So, what next?

Firstly, facts. It remains the case that, at the time of writing, neither Farhad Moshiri nor Everton have officially commented on the status of the proposed purchase by 777 Partners of Farhad Moshiri’s 94.1% shareholding in Everton. It has been reported through the usual media sources that Moshiri is “unconvinced that 777 Partners have the funds to complete the deal”.

For once, Moshiri’s judgement is correct. Why it has taken him quite so long to reach this point is anyone’s guess given the huge, mounting body of evidence not only built during the last eight months, but that would have been evident in any robust due diligence process prior to agreeing to the proposed sale.

The idea that this is some brilliantly devious method of getting Everton through the season via an unsuspecting third-party funder bears no credence either. Moshiri wanted the 777 Partners bid to succeed as it represented the best offer for him, and he wanted it completed as quickly as possible. The fact that it didn’t is yet another testament to Moshiri’s judgement. For 777 Partners, this was a deal that Josh Wander in particular wanted, but one that was advised against by some within the 777 stable.

The zombie state it has left Everton Football Club in for virtually the whole of the season is testament to Moshiri’s complete dereliction of duty to the club, shareholders, stakeholders, employees and fans alike.

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The choice of 777 Partners as potential purchasers and the unwillingness to call time on what was never going to be achieved has caused almost irreparable damage to Everton Football Club in terms of our reputation, our competitiveness, and our attractiveness to other buyers.

As things stand

As things stand, we are secure in the Premier League for another season. We have enough cash to see us through the immediate term. What we don’t have is access to capital, nor the ability to repay creditors, particularly those overdue.

Our current creditor position is approximately as follows:

MSP Sports Capital – £160 million; 
Rights & Media Funding – £225 million, 
Metro Bank – less than £5 million; 
777 Partners – an estimated £192 million 
Farhad Moshiri – shareholder loans of £450 million.

 Football creditors will include outstanding transfer payments including last summer’s business and are likely to be in excess of £70 million. I am assuming payroll and HMRC are up to date – there’s nothing to suggest they are not.

That suggests gross debts of approximately £650 million excluding the outstanding shareholder loans.

MSP Sports Capital was due to be repaid by mid-April 2024 and remains unpaid.

Rights & Media Funding have provided a 5-year rolling credit facility. A rolling credit facility is the corporate version of a credit card. It offers funding to a certain amount for a certain time and can be drawn down at any time subject to the credit and time limits. As of 30 June 2023, the Rights & Media Funding facility stood at £150 million on a 5-year term, £52 million on a 3-year term, and €28 million with 34 months remaining.

The term of the 777 Partners loan has never been disclosed.

In terms of security, &and Media Funding have charges over Everton’s bank accounts, fixed charges over Everton’s property portfolio, and a floating charge over all other unencumbered assets.

777 Partners have a subordinated security arrangement with Rights & Media Funding. This puts them before unsecured creditors but behind all other secured creditors including football creditors.

MSP Sports Capital Options

MSP Sports Capital has two distinct security arrangements. One is a standard fixed charge over all the assets of Everton Stadium Development Company Limited. This means that, in default, MSP can acquire the stadium to recover their loan.

Alternatively, MSP has an option to acquire 50% plus 1 share of Everton’s issued share capital. That currently would equate to 67,501 shares in Everton Football Club. These shares would be acquired from Blue Heaven Holdings, the Isle of Man Company that holds Farhad Moshiri’s 94.1% shareholding. Exercising this option would give MSP majority control over Everton Football Club.

Much has been written about MSP exercising either of their options in the event (as now appears apparent) their loan is not repaid.

It’s worth examining both scenarios. It has to be said, in isolation, exercising either security arrangement is clear-cut for MSP, its limited partners or, importantly, Everton Football Club. MSP triggering one of its two rights does not solve Everton’s problems.

Whatever the solution is, the assumption must be that Moshiri’s £450 million of outstanding shareholder loans are written off completely.

Let’s explore the options

Holding the stadium company is a good deal as long as there’s a viable tenant (ie, Everton Football Club). However, for Everton to be viable, the football club alone and no longer owning its own stadium, it would have to clear (or significantly pay down) its debts and have a fresh injection of working capital. It’s a model that can work – neither Manchester City nor West Ham United own their stadiums, and a long lease has a capital value; however, both those clubs do not have Everton’s debt burden, nor is Everton’s future tenure in the Premier League as strong even as West Ham United’s.

