The men behind the latest takeover proposal

23/12/2015  20 Comments  [Jump to last]

What promised to be a quiet period in the run-up to Christmas and the Boxing Day trip to Newcastle has been lit up by the news that an American-led investment group has signed a head of terms agreement with Everton for a ~200m takeover and has begun a six-week examination of the club's finances.

John Jay Moores and long-time business partner Charles Noell are the two heading up a consortium that Times journalist Rory Smith reports could involve other investors from this side of the Atlantic. While they are not in the league of the uber-rich like Sheikh Mansour or Roman Abramovich, they are considerably wealthy businessmen who probably boast a combined net worth of $2bn.

Having seen numerous takeover stories evaporate almost as quickly as they surfaced, Evertonians are, of course, treating the news with scepticism but these discussions appear have progressed further than most and Smith is a respected reporter citing sources from outside of the club. It is worth providing some background to the two men who are believed to be behind the bid.

John Jay Moores

Moores (what are the chances?) first made his fortune after founding BMC Software in his home state of Texas in 1980, a company he would eventually take public after taking the form to 200m of sales in its first decade.

He was also the lead financier of California-based software outfit Peregrine Software in 1981 where he served as a director and then Chairman of the Board at various times between 1990 and 2003, eventually cashing out up to $630m in stock before resigning in controversial circumstances before the company went through bankruptcy reorganisation. The SEC launched an investigation at Peregrine but while directors at the firm were convicted of financial fraud to inflate the company's stock price, insufficient evidence was uncovered to prove that Moores was aware of their actions.

In 1992, meanwhile, he had provided partner funding for venture capital firm JMI Equity that was founded by Charlie Noell and Harry Gruner and then led the buyout of baseball franchise, the San Diego Padres in 1994 for $80m, coincidentally from Liverpool FC's current owner, Tom Werner who is now in control of the Boston Red Sox.

Moores is credited with transforming the Padres from a struggling Major League Baseball team to one that would win the National League in 1998 and, unsuccessfully, contest the World Series that year against the New York Yankees. He oversaw the team's move from its groundsharing arrangement at Qualcomm Park with the San Diego Chargers NFL club to PETCO Park, a purpose-built stadium near that city's famed Gaslamp District.

Despite the wider regeneration of the surrounding area that accompanied the stadium development, Moores' initiative was not without its critics given that much of the project was funded by taxpayer money and his departure from the Padres was even more controversial. Moores initially put the sale of the franchise in motion in 2009 with a price of around $540m but, after negotiating a bumper new television contract, he eventually sold for around $800m, pocketing around $200m from the deal.

No wrongdoing was cited by MLB commissioner Bud Selig but the deal left a sour taste in the mouths of Padres fans who felt that the money should have stayed with the club. They were also critical of the fact that little was invested in the team in the early 2000s as it reverted to being also-rans in the National League West.

That reputation as a hard-nosed businessman is tempered, however, by his philanthropy Moores has contributed tens of millions of dollars to the likes of his alma mater, the University of Houston, the cancer centre he founded at University of California San Diego with his ex-wife, Rebecca, San Diego Zoo, and the National Multiple Sclerosis Society among others.

Since leaving the baseball world, a move that he admitted was an emotional wrench, Moores has returned to Texas and has largely been focused on continued investments with JMI Equity, JMI Services (the actual vehicle reputed to be behind the bid for Everton) and his increasing involvement with Noell in thoroughbred horses.

Charles Noell

A graduate of Harvard Business School, Noell co-founded JMI Equity with funding from John Jay Moores in 1992 and was a partner in the takeover of the San Diego Padres two years later, where he would serve as Vice Chairman.

In addition to those two ventures, Noell and Moores also co-founded Merreibelle Stable which owns and operates horse-racing farms in Maryland and Kentucky in the US and in Ireland, with Noell recently paying 5 million for a mansion on the Ardbraccan estate in Navan in Co, Meath.

Charlie has been president of Moores' family investment company since 1991 and is based in Baltimore.

Swansea City Investment Proposal

12 months ago, Moores and Noell were in talks with Swansea regarding the purchase of a 33% stake in the South Wales club. Ultimately, while negotiations with Chairman Huw Jenkins initially progressed well, the deal didn't come to fruition because of reluctance among the Swans' fans trust which owns 24% of the club.

