Tuesday 27 February 2024 will mark the 8th anniversary of Farhad Moshiri’s initial purchase of a 49.9% stake in Everton Football Club. It is unlikely to be an anniversary featuring many celebrations. Whilst a brand new stadium moves towards its anticipated completion by December 2024, almost everything else about Everton Football Club lays bare, a hollow, gutted-out shell of a once great sporting institution.

The dedication, loyalty and unbridled passion of the fan base locally, nationally and internationally aside, and perhaps the determination of the players and coaching staff, very little else appears to have merit, relevance or any connection with the affairs of a modern professional sporting organisation, particularly one with such a lengthy (and from time to time successful) tenure in the world’s richest domestic footballing league.

I want to explore Moshiri’s role not only in where we are now but how he can enable a solution

It has become popular, and with the support of the football club, to deride the Premier League and to represent its appalling management and governance as the root cause of our ills. Let me be clear, I am in no way advocating for the Premier League. In no way am I advocating for how they’ve allowed our beautiful game to be stolen by State enterprises, by filthy money from almost any source, how they have destroyed the competitive fairness and integrity of our great game. How they have clearly worked in the interest of a few monied and favoured clubs to the detriment of everyone else.

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Whilst all of the above is true regarding the Premier League, and the disadvantage it places clubs not in the top six, it is not the sole or indeed even the main reason for Everton’s demise. Everton’s decline in the last eight years is down to one man – Farhad Moshiri. On the face of it, it seems ridiculous, churlish even, to call out a man who has invested £750 million into Everton Football Club, making him one of the top half-dozen financial contributors in the English game. Yet, Everton’s position ultimately has been determined by Moshiri’s decision-making over the last eight years.

It started with his unfathomable loyalty to the now-deceased former Chairman, Bill Kenwright, and many of the executive team charged with running our club. Charged with making the strategic decisions to take advantage of Mosihiri’s generosity, and then having created the strategy, to execute it properly, they failed on both counts. Moshiri failed to recognise this and make the necessary changes at any point during his tenure. What changes that did occur were driven by external events and new career opportunities for individuals, not by Moshiri taking a professional approach to executive and board recruitment.

The same could be said for his recruitment strategy (I say that very loosely) on the footballing side. The collection of managerial selections, director of football appointments, player recruitment (often aided and abetted by agents driven by their own self-interest, not that of Everton) could hardly have been worse. Vast sums of money wasted on recruitment – not to say the provision of some of the most ludicrous player contracts ever offered in the game. The best of the talent simply have left the club, either due to our financial condition or to maintain each player’s career path. Coupled with a rapidly declining academy in competitive terms and it is easy to see how Everton’s problems have mounted over the last eight years.

The current situation

All of which brings us to where we are today. Struggling massively on and off the pitch. Financially hamstrung and with a barely serviceable Premier League squad. Over-riding all of this, two concurrent black swan events – the proposed 777 Partners takeover, and the two PSR rule breaches. Two events which are paralysing the club despite the efforts of Dyche, the players, and particularly the supporters to battle against such strong headwinds.

Both major events are not in anyway being assisted by the Premier League – for clarity, I want to be absolutely clear on this. The Premier League’s systems have been tested to the extreme and both the approval process for new owners and particularly the disciplinary processes for dealing with an accusation of a breach of rules are shown to be hopelessly inadequate and a terrible reflection on the governance and leadership of the Premier League.

More than that, the whole structure of having a member-owned organisation that is simultaneously, promoter, commercial operator, regulator, judge and jury – rule maker, the prosecutor, the jury and judiciary all at the same time shown to be utterly not fit for purpose.

None of which absolves Everton’s and particularly Moshiri’s role in our misfortune. It mitigates it, certainly, but doesn’t absolve us.

Moshiri’s role

It is Moshiri’s decision-making that has led us to the alleged breaches of Profitability and Sustainability Rules. It was the club’s defence strategy (driven by Moshiri (there is no board) and his advisors (sic) that failed to adequately defend or even mitigate against the commission’s decision and sanctions. Time will tell whether a new approach driven by Laurence Rabinowitz KC will significantly change matters in the appeal, and one would imagine, in the second case.

Regardless, the impact of the current 10-point penalty and the resulting uncertainty has materially affected Everton’s season – regardless of the result of the appeal. Additionally and subsequently, the second charge and its outcome will play a part in how the players and manager see out the rest of the season, irrespective of the outcome.

All of the uncertainty arises ultimately from the behaviour of Everton Football Club under the direction and ownership of Farhad Moshiri – during the period to which the charges relate, and the club’s response to it.

The ownership issue

The second cause of Everton’s current paralysis is the issue of future ownership. I am not going to repeat all of the reasons for 777 Partners LLC to be deemed unsuitable owners – they are covered extensively in the media and in my case, here – Everton & 777 Partners.

From my, and most reasonable observer's perspective, there is no case for their suitability.

However, the choice of 777 Partners as prospective owners is down to one man – Farhad Moshiri. It is his decision, and his decision alone to sell his 94.1% stake in Everton to 777 Partners. It is his choice, his judgement that 777 Partners are the best option for Everton Football Club – despite the overwhelming evidence against such a choice.