Additionally, acquiring the stadium would require additional capital to complete the construction of the stadium and meet the interest costs of the fallow period between handing over the keys and the start of the 2025-26 season. All of this is possible, but would require MSP to remain committed, add new capital, or provide a new long-term, sustainable debt provider.

It also requires a viable, solvent tenant – a recapitalised Everton Football Club. From my perspective, it is difficult to see how – even with the net proceeds of a stadium sale to MSP – this can be achieved without significant debt restructuring. One has to assume that 777 Partners, in a post-failed bid world, would not be the most accommodating of creditors (especially if they ultimately enter “bankruptcy” in the USA or their creditors make aggressive demands on their assets). The Leadenhall allegations will cause many lenders to look at their loan exposure to 777 Partners or related companies. A-Cap and potentially 777 Re going forwards similarly. 777 or their administrators (equivalent of) could only do so by the sale of assets, or the calling in of their own security arrangements.

Thus a viable Everton in the above scenario is only likely to be achieved (in my opinion) though administration. The most senior debt holders would be paid, the junior and unsecured creditors would be in a much more difficult position. Clearly no one wants this, the human cost is horrendous besides the reputational damage to the club.

However, it has to be recognised that the responsibility for that lies with the current owner and directors of Everton Football Club. It is they who have created this unholy mess.

Alternative Option

The alternative option for MSP is to take up their majority stake in Everton Football Club Company Limited. That gives them control but doesn’t solve the funding issues for the club, nor the debt, nor the completion of the stadium. It only makes sense in conjunction with other solutions.

As above, when discussing the stadium option, there’s no logical reason for anyone to assume a majority position or be a new investor in Everton Football Club if there’s not a debt restructuring. With 777 as significant but junior debt holders, it’s difficult to see an agreed restructuring. The secured debt holders are relatively comfortable in a full return of funds in administration, so there’s little incentive to negotiate.

Realistically, in this scenario (as above) administration is the likely outcome prior to new investors either acquiring the club completely or becoming co-investors with MSP.

For MSP to retain a majority stake, they would have to participate in any equity raise. An equity raise is essential to pay down debt to sustainable levels and recapitalise the business. In doing so it opens the door to a sustainable debt package secured against the new stadium (as with Tottenham Hotspur and Arsenal). Given where we are in the interest rate cycle, such a deal might be relatively short term with the option to convert longer when interest rates are lower (as Arsenal did).

I suspect a new share issue to a new investor is possible but, unless the investor acquires the whole business and provides the future capital, they would be left with control (ie, majority holding) but leaving two significant minority holders in Moshiri (Blue Heaven Holdings) and MSP. Not a situation Moshiri or MSP would necessarily welcome, although for Moshiri it does present the opportunity for a future pay date.

MSP investors would remain invested until MSP’s stake could be sold at a later date.

No simple solution

There is no simple solution here. The scandalous way the club has been run, the choice of preferred purchaser in 777 Partners, and the delay in Moshiri realising 777’s inability to complete (a realisation only dawned upon by endless reports of their financial failings) has put us in this position.

Removing 777 Partners from the equation is only the first necessary step to a solution. More accurately, by their own deeds, 777 have removed themselves despite any further denials that may be offered. Their position is likely to deteriorate further in the coming weeks, again with considerable human cost – take the Bonza employee treatment as clear evidence of such.

Sadly, the idea that Everton can escape all of the above without administration is in my opinion, wishful thinking. That is a reflection and the responsibility of Farhad Moshiri and his directors. There are investors, buyers, funders in the wings as stated. But for them to be public in their interest at this stage makes no business sense. Sadly this has to play out.

Everton will continue; we have a huge amount to offer the new owners aside from our history. However, sadly the detritus of Moshiri’s terrible reign and his choice of would-be purchaser has to be cleared first.

Note: This is a personal opinion piece, provided free of charge at, for those who choose to read it. It neither represents nor supports the interests of any existing or future backers of Everton Football Club.

Reader Comments (24)

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Tony McNulty
1 Posted 09/05/2024 at 17:05:21
"Sadly, the idea that Everton can escape all of the above without administration is in my opinion, wishful thinking."

Presumably unless the parties purportedly waiting in the wings turn up on the white charger.

Brian Harrison
2 Posted 09/05/2024 at 17:43:37

As usual, you have been right all along about 777 and it's just a pity that Moshiri had other ideas about their ability to fund the sale of Everton Football Club. You also point out the problems going forward, even if at this late stage, Moshiri looks for new investors, and knowing Moshiri, that's not a given. But as you say, administration seems a likely outcome.