They were sceptical of handing a dominant shareholding over to foreign owners and Swansea supporter sites are littered with posts raising concerns with Moores' dealings at Peregrine and the San Diego Padres in particular.

 

Reader Comments (20)

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James Flynn
1 Posted 23/12/2015 at 22:33:02
Well, you win some, you lose some.

It's the Peregrine business made me nervous. How do you cash out at an enormous profit, just before a bankruptcy, people involved go to prison, and you just have to pay the government a small fine?

The luck of a Winner, perhaps? We could use one.

Colin Leckey
2 Posted 23/12/2015 at 22:41:00
Let's hope they can be as successful as all those other US owners – the Glazers at Man Utd, Hicks and Gillett at Liverpool, Lerner at Villa, Khan at Fulham... Oh.
David Barks
3 Posted 23/12/2015 at 23:04:45
Colin,

Don't think the Glazers have had any problem with Manchester United. Won the league, won other trophies, massively building on the brand around the world. The only issue they really have had is SAF leaving a shell of a squad with no youth players coming through, but that didn't stop them from spending over £209 million this summer to try to build up their team. How about the American running Arsenal? Sitting in prime position to win the league this season.

And as for the Americans running Liverpool now, it's not Hicks and Gillette and they took on a club that wasn't doing much. Since then they've brought in one of the highest regarded managers in the world, sadly, who I would expect will have them improving drastically. And they're moving forward with a massive stadium expansion.

So what nationality owner would you want? A Russian as if that would guarantee the success Chelsea has had and ignore the failings of other clubs? An Arab like Man City but ignore the failings of other clubs? An English owner who has overseen the league triumphs like.... wait a minute, who would that be exactly? Unless you're talking Man Utd or Chelsea, who exactly has been winning the Premier League?

Liam Reilly
6 Posted 24/12/2015 at 10:30:38
Seems to be a lot of supporters on here who think we should only work with 'Nice' people.These guys are no doubt here to milk the cash cow of the PL and CL and not for the primary purpose of returning the club to its Glory Days.

Failure to reach the CL gravy train will ultimately mean asset stripping (of players, as that's all we have left) to satisfy investor lust; but the attempt to get there has got to be better than dying the slow death that we've been witnessing for the last 20 years.

Brent Stephens
7 Posted 24/12/2015 at 10:59:29
Agree, Liam. Just posted on the other thread about Bill and his mates allegedly being in it for the money, and these guys will be no different.
Paul Andrews
8 Posted 24/12/2015 at 11:08:20
Brent,
Both parties – Bill and the proposed buyers – are "in it for the money".

Only one party has told us repeatedly until our ears are bleeding that they are not in it for the money. "Just for the good of the club" goes the phrase.

Jay Harris
9 Posted 24/12/2015 at 16:14:53
Brent, I think they will be different in the sense that Bill just wanted to show up for the games with Jon Woods and bask in the limelight while other directors were totally disinterested.

This lot are in it for the money but will have a strategy and be on the backs of the likes of Elstone and marketing people to bring that plan home.

They will also have much more clout than Bill so expect some new sponsorship deals which are not tuppence ha'penny.

Like every change there will be risk and I don't see them as long term but I think we need to wait and see what their plans are and even whether they complete the deal which is very complicated and has put previous potential buyers off.

Dennis Ng
10 Posted 24/12/2015 at 16:25:29
I disagree with the asset stripping part. That might work for corporate but how do you sell a football club after stripping the assets?

Besides, do we have that much non-playing hard assets left? What's so bad in the deal that we can't swallow this when we're in our current state?

Clive Rogers
11 Posted 24/12/2015 at 21:22:36
Dennis, Kenwright has stripped every single asset and is now selling for 10 times the buying price.
Dave Abrahams
12 Posted 24/12/2015 at 21:31:00
Well said Clive, very obvious to most of us on here who have read the details of Kenwright's time in charge of Everton. The Devil looks after his own.
Brent Stephens
13 Posted 24/12/2015 at 22:07:04
Paul, Jay. Regardless of what Bill says, he was in it for the money. And regardless of the new guys having perhaps a better strategy, they will be in it for the money. I'm saying nothing more than that and I think you'll both agree. Paul, surely you never believed Bill etc when they said they weren't in it for the money! Jay, surely you don't believe the new lot are in it for anything other than the dosh!
Ian Smitham
14 Posted 24/12/2015 at 23:13:20
Asset stripping. Anyone care to help me understand what that is and then go on further to help me understand the value of the assets of the Company now?