Remember, he said “[777 Partners] are the best partners to take our great Club forward, with all the benefits of their multi-club investment model”. It was his choice to put forward an organisation that has failed to satisfy the Premier League as to their suitability despite five months of due diligence as part of the Owners' and Directors' Test (OADT).

As a result of his choice, Everton have reached a state of complete paralysis. Already heavily indebted, already with a heavily weakened squad, Everton had no option but to sit out the January transfer window, and much worse than that, rely upon funding from 777 Partners to remain a going concern. All whilst waiting for 777 Partners to provide the evidence which supports their acquisition of Everton. Failure to provide the evidence, means no approval – the Premier League doesn’t reject – it just doesn’t give approval.

Because of Everton’s dire financial circumstances, 777 Partners agreed to fund the club’s cashflow requirements during the period between mid-September and approval. That is now 5 months and counting and has grown to a debt of approximately £190 million, an amount which increases the financial insecurity surrounding Everton and has applied huge pressure to 777 Partners, themselves reliant upon the support of third-party debt providers.  In the extremely unlikely event of 777 approval, it would also have implications for Everton moving forwards.

What happens when Moshiri or 777 Partners accept they will not be approved?

Many have written that we must accept 777 Partners due to the threat of administration in the event of their removal as ownership candidates. Whilst the threat of administration is real, there are alternatives. Those alternatives require action by Farhad Moshiri.

They require him to give serious consideration to alternative bidders, and it requires him to do so immediately. There are alternatives out there, although none of the alternatives are solutions without considerable pain for Moshiri and other creditors (including 777 Partners). However for Moshiri, as an alternative to administration, these alternatives are more attractive.

Administration would occur when Everon no longer had the financial support of its shareholders, lenders and/or Laing O’Rourke – or indeed if the directors reasonably believed the club could not continue as a going concern. The directors (including Moshiri) have a legal responsibility for such.

In the event of administration, an administrator would be appointed and be paid (from the club’s resources) to best satisfy the club’s creditors. To satisfy the club’s creditors, they would seek to sell the business as a going concern to the highest bidder (who would have to go through the Premier League OADT). The successful bidder would seek to negotiate with the creditors as to who is paid and to what extent they are paid.

Everton have preferred and secured creditors. To my knowledge, we have no debt to HMRC so I have not included them in the following.

Secured creditors – these are creditors whose debt is secured against assets of the club. They include MSP Sports Capital who have security over the Everton Stadium Development Holding Company (which owns the stadium and the 200-year lease on Bramley-Moore Dock). MSP’s debt is £140 million.

Rights & Media Funding have provided Everton with a revolving credit facility now believed to be £225 million. This is secured by a fixed charge against Everton’s bank accounts (meaning security over all of Everton’s income) and a floating charge over all other assets of the club – including players, Goodison Park and other properties.

Metro Bank, owed approximately £20 million, has a first legal mortgage over all the club’s freehold properties.

777 Partners (currently owed £190 million (or thereabouts) have a subordinated security under the Rights & Media Funding arrangement. This means they are junior to Rights & Media Funding in a default situation

The football creditors rule means that all football-related debt (outstanding transfer fees, outstanding wage and bonus payments, agent fees etc) are next in terms of priority.

Then we have the unsecured creditors. This includes suppliers, security, police, and fans (season ticket holders/hospitality purchasers) etc.

Included in unsecured creditors would be Farhad Moshiri. His shareholder loan (£450 million) is an unsecured debt. He might choose to forego any repayment in a default/administration situation.

A company or individual buying Everton as a going concern would have to do one of two things. Either pay off all creditors or reach an agreement with creditors as to how much and over what period the debts would be paid. That might include the selling of assets to raise the cash to fund the creditors.

In Everton’s case, this would include the selling of the new stadium at Bramley-Moore Dock (and in doing so, paying off MSP) or the future sale of players in the next transfer window. A new purchaser of the club would also provide fresh capital which may be used to pay off creditors. This fresh capital could be permanent (ie, equity) or temporary (new debt) raised against the club or other assets the new owner may own. The new owner would look to significantly reduce Everton’s costs including refinancing debt at much lower rates.

Football-wise, it would mean Everton would almost certainly lose their sellable assets in the next window (Branthwaite, Pickford, Onana etc). It would also mean an immediate and automatic 9-point penalty (whilst in the Premier League).

A successful administration would not put Everton out of business. We would potentially lose ownership of the new stadium and certainly our best players plus face a much restricted budget going forwards – but we would not be out of business.

If the above was not possible, ie, a buyer not found or agreement not reached with creditors, then the worst of all options would occur – liquidation. That would mean the club ceases to exist and all assets are sold to repay creditors. It is the least likely option for one simple reason: without a top-level football club to play in, what value does the new stadium have?

A solution – requiring Moshiri’s co-operation

As much as Moshiri is responsible for the appalling circumstances we find ourselves in, he is also (assuming no one believes administration is the best option) the solution provider. He can solve the paralysis issue we have and provide a solution which does not necessitate administration.

What does he need to do?

In the first instance, accept that 777 Partners will not be able or allowed to purchase his shares. Accept that and remove them from the equation.