I believe the 3 clubs coming up from the Championship will be far stronger than the teams who came up last season. So, a 9-point deduction from the start of next season will make survival much harder than it's been this season.

That being the case, I don't see anybody investing in the club and even if Moshiris's £450M is written off, there is little or no incentive for MSP or anyone else to pump further money into the black hole that is Everton, which I believe would probably lead to the club being insolvent which would be a disaster.

So… an unfinished stadium and a squad so depleted that it's not a viable asset for anybody to own.

Pat Kelly
3 Posted 09/05/2024 at 18:39:32
Moshiri has fashioned this millstone and hung it around his neck. It's going to cost him to get out of it. It has already cost Everton and will continue to do so for the foreseeable future.

He once said he didn't want Everton to be a museum. He's made it worse, a mausoleum.

Graham Fylde
4 Posted 09/05/2024 at 20:31:28
Both sobering and bleak, Paul.

A couple of questions if I may:

Can you further my understanding of the assertion ‘all senior debt holders would be paid'? As I understand it, MSP has first dibs on an unfinished stadium with (at that point) no tenant.

R&MF have security over most other assets but how would the notional value of those assets be realised to pay them their money in the real world? I do struggle to see why either creditor would want the uncertainty of administration.

What is Teneo currently doing?

Don Alexander
5 Posted 09/05/2024 at 23:17:29
I don't pretend to have any grasp at all of credible accountancy (it's the only thing I have in common with Moshiri) but the Esk has always been broadly, and usually pointedly, on the ball with his analyses, despite his various naysayers on TW.

Even as an accountancy numpty I saw yonks ago that Moshiri and his odious chairman were leading us to hell in a handcart with their years-long self-serving antics, only one of whom was (very) successful in achieving his greedy ambition to the cost of all of us true Toffees.

If Moshiri has lost nigh on a £billion of somebody else's money he's in immeasurably deep shit.

If he's merely lost a £billion of his own money he'll be merely bruised, and will be easily able to shuffle off into an opulent retirement given the vast personal wealth he still has via his opaque antics as Usmanov's monkey.

I don't have a shred of sympathy for him.

I think the two of them have left us fucked for many years to come, regardless of the White Elephant Stadium.

Mark Taylor
6 Posted 09/05/2024 at 23:23:41

My understanding, if we were in an administration, is that R&M would have several options to recoup their money
1) Stadium residue value (even I think its value is quite a bit greater than MSP's secured loan, despite regarding BMD as a white elephant)
2) Other bits of property
3) The other big asset, the players. Jarrod, Onana, Jordan etc

That should more than cover their loans. Moshiri and 777's much less so. And a shell of a club left...

Dupont Koo
7 Posted 10/05/2024 at 02:41:56
Thanks as always for your spot-on analysis, Paul.

The Club's debt is in such a crippling state that no proper investor would bother to pick up the club for £1, and then having to fund the remaining work on building the stadium + assuming all the debts.

Ed Prytherch
8 Posted 10/05/2024 at 02:55:47
Administration is moving rapidly from a possibility to a probability and if that happens there will massive changes at EFC. Fasten your seatbelts.
Jay Harris
9 Posted 10/05/2024 at 05:07:30
The deduction of 9 points for administration is not the main problem.

It is the clearance of a lot of the staff, the fire sale of our assets especially BMD, the sale of key players and the reputation of one of footballs greatest institutions.

I would hope that Moshiri/ Usmanov write off some of their loans and seek to retain a minority interest and MSP take up the controlling interest. There is also plenty of opportunity to sell off/franchise a lot of the stadium facilities and naming rights have to be worth quite a bit seeing as the 2028 UEFA games will be held there.

Si Cooper
10 Posted 10/05/2024 at 05:24:00
Forgive me if it’s not relevant, but what is the asset value of Goodison Park? Is it something that developers are / will be queueing to buy once BMD is ready?
Eric Myles
11 Posted 10/05/2024 at 05:39:54
If MSP exercise their 51% share option does that mean their debt is converted to shares?

And Moshiri is left with 43% of the shares?

And would that debt to shares conversion mean the value of the Club would be seen as £320 million? (Approximately, being 2 X MSP's 160).

And if 777 go bankrupt/into administration is the Club liable to repay their £190 million immediately?

Jay Harris
12 Posted 10/05/2024 at 05:41:54
Kenwright mortgaged Goodison not long after he took over as well as selling off our Bellefield and Netherton training grounds.
Graham Fylde
13 Posted 10/05/2024 at 09:02:57
Mark #6, thanks for your reply.

I certainly agree with your analysis from a theoretical standpoint.

