have asked before, where is the backing for 777 Partners coming from and why is Moshiri persisting with them?

As I also said before, men with real money hide it well and fund what and where they want. Hands off, third party and tax havens... BVI.

Rights & Media Funding gets its money to loan from where?

I suspect this is the question the Premier League has asked for proof on, and got none... as we drag on, 777 Partners can't or won't satisfy the criteria.

Paul Hewitt
71 Posted 14/02/2024 at 09:20:15
I would think the only reason Moshiri is persisting with 777 Partners, is because it's the only bid he's had. All this "other bidders waiting" is laughable really.

If I found a house I wanted but someone else had bid for it. I wouldn't wait around to see if that bid was accepted – I'd counter-offer.

John Keating
72 Posted 14/02/2024 at 09:26:26
We all know where there's money there's corruption and dirty dealing. Doesn't matter which country, currency or person – they're all at it. Even with sanctions, the Russians are still exporting to the West. Nothing would surprise me.

The war in Ukraine won't last forever, sanctions against companies and individuals will end, too much money involved.

I wouldn't be surprised if Moshiri and his best mate Usmanov are somewhere in the background. They have too much money already spent and possibly to earn.

Iain Latchford
73 Posted 14/02/2024 at 10:00:56
Paul, 71.

Not necessarily. If a house was in danger of being repossessed, and I had information that the only bid on it was likely to fall through, I'd bide my time. When that happened, the owner would be even more desperate to sell and likely to take an even lower offer.

Mark Taylor
74 Posted 14/02/2024 at 10:31:49
In the current environment, the £750M debt that exists to fund the stadium build, financed at an 8% interest rate (optimistic in my view given the substantial risk), would cost ~ £60M per year to service.

Deloitte claim the stadium increases match day revenue from £20M to £55M each season. That increase is little more than half the interest costs and in my view, looks optimistic given the capacity is not going up by that much and it is not clear what season ticket prices would need to increase by, and whether price resistance in a cost-of-living crisis may be an issue.

This supports my view that the club is worth, at most, £500M, especially bearing in mind that the stadium and its build cost has precious little value unless tied to a profitable Premier League club as the anchor tenant. And therein lies the risk that would make even 8% financing costs probably over optimistic.

Hence existing investors need to take a very big bath for this to be viable. Value has not been created by the construction, any more than it was by the splurge on players.

Paul [The Esk]
75 Posted 14/02/2024 at 11:02:28
Christine (70) - 777 Partners have made extensive use of 777 Re's balance sheet to fund their loss-making partnership, their acquisitions and provide working capital to those loss-making businesses. I've covered this in several articles:

Everton, reinsurance and Bermuda, how are they connected?

In addition, 777 have tapped a US insurer and relatted re-insurer called Haymarket for additional funding – the majority of the funding for the loans provided by 777 in recent months has come from these companies. These companies are controlled by a gentleman called Kenneth King who has close associations with the 777 partnership.

There is increased regulatory concern globally, and specifically in the US and its main offshore reinsurance centre, Bermuda, of the use of insurance company balance sheets to fund portfolio acquisitions by private equity companies who acquire either the insurer or the investment management company as a means of accessing their capital.

I am pretty certain that this source of funding, aside from 777's track record more generally, is a significant issue for the Premier League and its approval process.

Christine Foster
76 Posted 14/02/2024 at 12:02:38
Paul, that's exactly what I meant, but who specifically provides funds and the vehicle it takes is, as you also point out, almost certainly why the Premier League have issues.

In fact, if 777 Partners get permission for the takeover, the Premier League must have had cast-iron assurances, something I believe is nigh on impossible for 777 Partners.

Conversely, if permission is granted, should Everton (777 Partners) ever default or fall foul of rules, it will come back and bite the Premier League in the backside.

If permission is granted I believe it would be totally detrimental to the club.

End game. How is there a way out of this? How can anyone come in and sort it? Exactly what is needed to secure our future? Or are we left with, in my opinion, the two most viable solutions:

1. Moshiri doesn't sell to anyone, refinances considerably and waits until the stadium is commissioned and stabilized; or...

2. We end up in administration, relegated, no stadium – only a lease, but no assets either – fire sale or new owner does a deal with the administrator.

Or is there a third option?

Mark Taylor
77 Posted 14/02/2024 at 12:47:57
Christine,

Although I am no land and property expert, the more I think about it, the more implausible it seems that the stadium could realistically be sold seperate to the club. The two are intertwined. Without a profitable Premier League club, the stadium is a white elephant, not even worth £500M.

I think we recall Moshiri's reference to an 'existential threat' and this is it. I'd be interested in Paul's opinion but I believe we are technically insolvent.

David Cooper
78 Posted 14/02/2024 at 18:44:25
Keith Wyness on Football Insider said he reckons 777 Partners have loaned Everton between £160 to 190M so far.