Secondly, he could convert his remaining shareholder loans into equity. He has done this before of course, converting £200 million of loans into equity. The effect is largely cosmetic, but it would improve the balance sheet marginally and demonstrate further commitment to Everton. It would not solve our cashflow crisis whilst we seek an alternative purchaser.

He could commit to funding the club for a number of months whilst a new purchaser goes through the OADT process with the Premier League. That might cost him another £75-100 million, but it would see the club to the end of the 2023-24 season and allow us to continue as a going concern.

The new owner can concurrently (i) seek approval from the Premier League; (ii) re-negotiate terms with existing creditors whilst providing a brand new financing package – long term, sustainable debt secured against future ticket sales at Bramley-Moore Dock (as well as the physical asset); and (iii) provide working capital over and beyond the amounts required for cash-flow purposes. Included in the package is a functioning board of experienced professionals well versed in corporate recovery, revenue expansion, and the running of professional sports organisations.

We are at a defining moment – a true watershed. Moshiri (as he has done for eight years) is the only one who can determine our fate. Do nothing, 777 Partners fail, and administration or possible liquidation results.

Take a positive view, commit further funding in the short term and allow the right investor to (i) recover the club and (ii) exploit the asset that is being developed in the new stadium. Moshiri’s reward for this might be a minor retained shareholding (although no future influence) but also the knowledge that his actions allowed the rescue of our club which is doomed to failure without his positive intervention.

He can provide the opportunity for others to deliver the solution. He needs to act now.


Reader Comments (74)

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Dennis Stevens
1 Posted 25/02/2024 at 15:04:12
Fingers crossed!
Clive Rogers
2 Posted 25/02/2024 at 15:10:09
Excellent article. If there is a suitable prospective buyer out there with funds to spare, that must be the better option for Moshiri.

Administration would be a disaster for both Moshiri and the club surely.

Brian Williams
3 Posted 25/02/2024 at 15:12:40
Paul. I remember you writing somewhere that we have nothing to worry about with the regard to the second charge.

Is that still the case?

Oliver Molloy
4 Posted 25/02/2024 at 15:24:18
I said the other day that I believe that Moshiri is just a front man for Usmanov, and it is reported that he wants his money back by whatever means.

What's your opinion on this Paul?

What's the betting the appeal decision will arrive on Tuesday 27 February!

Mike Owen
5 Posted 25/02/2024 at 15:43:03
Well, Moshiri did reveal at a club AGM that he had only anticipated a need to spend 5% of his time on Everton.

And, arguably from that, everything else has followed.

Paul, regards this sentence, I hadn't thought of it in these terms:

"All whilst waiting for 777 Partners to provide the evidence which supports their acquisition of Everton. Failure to provide the evidence, means no approval – the Premier League doesn't reject it just doesn't give approval."

So, lack of evidence that satisfies the Premier League can mean not just no approval, but also no rejection.

The question then is: How long could that go on?

All in all, it's difficult to see when Evertonian life might return to some form of normality.

Paul Tran
6 Posted 25/02/2024 at 15:48:35
Usual good informative stuff, Paul.

No businessman of any calibre would act the way Moshiri has. I can only think that this is some form of sportswashing/money laundering or he just thought his oligarch mate would bale him out. And likewise, Kenwright thought he could schmooze his way out of trouble with his Teary Bill act.

I'd love to know what makes Moshiri think 777 Partners are the best option for him, never mind the club.

Dave Lynch
7 Posted 25/02/2024 at 16:03:32
Maybe 777 Partners signed a takeover deal with Moshiri before the other parties became interested?

Mal van Schaick
8 Posted 25/02/2024 at 16:16:36
Good informative article, Paul.

I would go for your final option, and hope that 777 Partners fail. I do not think that our club should be sold out to dubious investors, and therefore Moshiri should park that takeover and support the club financially.

In the interim, he should find new committed owners who can see that the future prospects for Everton look good and rewarding as a business investment, in the medium term.

Moshiri should act now, and understand that he has a responsibility for the future prospects of Everton Football Club.

Jerome Shields
9 Posted 25/02/2024 at 16:36:28
Paul,

Under the Profit and Sustainability Rules, Moshiri had to provide a letter guaranteeing that he would cover any shortfall in funds in that season. I take it subsequent letters of guarantee have been provided for subsequent seasons? Though, with no AGM, we are not informed.

Where and when do they come into play?

Jerome Shields
10 Posted 25/02/2024 at 17:20:22
I suppose I might as well live up to my speculative reputation and state that 777 Partners will go bust before Everton do.
Dennis Stevens
11 Posted 25/02/2024 at 17:32:04
Is that because they'll never get back the money they've sunk into the Club, Jerome?
Geoff Cadman
12 Posted 25/02/2024 at 18:02:49
Paul,

When Liverpool were sold to FSG, I recall that a third party was appointed to handle the sale. I seem to remember that Hicks and Gillette had no say in the final decision. Am I correct, and if so, what was the reasoning behind it?

Paul Kossoff
13 Posted 25/02/2024 at 18:37:57
Does anyone else think as I do that 777 Partners are a cover for Usmanov, and it's him who is providing the funds for 777 to keep Everton afloat?