Finally, as a supporter, I would rather have the Business's assets as the characters on the pitch rather than elsewhere.

I also wonder if the way that assets have been sold to finance the ongoing development and financing of the playing assets is actually good business? It seems to me that using any possible sale or mortgaging of assets is a great idea if it allows for example the Business to buy a John Stones for the price they did and then sell him for the price he will inevitably achieve in the summer.

Or, for example, selling the outdated previous training ground to help finance the development of the younger players for example , say, Ross, while taking on new rented accommodation that does not tie up much needed and scarce capital .

Just to finish off, when we are talking about assets, and the asset stripping, this practice is where assets are divested from a Company and the owners take the benefits, aside from my own nagging suspicion that sale proceeds are being used to help pay for overpriced lending , there is no evidence.

Look at the reality, the assets of the business are completely understated, within Accounting rules, and any sale price will appear unrealistic unless we are privy to the actual valuations that are placed on the players, all of whom are insured both as assets and against the Businesses liability to pay them when they are injured.

IMHO, cheers, Ian

Eric Myles
15 Posted 25/12/2015 at 06:37:13
Ian, we haven't sold off tangible assets to invest in players, the Bellefield money went to the bank, as did the Arteta money.

We have only financed player purchases from the sale of other players.

John Crawley
16 Posted 25/12/2015 at 09:02:40
I'd be shocked if it wasn't a leveraged buy out with all that entails. It will be a good deal for the shareholders but not for the club. The other Americans from the summer would have been better owners but they didn't want to pay Bills asking price. Unfortunately unlike the Swansea supporters we've got no say in this because the vast majority of supporters have sat back and swallowed Bill's bullshit.
Jim Hardin
18 Posted 25/12/2015 at 19:16:05
The real question might be if the new owners decide to build a new stadium but also decide to do it elsewhere after purchasing Everton. Maybe they would consider moving it to London or thereabouts. I understand the FA would have to approve but seems money can buy a lot of goodwill amongst them right?
Andy Finigan
19 Posted 25/12/2015 at 20:09:14
Come on, Jim, do you think that they would prefer to see a 60,000 seater stadium in London with a few thousand in it?
James Flynn
20 Posted 25/12/2015 at 20:57:09
Jim (15) - One American to another, I see where you're going there. But, I'm certain up and moving sport clubs around the country is different in England than here.

If this group does buy the Club, I'm in the "regenerate Goodison" side.

Colin Glassar
21 Posted 25/12/2015 at 22:18:56
Jim this is Everton FC not a bloody burger king franchise!! There's not a snowball's chance in hell that a top football club in England would be allowed to do such a dastardly deed sir.

By the way, it's not just the FA but the other prem clubs who would have to approve such a diabolical, and very un-English, move.

Alan McGuffog
22 Posted 25/12/2015 at 23:05:12
Colin... Jim may be a little extreme but what he says has credibility. Were we not considering moving to another town not so long ago? Is not the only decentish team in Scotland desperate to join the EPL? Did not the leading Welsh team change it's colours on the whim of it's owner?

I love Everton and despise nearly everything that football has become over the past 20 years. We are playing football tomorrow, Boxing Day, in the northeast with little or no public transport. We have had our souls (no silly puns intended) stolen or sold. We may or may not win trophies but, rest assured, the franchises... burgers, soft drinks, piss poor lagers are the only winners.

Everton playing in the Dunkin Donuts Arena just off the M5? Unlikely I grant you but not, I believe, totally unthinkable.

Happy Christmas.

Colin Glassar
23 Posted 26/12/2015 at 08:41:40
Alan, just to answer a few of your points.

A) Kirkby is part of the Liverpool/Merseyside area
B) Any Scottish team (Celtic/Rangers) would remain in Scotland (Glasgow) even if they joined the EPL
C) Changing shirt colours, whilst unthinkable, is still not the same as upping sticks and moving us to some Home Counties ghetto to be supported by some 3000 wankers just cos it's in, or near, the bleeding capital.

And a happy Christmas to you as well.

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