If 777 Partners were to become owners and the estimated cost of the club plus stadium that Moshiri wants is £750M, would he get that minus the loan and so be out of pocket to the tune of £200M?

Christine Foster
79 Posted 15/02/2024 at 01:29:27
I am truly and utterly sick of this. The more you read and filter through the crap that is spouted by media, the Premier League, and everyone who has an opinion and knows nothing, you will finally get the point that this is a complete and utter charade. It's an obscene take on the incompetence of management of Everton FC.

Don't get me wrong:

1) Our board would / should have had a complete and daily understanding of their true financial position at every point of their breach. If they did and had the Premier League okayed the situation, then the independent commission is invalid. Irrespective of the situation or financial position, if the club had the Premier League on board, then failure to accept the results is neither fair or reasonable.

2) There is no point in reviewing what was allowed for or not, if it was agreed and okay given, then the Premier League as much as the club are at fault. Determination of such after-agreement is not culpability as an acceptance of a situation.

3) There was an interesting discussion on Toffee TV yesterday regarding the fact that, if we had not been building the stadium, we would not have been in breach of PSR. In any year. Money used for the building, administration and funding for the stadium came off our balance sheet.

4) There is a fallacy that we kept on spending on players and transfers (which the Premier League stated as a reason) when the truth is we had almost the lowest net spend in the Premier League for the 3 years. It is why we are where we are today. It is spouted by media, even on these pages.

There is a reason we are where we are.

The Premier League needed a patsy for its fight against the appointment of an independent regulator. We are it. Without doubt. It's corrupt in that it shows bias, intent, vindictiveness and is done not to protect any club, but in this case to use as an example.

We may have made a rod for our own back, but we stupidly trusted Masters and Co who have used it to demonstrate something they are not, with their lack of honesty, transparency, fairness.

We may be naive but our situation has been taken advantage of for the benefit of others.

Christine Foster
80 Posted 15/02/2024 at 01:48:24
Mark @77,

Assuming there is no sheikh on the horizon, the only way forward that has a degree of sense is in the stadium being sold off and re-leased back to the club. It is a separate company within the Everton FC group and can be sold. Its monies go back to the group accounts.

That in itself is only part of the solution. Long-term consolidation of all remaining debts (or owner purchase) would be the next objective, thereby reducing expenditure in loan repayments. However, unless a new owner has a business plan to greatly increase our turnover, we are unlikely to be out of the mire for a number of years.

Administration would see all assets sold off and any liens on the company assets such as the stadium means that the big and nasty offshore loans (R&MF) would likely get all their money back leaving smaller unprotected creditors with nothing.

But hey, what do I know? I just have many years as an executive seeing this happen to companies!

Much has been said on implications for the club, but nothing has been said on solutions. How we get out of this mess, because if we don't we will end up with nothing. We can shout about injustice, and so we should, but we still have to find a way forward out of this mess and that is what we need.

Simon Jones
81 Posted 15/02/2024 at 10:27:35
Christine, you have echoed my sentiments from an earlier post. Other than the club and fans all hanging around, waiting for a state-backed investment group, or a clone of Jim Ratcliffe to pitch up on a white horse, what are the alternatives? The takeover by 777 Partners seems increasingly unlikely, unless they somehow pull a rabbit out of the hat.

We are a club with a £180M annual turnover and a £1B debt that only seems set to grow. Separating the stadium debt from the club debt makes sense if that puts the club on a better footing. Sales of Onana and Branthwaite seem inevitable and could be used to reduce club debt... but...

All the current problems only get worse while the club is stuck in stasis. Who is making strategic decisions? The longer this goes on, the more administration seems likely… and then what?

Christine Foster
82 Posted 15/02/2024 at 11:41:13
All this about how we have broken rules spending too much on players.. Context. It's just been reported by the BBC that Man Utd's squad up to 2023 cost around £1.2B, while Chelsea was over a £1B plus this summers spend of £850M, with Man City the same.

And we aren't even on the radar...

Except all hell descends on us because we are allegedly a disputed £19.5M over, over 3 years.

Tell me again, the rules are the same for all of us.. Context again, that alleged breach would not pay the wages of a single Man City substitute player.

Context... and no one sees the irony, no one understands the corruption... it's all above board for the few.

Clive Rogers
83 Posted 15/02/2024 at 11:43:42
Can’t help but think that if the stadium is sold off then it has all been a waste of time and we may as well have remained at Goodison. The new stadium was our ticket to prosperity, long term, but probably not if it is leased.
Barry Lightfoot
84 Posted 15/02/2024 at 11:58:27
I was under the impression that the under the terms of the lease from Peel that the stadium has to remain under the ownership of EFC.
Paul Hewitt
85 Posted 15/02/2024 at 12:13:32
Barry @84.

By 'lease', do you mean the land the ground is built on? Because I'm sure the club actually did buy the land.