The current war between Russia and Ukraine can't last for ever and, when it ends, they will all be shaking hands, and all good friends, just itching to sign the multi-billion contracts which, after all, that's what the war is all about, money.

Usmanov will be welcomed back as a top billionaire investing in the UK. We will be legally owned by him and all will be rosey in the Bramley-Moore Dock garden.

Everton's situation seems very underhanded and just a little bit dodgy to be totally legal and above board.

Brian Williams
14 Posted 25/02/2024 at 18:48:55
In answer to your initial question Paul.

I doubt it!

Paul Kossoff
15 Posted 25/02/2024 at 18:53:34
Brian, this is Everton, nothing should be discounted but normality.
Kieran Kinsella
16 Posted 25/02/2024 at 19:03:34
Paul,

Seeing as he's had his yacht and various other assets seized, I highly doubt he'd risk injecting more cash into the UK knowing, if his scheme is uncovered, he will lose the lot.

Moreover, what's in it for him? He's not even an Everton director and he's hardly likely to make a profit on such an investment any time soon, especially once he's paid off all his intermediaries who are shielding his ownership stake.

If he had any interest, wouldn't it be easier to finagle some paperwork to make it look like his money has belonged to Moshiri all along?

Paul Kossoff
17 Posted 25/02/2024 at 19:09:10
Kieran, that's what I'm talking about, it's not normal with us so you can't discount anything.

The truth is, of course, that the mysterious governing body is us. We are the ones making these judgments for each other and for ourselves. Even if we stand firmly and claim, “No way, I'm not normal!”

We are viewing ourselves through a lens which sees everyone else around us as, in fact, normal. It's a false dichotomy. Things like sense of humor, gender, home ownership, or the appropriate firmness level of a banana, and the deduction of 10 points from us, after they were legally won, will forever be subjective to anyone who cares to question normality.

Bill Gall
18 Posted 25/02/2024 at 19:11:22
Paul, I don't believe you really understand how many countries intelligence departments are watching every move these friends of Putin are making,

Usmanov would be lucky to sell second-hand parts in a local market.

Paul Kossoff
19 Posted 25/02/2024 at 19:17:07
Bill, I disagree.

I've just bought a second-hand Aurus Senate from him in a very dark street off the Dock Road.

Also Bill, the so-called intelligence departments of all nations are the most currupt of all but answerable to no one.

Bill Gall
20 Posted 25/02/2024 at 19:45:04
Wow, what color did you get, Paul? I got the gold one in 2018 when they first came out, had to get it smuggled into Mongolia, no taxes then.
Steve Oshaugh
21 Posted 25/02/2024 at 19:59:39
The question for me is: Does Moshiri have the net worth to actually reinvest in the short term?

It is always difficult to get a true gauge on net worth but I would have thought that putting another £150M into Everton would be a sizeable percentage of what is left.

It seems to me he is going to take a sizeable haircut no matter what happens and hoping he makes any decision that would benefit Everton might be wishful thinking.

I imagine he is well and truly over EFC and thinks of Everton fans as nothing but ungrateful moaners and couldn't care less about the club's fate. The depth of that feeling might influence the size of the haircut he wants to take.

Jerome Shields
22 Posted 25/02/2024 at 20:08:45
Dennis #11

They were stretched before Everton was entered into the equation.

Michael Kenrick
23 Posted 25/02/2024 at 20:24:42
Paul,

Trying to piece together some things I've read or heard about the OADT, you make an interesting statement that 777 Partners (or specifically the persons put forward by them as new Directors and Owners) would not be rejected per se, but would just not be approved.

My cursory reading of Section F: The Owners' and Directors Test, lists a series of very specific conditions, which are either met or not met. These are meticulously laid out under the introductory text that reads:

A Person shall be disqualified from acting as a Director and no Club shall be permitted to have any Person acting as a Director of that Club if: …

Let's just say, for example, Messers Wander and Pasko, do not actually fail any of the provisions in Section F. So they go ahead and take ownership of the club, but without receiving the Premier League's formal approval. After all, if there's nothing that specifically disqualifies them under Section F, so what's to stop that happening?

Tony Abrahams
24 Posted 25/02/2024 at 20:30:50
A different scenario, Michael, but there was a very young kid who was allegedly trying to buy Morecombe, and although he was supposedly very rich, he just wasn't very cash rich, so he never passed the fit and proper ownership test, although he hadn't put any real money into Morecombe, at the time, unlike 777 Partners.
Jerome Shields
25 Posted 25/02/2024 at 20:37:07
Paul #13

I have always thought that a possibility. There are millions of pounds of property in London that HMRC cannot find the beneficial owner off. The same problem exists in the US.

Your suggested influence could explain the decisions that Moshiri has made and Paul has outlined as being a problem. It could also explain the path that Moshiri has taken and why he maybe unlikely to follow Paul's solution.

One thing that stands out in this discussion is that the valuation of the money is based on as we all know it. What if the money was gotten for nothing, what valuation has it to Moshiri and his so-called friends?

If they lose it, their attitude could be "So what!"