My point is that there is usually a gap between the value of security on paper and the real world, especially in fire sales. The real question for me is do the secured creditors think that administration is as straightforward as Paul seems to imply, they easily realise those assets, take their money and move on?

Despite the real threat of administration, I hope there is a different solution and that the presence of Teneo might signify that other routes are being explored and negotiated. Either way, it seems to be moving at pace now so we should know soon.

Si Cooper
14 Posted 10/05/2024 at 10:09:12
Jay (12), so how does mortgaging a stadium work? Is it possible the value of the ground could drop once it becomes essentially untenanted and therefore not earning it’s keep?
Jay Harris
15 Posted 10/05/2024 at 15:04:30

I believe it was mortgaged for £15M and I would imagine it is worth more than that now for redevelopment but it depends on what the club do with it.

Michael Kenrick
16 Posted 10/05/2024 at 20:19:05
I see the BBC's Giulia Bould seems to have a somewhat different read on things from our master money man:

“Everyone is being paid on time, the stadium is on time and being paid for, no HMRC issues so I'm unclear why administration is being thrown about.”

In another reply on new bidders she added:

“Talks on going with different parties and contingency plans have been in place anyway. I'm sure updates will come. Business deals in any industry are always kept under wraps for a time. Annoying in footy as fans want to know but right now work is being done.”

Dave Cook
17 Posted 10/05/2024 at 20:26:49
I feel, if we're at real risk, we need to win tomorrow, get the 9 points clear and suddenly hit administration after the trip down to London so we're not gonna have to worry about the points next season.

Until then, I'll remain paranoid that we're still going to get relegated this season.

Jerome Shields
18 Posted 13/05/2024 at 08:46:35
'777 Partners have a subordinate security arrangement with Rights & Media Funding.'

Have you any more details on this, Paul?

As you say, there are no details of the agreement between Moshiri and 777 Partners, which is a really big question But you did bring up something that I should have considered, the status of Everton in regard to HMRC payments, which could prove crucial.

I agree with your conclusions. Christine Foster has a added question to the debate. Which is why Moshiri was so wrapped up in 777 Partners? Maybe it wasn't all his doing?

Steve Brown
19 Posted 13/05/2024 at 09:25:34
We should follow the Chelsea model.

They sold 2 hotels to themselves for £76.5 million (approved by the Premier League) to reduce their loss.

Now they are aiming to stay within 2023-24 PSR by selling the training ground to themselves (intra-company group) with a fair market value profit of £100-150 million.

Eric Myles
20 Posted 13/05/2024 at 10:39:32
Steve #19,

Our problem is that Chairman Bill already sold off all our non-playing assets years ago…

Even the pot to piss in is no longer there.

Jerome Shields
21 Posted 13/05/2024 at 10:58:38
The ongoing dispute between Everton and the Premier League over adjusted losses for PSR calculations:

'1. The transfer levy sums are primarily paid into a pension fund for players, out of which only the surplus, if any, would flow indirectly to the Professional Game Youth Fund; and

2. It could not, on the balance of probabilities, decide that Everton would not have obtained the two working capital facilities had it not been for the stadium development as it was normal for the clubs to carry a degree of commercial debt. The Commission further concluded that Everton would in any case struggle to bring itself within the meaning of Section 25.2 of the Financial Reporting Standards 102 which permits capitalisation of borrowing costs directly attributable to the qualifying asset (i.e. the stadium) where the funds form part of an entity's general borrowings. This was because the commercial working facilities were advanced for the limited purposes of working capital and therefore not within the category of general borrowings.

This meant the Commission included £7.6m in respect of the transfer levy sums and the £2.2m in respect of stadium working capital facilities in the PSR Calculation, a total of £9.8m.'

The difference is £9 8 million and may bring into doubt the tax computation. HMRC will be taking note of this.

Jerome Shields
22 Posted 13/05/2024 at 19:21:45
Dave #17,

With the 2022-23 Accounts, Everton appear to be still in breach of PSR, which means they could be referred to a Independent Commission next season.

James Flynn
23 Posted 18/05/2024 at 23:03:35
"Our problem is that Chairman Bill already sold off all our non-playing assets years ago…"

Huh? When was Goodison sold? Is there a citation or reference to that?

In the talk of Goodison's future, there's no mention of an owner other than Everton Football Club.

Stephen Davies
24 Posted 20/05/2024 at 13:27:08
FAB meet with Moshiri this week; I'm sure they have pertinent questions to pose for him.

It will be interesting to hear his responses and FAB's take on it

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