Brent Stephens
86 Posted 15/02/2024 at 12:33:09
Paul #85 - it's a lease.

Link

Raymond Fox
87 Posted 15/02/2024 at 12:46:50
Who knows what will happen with the finances, Usmanov would have been the answer before the war in Ukraine happened.

Usmanovs history would have not concerned me unduly, theres far worse happenings in the world.

If we are to survive in a proper manner we now need a buyer with more money than Moshiri. 777 are no use to us.

I'm confident that we will still be in the Premership next season if its just down to Dyche and the players, but what sort of team will be pulling on the blue shirt next season?

We are staggering from one crisis to another because 2 or 3 of our best player are very likely to be sold at the end of this season to service our debts, further weakening the squad.

Paul Hewitt
88 Posted 15/02/2024 at 13:27:45
777 Partners seem confident a deal to buy the club will be finalised this week.
Mark Taylor
89 Posted 15/02/2024 at 13:45:22
Christine @80,

Yes of course, in an administration, the stadium could be sold off separately. My point was whether that would represent the best recovery for creditors, which is, after all, the duty of the administrator.

I may be wrong but I'm not convinced the stadium sell-off alone would raise all that much. Bear in mind its financial viability will depend on the ability of the club to pay a rent that gives investors an acceptable rate of return, taking into account the risks (which are high and third-party related). In other words, the value of the asset is contingent on the ongoing presence of the club in the Premier League. A Championship club would likely be unable to pay enough rent. That is a lot of external risk.

I appreciate I'm only bandying figures around at this stage but I said earlier the value of the club right now is at best £500M. In other words, Moshiri has actually managed to subtract significant value.

Granted we've been unlucky, it could not be a worse time to embark on a major infrastructure project, compounded by the mistake of not having long-term funding already in place. But what's done is done.

Would a break-up yield more or less than that? My honest opinion is less. Probably quite a bit less. The club without a stadium, in its current pitiful state, is arguably near worthless… and the stadium separate to the club is worth, what, a couple of hundred million? Only more if it could easily be re-purposed and I'm not sure it can be.

My contention, from the administrator's point of view, is that in our case,1 plus 1 equals 3. Anyone buying the stadium would be wise to include the club.

Rennie Smith
90 Posted 15/02/2024 at 13:59:38
Agree, Christine #82, that it's a complete mockery of the Premier League that Man Utd, Man City and Chelsea are numbers 1, 2 and 3 in the whole of Europe in terms of transfer cost of their squads, each one over €1 billion, and yet we get the kick in the bollocks for spending less than 2% of what they've spent.

I suppose that's what you get for being a "small" club

Simon Jones
91 Posted 15/02/2024 at 14:32:48
Mark #89,

You are basically writing similar to what happened with Coventry City. They moved to a new stadium (which from memory they were renting) and when the club was relegated, could no longer afford the agreed rent.

A very expensive new stadium requires an anchor tenant. Where Bramley-Moore Dock is geographically located, that tenant is Everton and Everton alone. The stadium has greater value to Everton than anyone else; however, the debt attached to its building would seem to be of great risk, whether through the points deduction or the ongoing debt.

Ed Prytherch
92 Posted 15/02/2024 at 15:12:15
My guess is that Man City and Chelsea did not fund their player transfers with high-interest loans but we did.

If Moshiri had continued to pour interest-free money into Everton, then we would not be in trouble. It is loan interest payments that are killing us.

Look at the cost of transfer activity and wages since Moshiri arrived and not just the last 3 years and the problem is apparent.

Danny Baily
93 Posted 16/02/2024 at 07:30:46
Is today the day?
Mark Taylor
94 Posted 16/02/2024 at 08:07:46
Simon @91,

Yes that's it in a nutshell.

Danny Baily
95 Posted 16/02/2024 at 22:39:41
The Premier League are leaving it a bit late here.
Ian Jones
96 Posted 16/02/2024 at 23:20:22
Danny,

I think someone mentioned elsewhere that the Premier League would probably release news of the appeal at about 5 pm on a Friday so that there was no chance for anyone to contact the Premier League as they had probably finished for the day.

Then someone pointed out that the Premier League and Sky Sports would be well aware of our match against Crystal Palace on Monday and, with it being televised, the chances of Everton supporters making their feelings known, whether the appeal had gone in our favour or not, would be high.

I imagine it'll be Tuesday before we hear anything.

Mike Dolan
97 Posted 19/02/2024 at 15:30:41
Could it be that a chunk of the 777 Partners funding is heavily laundered from an oligarch called Usmanov who never leaves money on the field?

Jay Harris
98 Posted 19/02/2024 at 15:49:03
Mike,

I have had those thoughts too but also that Usmanov may be pissed off at his treatment and is determined to get 777 Partners involved so that is his way of revenge.


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