Paul Kossoff
26 Posted 25/02/2024 at 20:41:50
Bill, I think he sold me the one you bought off him. He said a bloke called Bill asked for a large discount, Usmanov said he told him to fuck off as he's given enough cash to Everton supporters as he's funded the new stadium, he sold it to me as having one very mean owner.😀
Michael Kenrick
27 Posted 25/02/2024 at 20:47:21
Tony, it may be a case of them writing new rules on the fly as it suits them to fit differing situations.

Actually this rule F.5.4 would seem to say the opposite of what Paul is saying above about rejection:

the Person shall not become a Director, and the Club may not permit them to do anything which brings them within the definition of Director, until the Club has received confirmation from the Board pursuant to Rule F.5.3, above, that the Person is not liable to be disqualified as a Director under the provisions of Rule F.1 or F.2.

So the club does indeed have to receive confirmation from the Premier League before Wander and Pasko can become Directors.

Tony Abrahams
28 Posted 25/02/2024 at 20:55:40
I'm sure this young kid helped Morecombe by helping them convert some real estate into money, Michael, but I think the league just kept shrugging their shoulders, and wouldn't let him get close to buying the club, until he could prove he was in a position to both buy and then sustain the club.

He was allegedly a 20-year-old billionaire, and he turned up a few times in a car worth around half a million pounds, but his money was allegedly in crypto, and this wasn't good enough for the EFL.

Dennis Stevens
29 Posted 25/02/2024 at 21:01:55
Methinks they must have a cunning plan, Jerome #22. Too fucking cunning for their own good, probably - and ours!
Brendan McLaughlin
30 Posted 25/02/2024 at 21:30:25
Jerome #9

I don't think Moshiri was required to provide any letters of assurance in terms of P&S. They simply wouldn't factor into the calculation.

He did provide "assurances" in terms of Everton being able to continue as a "going concern" in respect of the annual accounts.

Nothing to to with P&S though, I thought.

Perhaps I missed something...

Jerome Shields
31 Posted 25/02/2024 at 22:08:33
Brendan#30

It was stated at the last public AGM,( now they are not public ) that a letter of guarantee had been provided under the Profit and Sustainability Rules to the Premier League by Moshiri..In the Profit and Sustainability Rules of the Premier League It states that on monitoring the Premier League may require such a guarantee letter from Owner / major shareholder.I am assuming that letters of guarantee were sought by the Premier League in subsequent seasons ,as the Profit and Sustainability Rules require, given that Everton has been referred to a second Commission.Since there is no AGMs they may not be required to be made public.

My question to Paul was to establish whether this had any bearing on Moshiri funding responsibilities of the Club.A personnel guarantee by a Shareholder in Company Law circumvents Limited Liability.

Explanation:

'The Premier League may require a letter of credit from a club under their Profit and Sustainability rules. This letter of credit serves as a guarantee of funds that the club has available to meet their financial obligations. It helps ensure that the club is financially stable and can meet the requirements set by the league.'

Derek Thomas
32 Posted 25/02/2024 at 22:19:51
..."He could commit to funding the club for a number of months whilst a new purchaser goes through the OADT process with the Premier League. That might cost him another £75-100 million, but it would see the club to the end of the 2023-24 season and allow us to continue as a going concern."

Somehow I don't see him throwing £75-100 Million of 'good money' after 'bad' as a prefered option.

Edit; Rather, I see him as already mentally consigning us to history (thrown under the.bus) with his only aim being to keep one step ahead of the falling dominoes, rolling under the door Indiana Jones style, hat...and a semi decent wedge...in hand

and like Kaiser Soze - He's Gone!

Michael Kenrick
33 Posted 25/02/2024 at 22:26:58
Brendan @30,

Good tackle. You should ask him which of the various P&S Rules actually requires such a letter?

But he'll probably just make something else up.

Bill Gall
34 Posted 25/02/2024 at 22:41:54
Paul I never said I bought it off him, and how could I have as you said he told me to F---ck off.
Hans Fyhrqvist
35 Posted 25/02/2024 at 22:49:20
Great article by Paul The Esk! It should be submitted to Farhad Moshiri!!!!

Would like to think that Moshiri is concerned how he will be remembered in the history of Everton. So it would surely be in favor of his overall legacy for him to act in the best interest of Everton until his tenure of Everton finally ends.

I will repeat here what I wrote in the comment section in the "Latest Everton Stadium Footage" released by Everton FC on YouTube five days ago:

"Farhad Moshiri, you will be remembered with this great stadium, but also how the new ownership of Everton develops. The onus is on you to secure everything goes in the best interest of all parties. And for all Evertonians what matters here most is of course our beloved club."

Barry Rathbone
36 Posted 25/02/2024 at 23:11:18
I can't get round the idea Moshiri appears to have closed off potentially more lucrative offers by getting in bed with 777.

Something stinks at a very fundamental level.

I wouldn't be surprised if part of the takeover holdup relates to the question of why a businessman deliberately costs himself money?

Ben King
37 Posted 25/02/2024 at 23:35:27
Good article

I also don’t see Moshiri committing another dime towards Everton. Even if it were to result in more money back for himself in the long term, he’s too stupid to think that way or to execute it accordingly

Sadly, Moshiri wants out and wants out ASAP irrespective of the health of Everton

NB to the conspiracy theorists above thinking 777 is a front for Usmanov….are you forgetting that MSP nearly bought us before there was some conflict of interest. Had that sale gone ahead then how does your master plan work in that scenario?

