Who are The Friedkin Group and what is the opportunity ahead for them and Everton?

The following article was written by Paul in June 2024 for his blog at theesk.org when The Friedkin Group first entered into a period of exclusivity with Farhad Moshiri's Blue Heaven Holdings

---

Who is Dan Friedkin?

Firstly, our prospective (but likely) new owner.

By all accounts, for a multi-billionaire at least, day to day, he’s a relatively low profile figure. Certainly if you bumped into him you might not recognize him as the owner of one of Toyota’s largest global distribution franchises, nor as one of the few civilians licensed to fly – only one of nine in the US (credit Nick Palmer) – alongside US Air Force Pilots in close format demonstrations. A genuine leather pilot helmet wearer rather than faux baseball cap owner.

As seems necessary to state with every football club owner, his wealth according to Forbes, puts him in the top 500 wealthiest of individuals globally with an estimated net worth of $6.4 billion. The source of his wealth is the Friedkin Group, whose website can be found here.

His main business is within the motor industry. Gulf States Toyota is now one of the largest private auto distributors in the world, delivering Toyota and Lexus vehicles and parts to about 150 dealerships in Arkansas, Louisiana, Mississippi, Oklahoma as well as Texas, including Houston’s Northside and Westside Lexus.

The Friedkin Group, the parent company of Gulf States Co., has branched out and grown over the decades. It is now a consortium of more than a dozen companies, involved in sports, travel and entertainment as well as autos. Some of its notable acquisitions are as follows: in 2012, the Friedkin Group acquired North Carolina’s Diamond Creek golf course; in 2013, it acquired the Auberge Resorts Collection; in 2020, the group acquired AS Roma, the Italian football club (more to follow below).

In addition, Dan Friedkin has built a burgeoning portfolio in Hollywood. In 2014, he co-founded Imperative Entertainment, the studio that produced the 2023 Martin Scorcese epic “Killers of the Flower Moon.” He is also, like his father, a stunt flyer and founded the nonprofit Air Force Heritage Flight Foundation and piloted a Spitfire plane in Christopher Nolan’s 2017 film “Dunkirk.”

Along with his wife Debra, Friedkin has also supported a number of conservation, ecological and archaeological initiatives over the years, most notably in Tanzania, where the family has been working to protect wildlife since the 1980s, and in Texas, where he has served as the chairman of the Texas Parks and Wildlife Department.

So all in all, a highly impressive C.V., an untarnished reputation and a guy with knowledge of all the sectors that would appear on any supporters’ wish list of would-be owners – sports operations, consumer retailing and the media/creative arts sectors.

Of greatest relevance is perhaps, his acquisition of AS Roma, from fellow American Jim Pallotta. Pallotta, along with Thomas Di Benedetto, Michael Ruane and Richard D’Amore owned AS Roma for a decade, from 2010 through to its sale in 2020 to Friedkin. A failure to win trophies, over €500 million of player trading profits combined with mounting losses and debts caused huge unrest at the club, and Friedkin bought into an extremely difficult situation.  The challenges of creating a new board, overcoming frustrated (but still passionate) fans, creating success on the field whilst sorting out finances and stadium issues will be a useful learning experience for what he and his group are taking on at Everton – the major difference being the near completion of the stadium. However the issues of local infrastructure and particularly transport links will again be familiar. As he will know, building and funding a new stadium in isolation is only part of the solution. Thankfully, in the case of Everton his issues will be significantly less than those he faced and faces at Rome.

Exclusivity to purchase Everton

With the news breaking this Thursday evening (UK time) that Friedkin has been granted exclusivity, the impact on Everton is immediate and significant. The conditions applied to exclusivity included the repayment of the MSP/Downing/Bell loan and the immediate funding of the latest Laing O’Rourke payments.

Until approval from the Premier League is granted, it is in effect a transfer of one loan provider to another, albeit one assumes on better terms until the Premier  League approves their ownership.

Any analysis of the Friedkin Group, and of Dan Friedkin would indicate approval is not an issue. Any additional due diligence by Friedkin remains the most significant barrier in my opinion. There are potential issues, not in the public domain and which are the subject of much legal debate that still face any prospective buyer. Those potential issues relate to the current ownership, the precise details of the shareholder loans and potentially the most recent 777 loans (now controlled by A-Cap). I stress that each are potential legal issues, not definitive, but will need to be resolved in the due diligence process.

Assuming that those concerns are assuaged, and the Friedkin Group acquire Moshiri’s shares, then as with their acquisition of Roma, the real work begins.

The list of Everton’s priorities are well articulated but include repairing the balance sheet, recruiting a new board and executive team, re-engineering our commercial operations, managing the stadium transition, creating a genuine football strategy and managing existing footballing management and player resources.

A not insignificant in-tray for any incoming owner and his own management team.

Financially, the new ownership will provide the following – refinancing the existing debt. What does that mean? Through a combination of equity (ie permanent capital) and lower cost long term debt, repaying existing creditors including Rights and Media Funding and the 777/A-cap loan.

As with Tottenham and Arsenal the debt element will be secured against the stadium and will be long term, although I suspect the option to refinance in a lower interest rate environment will be written in – look at how Arsenal refinanced their stadium loans. I suspect this senior debt package will total around £350 million.

The additional capital required is likely to be in the region of £400- 450 million  – that repays the remaining debt not covered above, the final elements of the stadium costs, working capital to fund current operational losses and reinvestment in the playing squad.

A time to reflect

In no sense are we out of the woods. We have a huge battle ahead to stabilise and create a platform from which to grow. The evidence suggests that Dan Friedkin has the skills and team around him to do that. The bigger issue is not only to survive, but to compete, then challenge, then win silverware once more. That has to be the message to Dan Friedkin and whomever he brings in to manage our wonderful club.

In terms of reflection, and this seems like a watershed moment – we have seen off Moshiri, albeit at significant cost; we have exposed Moshiri’s initial choice, 777 Partners as unsuitable partners albeit at additional cost and ultimately we see a well resourced group, credible business business owners with the necessary experience to fulfil the corporate recovery challenge that Everton currently present.

The next challenge is for Friedkin not only to effect recovery, but to exploit the opportunity he is buying into, the club, the stadium, the fans, the City of Liverpool and turn us once more into a leading, successful light in English football and then beyond. Football is changing, the Premier League is no longer the be all and end all for the largest English football clubs – we need to board that future train as quickly as we can. Firstly, we need stability, then progress and then we can possibly re-join the elite.

It’s a huge task but that is both the challenge and the privilege Dan Friedkin is buying into. If. as I am sure he will, recognises this, he will get support like no other.

This is a defining moment – let’s hope he (Dan Friedkin) and us the fans participate equally in delivering the future we (the fans) all want.

---

Reader Comments (11)

Note: the following content is not moderated or vetted by the site owners at the time of submission. Comments are the responsibility of the poster. Disclaimer ()

---

How to get rid of these ads and support TW

---