Paul Kossoff
38 Posted 25/02/2024 at 23:50:38
Bill, that's how I was able to buy it off him, you wouldn't pay the extra tenner for the Russian Matryoshka dolls hanging off the dash board, even after he tried to explain to you that there was more than one doll.😀
Paul Kossoff
39 Posted 25/02/2024 at 23:58:37
Ben. That's the conspiracy theory, he wouldn't sell to MSP because they wouldn't agree to be a front for Usmanov being worth billions themselves. It's just a theory, and hopefully one day we will find out the truth in all this mess. Stand by me Ben.😀
Jim Wilson
40 Posted 25/02/2024 at 23:59:18
Maybe it is time to beg Paul McCartney to help his boyhood club.
You can message Mike on Facebook.
Clutching at straws time!
Derek Thomas
41 Posted 25/02/2024 at 00:11:38
Moshiri did produce a 'Letter of Gaurentee' at one time, maybe two of them.
But they were of the 'not legally binding' type...a financial fig leaf...yeah we know you haven't got it to spare and don't really want to spend it if you did - but if you say you have it, we won't actually ask you to prove it, that way we're all 'covered'.

It's said that in the financial world you have to have 2 out of 3 qualities, you have to be; 1) very clever, 2) very honest, or 3) very lucky.

Our chap appears at first glance, to be eminently under qualified on at least two fronts.

Kieran Kinsella
42 Posted 26/02/2024 at 00:12:26
Jim

Nice idea but I think it’s time we turned to a real hero: The Milky Bar Kid.

Jim Wilson
43 Posted 26/02/2024 at 00:27:31
Kieran - one of my all time heroes.
No not the Milky Bar kid, even though he was tough and strong,
Paul McCartney - He can work it out!
Paul [The Esk]
44 Posted 26/02/2024 at 00:50:21
Thanks for comments, I will answer in turn as soon as I can
Mark Taylor
45 Posted 26/02/2024 at 01:10:20
I would put the idea of Moshiri funding us further at a lot less than 10%.

Nor do I think it is probable the stadium will be sold seperately to the club given as Paul says, without an anchor EPL tenant, its value is moot, to put it mildly. Who would want to take on such a major third party risk?

It has to be the whole shebang but with large baths all around for existing investors. The intrinsic value of the club has to be substantially lower than £500m, less than half the investment made so far. I'd argue a fair bit less unless we can find a trophy hunter at the last minute. The Bahrainis?

I have us 50:50 to be relegated, with slightly over half of that attributed to administration, the rest just our poor team and the possibility of more points deducted.

Kieran Kinsella
46 Posted 26/02/2024 at 01:57:57
Jim Wilson

Fair point I guess with his local connections McCartney could get the fan base to Come Together

Mike Gaynes
47 Posted 26/02/2024 at 03:16:31
To be clear, MSP withdrew. They were not rejected by Moshiri.
Jeff Spiers
48 Posted 26/02/2024 at 07:32:37
Dennis @1.

Are you related to the late Dennis Stevens who once played for EFC? Thanks.

Peter Quinn
49 Posted 26/02/2024 at 08:11:08
All very interesting but let's get real. Moshiri & Usmanov are not going to put another penny into Everton.

It took the Premier League 18 months to finally approve the Saudi takeover of NUFC. Masters will do everything in his power not to approve 777 Partners and to delay and delay.

Unless a white knight turns up with a spare billion, ,we are headed slowly into administration albeit we may get through this season.

The death by a thousand cuts has seen this squad lose Richarlison, Gordon and Iwobi. This summer, we will lose Branthwaite and Onana.

There will come a point when 777 Partners stop putting in money. As much as Paul hates them, their input of money has stopped administration.

We will replace our sales with free transfers. Next season, Leicester City, a Leeds and probably Southampton will come up. Then we really are in trouble.

We face our first season in BMD in the Championship. We become another Sunderland. The “Bank of England” and the “Mersey Millionaires” outside the Premier League? That is the legacy of Bill and Farhad.

My outside bet is the new stadium attracts a real investor with the interests of the club at heart who is prepared to pay off our creditors. My real fear is humiliation just as the stadium is completed… typical Everton!

Mark Taylor
50 Posted 26/02/2024 at 09:23:02
Mike 47,

My understanding was that MSP were forced to withdraw from an equity transaction because of an objection to the proposed terms from R&MF?

There are two aspects of that which I find, if not inexplicable, then odd:

1) Why did they then decide the invest their money into the stadium? I know I am especially bearish about its viability, in a financial sense, but it does seem to me to be a very risky transaction, given the potential for administration and a distress sale.

2) What was different about the 777 bid that led R&MF to feel this did not threaten their status as lenders, whereas MSP did?

Dave Abrahams
51 Posted 26/02/2024 at 09:33:12
One group was interested, still are, and couldn't believe that 777 Partners were preferred before them. They are waiting for 777 to be knocked back and then they will bid again.
Mike Doyle
52 Posted 26/02/2024 at 10:02:23
Great (but painful to read) analysis, Paul.

In the absence of Moshiri showing any sign of putting his hand in his pocket, we continue to be reliant on 777 Partners for cash top-ups to keep the club solvent and stadium build afloat.

That being the case, it would help us if the Premier League decision on 777 Partners didn't arrive until after 14 June – that is the opening date of the summer transfer window and the earliest opportunity to start completing sales of the few saleable players we have left.

Even if Dave Abrahams and others are correct about other bidders lurking in the shadows they too will need to go through the lengthy Premier League approval process, thus our cash-flow problem is likely to continue.

Brent Stephens
53 Posted 26/02/2024 at 10:17:12
Kieran #46,

Listen to what the man said – "it's clutching at straws time"; sadly it's a long and winding road, mate.

John Keating
54 Posted 26/02/2024 at 10:39:52
The "independent" commission report on the 10-point deduction mentioned that our overspend may have given us an unfair sporting advantage.

The Club argued that they should have allowed spending on the new ground to be taken into account, unsuccessfully.

So an unfair sporting advantage. Could that also be applied to the more or less free grounds given to Man City and West Ham?

Ernie Baywood
55 Posted 26/02/2024 at 10:44:39
Stadium spending was taken into account, John.

The club argued that interest on loans should also be taken into account. But the Premier League pointed to the fact that the loans themselves stated that they were for the running of the club and not for the stadium.

Plus we hadn't attempted to capitalise the interest. Plus we said that even if we could do it, we wouldn't have done it.

Ian Burns
56 Posted 26/02/2024 at 10:49:31
Paul, an excellent article - but a depressing, even morbid read!

I have seen it posted on ToffeeWeb a few times that anybody purchasing the new stadium, for one reason or another, doesn't help Everton's financial situation.

If somebody came in with £750M and purchased the stadium, leasing it back to Everton on an acceptable financial arrangement, why would that not assist the club?

I understand the argument that nobody would undertake such a commitment but the truth is that the stadium on its own could be a genuine investment for activities beyond football.

Nick Riddle
57 Posted 26/02/2024 at 12:03:45
Paul, this and your previous articles has provided considerable insight into the financial mess the club finds itself in, but I am still confused about what is likely to happen next and the consequences of those probable next steps. Could you comment on the following please.

Presumably Moshiri decided to sell to 777 because at the time he judged that led to the best financial outcome for him personally. In practice that means the club is currently relying on cash injections from 777 to stay afloat. However, if 777 funding stops either because they fail OADT or because they walk away, Moshiri’s best option would be to resume funding himself (assuming he still has the resources to allow that) giving him time to line up another buyer. The alternative would be administration where he’d find himself at the back of the creditor queue. Is that reasoning correct?

Secondly, despite the nine point penalty and almost inevitable relegation, under the circumstances is administration an attractive option for the club as a business?

My layman’s understanding is that the independently appointed administrator has a duty to achieve the best possible outcome for creditors alongside a duty to ensure the business is in the best possible financial shape going forward, which I appreciate is a tricky balancing act. A package including both EFC and BMD unencumbered by historic debt, albeit starting in the Championship, would surely be an attractive option for prospective buyers.

My haziness is around BMD. Following administration is there a genuine risk that the stadium and the club might be sold separately meaning in practice the club become tenants and miss out on the commercial upside? I’d assume the administrator’s preference would be to sell club and stadium together as they’d be selling a more valuable asset thereby maximising creditor return while simultaneously enhancing the viability of the business going forward. However, is it possible a buyer for BMD alone might emerge knowing they’d have the club as anchor tenant, or can that possibility be discounted as an obviously bad investment? Other than liquidation, being tenants at BMD following administration would surely be the worst outcome.

Finally, I’ve read elsewhere that the fixed price contract with Laing O’Rourke would be at risk if the club defaults on stage payments or goes into administration. Is that correct? Should we be worried?

Paul, any clarification to the points above would be appreciated. Thanks for your contribution to this debate.

Nick Riddle
58 Posted 26/02/2024 at 12:12:22
Apologies to one and all for the length of my comment at 57 above. I suspect I have the habit of using six words where just the one would do!
Dennis Stevens
59 Posted 26/02/2024 at 13:06:37
No, Jeff #48 - not even named after him, purely coincidence.
Jerome Shields
60 Posted 26/02/2024 at 13:31:26
Michael#33

Brendan already knows about the relevant Profit and Sustainability Rule.

Don Alexander
61 Posted 26/02/2024 at 13:54:02
Yesterday,
The word disaster seemed so far away
Now it looks as though it’s here to stay
But who gives a shit for yesterday?
Jeff Spiers
62 Posted 26/02/2024 at 15:36:49
Dennis, thanks for getting back
Pat Kelly
63 Posted 26/02/2024 at 19:27:30
Given Moshiri’s track record, can anyone expect him to make the right decision now ?

Given the extent of debt, as outlined expertly above, the Club will be in financial peril for many years to come, saving some sovereign wealth fund comes to the rescue. We are hogtied well and good. The on-field implications will see us struggle for many years.

Jerome Shields
65 Posted 27/02/2024 at 08:13:12
Derek #43,

You are right, there was two letters. The first one was a letter of guarantee, the second was a letter of assurance to shareholders.

At the time, I thought the same as you, but then came across that in Profitability and Sustainability Rules procedure for dealing with Clubs who were in danger of breaking the Profitability and Sustainability Rules.

The order of the procedure is: a monitoring period, a letter of credit from the owner guaranteeing funds if required, referral to an Independent. Commission.

Interestingly in the Premier League Profitability and Sustainability Handbook, the reference to the Letter of Credit requirements is in the FFP section of the Handbook.A letter of Credit is a similar requirement under the Uefa FFP Rules.

It seems that, in this case, there is an overlap between the Profitability and Sustainability Rules and the Ueafa FFP Rules. I suggest that to enter a European Competition it is a requirement that funds are in place.

Both the letters you mentioned were highly spun at the time. In the case of the first letter, IMO this was to hide it's true significance. It had to be made public, but now since there is not a requirement to have an AGM, such a letter would not have to be made public.

Jerome Shields
66 Posted 27/02/2024 at 08:16:06
Explanation Letter of Credit

'A Letter of Credit is a financial document issued by a bank or financial institution guaranteeing that the payments will be made to the seller under certain conditions. It is not the same as funding by the owner of a Premier League Club. Funding by the owner is a commitment by the individual or entity to provide financial support as needed.

Whether it is legally binding depends on the terms and conditions outlined in the Letter of Credit or the funding agreement. It is recommended to consult with a legal professional to fully understand the legal implications of such documents in the context of Premier League Clubs.'

Jerome Shields
67 Posted 27/02/2024 at 08:32:21
Bloody typical Premier League. Michael is going to have to find a Lawyer for Paul the Esk to answer my question.
Jerome Shields
68 Posted 27/02/2024 at 11:22:03
Brendan #30,

I can't dispute what you say. Dependent on Michael providing legal funding.

John Bourne
69 Posted 27/02/2024 at 18:06:57
Jesus, it's worse than I thought. Excellent article, Paul.
Ray Said
70 Posted 27/02/2024 at 18:39:31
i know its singing an old song but a lot of this financial mess could have been avoided as the club has/had a stadium that reputable people like Trevor Skempton and Tom Hughes proved could be expanded to a 60k stadium (see link below).

Mayor Joe Anderson made a commitment to use government funding named 'Building Schools for the Future' to knock down the Gwladys Street school and rebuild a better school in the area.

In addition, he offered the club the lease on land adjacent to the Park End so the stadium could be expanded. The cost would have been a fraction of the three quarters of a billion pound the new stadium at Bramley-Moore Dock is costing.

The new stadium will not produce more than £30 million per season in additional revenue and the financing will swallow most of that.

Blue Union focuses on redeveloping Goodison Park

Jerome Shields
71 Posted 28/02/2024 at 09:34:15
Ray #70

'Alan McGuffog 18 Posted 13/07/2015 at 19:31:22

My friends... nothing will happen, whatever we may dream. Everton FC has no plan, for the foreseeable, other than to merely exist in the Premier League.'

How true that post proved from way back then.

The problem with all sensible business ideas is that they are not the priority of a self-serving Board. In fact, there is always a 5% chance that, even if they go aheadm there will be some self-serving buggers, though hopefully in the minority. This has been my experience.

When self-enriching people are involved, possible backhanders, Russian money and incompetence, the logic simple solution can be drowned out. But then we would all be denied the analysis of the outcome that we have been discussing most of our lives.

Joe McMahon
72 Posted 28/02/2024 at 10:07:32
Jerome. A very sobering post.

The objective had one goal, keep Bill, nothing else. I also personally think that the endless employment of ex-players as they "Get Everton" in very important roles has also held the club back. Run like the old chums' club rather than a professional forward-thinking Premier League club.

Greame Sharp on the board just about sums it all up. I wish Kenwright was still alive just to see to see the damage he's left us with, through his own narcissism and selfishness.

Sam Hoare
73 Posted 28/02/2024 at 16:32:33
"Moshiri's reward for this might be the knowledge that his actions allowed the rescue of our club which is doomed to failure without his positive intervention.

He can provide the opportunity for others to deliver the solution. He needs to act now."

If what we are hoping for is in anyway related to the likelihood of Moshiri doing the right thing and putting the interests of Everton Football Club in any way before his own, then I hold little faith. There's been almost no communication from him for a long time, despite the challenges. He has disconnected.

Bobby Mallon
74 Posted 28/02/2024 at 21:39:07
Paul the Esk, everyone of your last few articles has been doom and gloom. So tell us all what's the answer – give us some good news.
Jerome Shields
75 Posted 28/02/2024 at 22:03:32
Joe #72,

People like Kenwright can never see themselves. He only sees people in terms that best serve his ends. I doubt he ever thought for a moment he did anything wrong.

He surrounding himself with yes-men, reliant on his patronage. He had Moshiri's full unquestioned support. Even prepared him for his Everton PR outings. Kenwright could handle the Premier League which even resulted in a deluded defence during the Commission.

He made a huge amount of money out of Everton, He had done everything right. He was a self-proclaimed Evertonian. He would never have seen what you and the rest of us could see. He gave us Good Times… Al Capone only wanted to give people a Good Time.


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