Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

Less frequently quoted, but from the same speech is the line “we have a new experience. We have victory – a remarkable and definite victory.” Perhaps this is a more appropriate expression of Everton’s position and the failure of 777 Partners to fulfil their part in Moshiri’s most significant mis-judgement , that of making 777 Partners his preferred purchasers of his 94.1% stake.
Their failure to complete is a victory – a victory in the sense of how bad circumstances would have become had 777’s plan succeeded at any point in the last 8½ months. What we are witnessing across the 777 portfolio of companies (and with much worse to come) would have been replicated at Everton without doubt. The fact that it hasn’t and now won’t is a victory. A victory of sorts, at least. The primary cause of our problems, Farhad Moshiri, is still in control of the club and whilst we remain solvent, our future remains in his hands.
It is worth repeating – it his errors of judgement that got us to this point and permitted over 8 months of fruitless stagnation. Whatever the terms of the share purchase agreement and the restrictions it placed upon Moshiri to look elsewhere, it was of his doing.

What has to happen next?

I propose a five-step plan to bring stability (and growth) back to the club:
  1. The appointment of external corporate restructuring experts to control our finances and create a restructuring plan;

  2. The removal of Moshiri from the board and the inclusion of new non-executive directors, someone to represent Moshiri’s interests, someone from (1), someone to represent the collective interests of the external creditors, and finally an experienced football executive, past owner or senior advisor;
  3. The appointment of a named investment bank to handle the sale of the club with a defined process and timeline;

  4. Contingent plans, articulated publicly to re-assure fans and other stakeholders to see us through the summer;
  5. The appointment of a small sub-committee with club representation, political representation (locally and nationally) and experienced developers to create an integrated development plan around Bramley-Moore Dock with the new Everton Stadium playing the leading role in the regeneration of the North of Liverpool.

All of the above assumes we can remain solvent and meet our costs in the coming months. Inevitably, that means player sales.

The interim management of the club and the sales process has to be handled professionally and without the haphazard management style of Moshiri. Clearly the club is back on the market – it has to be sold given Moshiri’s unwillingness or inability to keep funding it, his definite unwillingness to manage the club or allow others to manage on our behalf. We can not rely upon the structure, people and processes of the past years
What exactly is on offer to would-be purchasers? A huge club with an incredible history, fanbase, connection with its city, unrivalled untapped potential. A new stadium (not without its commercial flaws) and a significant redevelopment opportunity surrounding it. On the flip-side, a wafer-thin squad, significant payments still to be made on the stadium, the need to sell players to continue funding losses in the absence of other funding options, and a wholly unsustainable debt burden.
As suggested by the five-step plan above, the company is screaming out for a complete corporate restructuring, financially and managerially (off the pitch). Much of this has to be done whilst looking for a new owner. The looking for a new owner has to be done professionally and in a structured manner.
The financial restructuring will be part of any new takeover, assuming the company remains solvent to the point new ownership is agreed and permitted by the regulators, the Premier League.
It has to include, the restructuring of debt. What does that mean? Inevitably, and particularly after the addition of £200 million of junior debt on unknown terms provided by 777 Partners, that creditors ae not going to see an immediate return of funds owed to them. Footballing creditors must of course, as per the game’s rules, but for the financial creditors, it is a different matter.
The two main creditors, Rights & Media Funding (~£220m) and MSP (~£160m) see their positions as secure.
MSP have fixed and floating charges over all of the club’s assets and income, bar the Everton Stadium Development Company, which is charged to Blythe Capital who act on behalf of MSP  Sports Capital, Andy Bell, George Downing and a small segment of debt owed to Farhad Moshiri (roughly £22 million).
Metro Bank debt is relatively inconsequential. Most junior other than the shareholder loans is 777 Partners who have a security arrangement through Rights & Media Funding but that is subordinate to them). Then we have Moshiri’s shareholder loans of £450 million, unsecured and most likely to be written off in any future sale. However their treatment and the terms within are not quite as straight-forward as many suggest.
Inevitably that means pain for most creditors, but that’s the nature of lending – sometimes you make bad decisions and get punished. You cannot charge a premium for risk lending unless you are not prepared to accept the risk. Everton’s creditors know this and must accept it.
Beyond the sorting of the existing mess, there are all the issues, especially commercial issues and importantly redevelopment issues (and opportunities surrounding the move to the new stadium) which need to be addressed (as above) under new management and perhaps a little more imagination than has been seen before.
The likelihood of a new Government, more politically aligned with Steve Rotherham, and regeneration of Liverpool is the ideal catalyst for the fifth part of the recovery plan. It has to be done and can only add value to the club and make it more attractive to new owners

An opportunity to recover and flourish

There is an opportunity to put the wrongs of the Moshiri era behind us – an opportunity to rise Phoenix-like from the awful position we are in. It needs boldness from Moshiri. It needs him to step aside and allow others to extract the club from its current mess and create the environment in which we can thrive as a club and as the driver of economic development in North Liverpool under new ownership.
There can be no more delay – no more of the complete unprofessionalism that has driven the club to the edge of a competitive and financial cliff. We still may drop over it but, if Moshiri allows it, experienced, independent professionals can pull us back.

Reader Comments (22)

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Bill Hawker
1 Posted 06/06/2024 at 04:29:04
I like the five-point plan, Paul but especially like point three. Having a quality investment bank with a plan and process in place should help any future entanglements with a shady outfit like 777 Partners.

I'd like to think that there are more reputable people or groups out there that would be fantastic owners for Everton and that a relationship like that could help bring them to the table.

Andrew Merrick
2 Posted 06/06/2024 at 07:27:51
Thanks for giving us hope, when you read a common sense proposal like this the future looks better, possibly...

Bill Kenwright is gone, but Moshiri plus one are still here, that is the singular obstacle now.

Thanks, Paul, let common sense return soon please.

Ian Bennett
3 Posted 06/06/2024 at 08:18:18
Sadly, Moshiri will do what the hell he wants, and his interests will come first.

No one with any serious professionalism is going to touch it with a barge pole. It has all the hallmarks of when Trevor Birch came in to fix Everton. Frustrated, he walked within months.

I can't see any new CEO or board until it is sold. Who would join this, knowing they could get bulleted in short order by new owners, and working for that clown? And why would the club take on more cost? The Everton Way is just puddle on, and save a couple of quid.

Our only hope is that creditors can be appeased long enough for us to find new owners to sort the issues out.

Refinance the stadium, buy out Moshiri, and clear the Rights & Media Funding loan. The club is a basket-case, but the stuff that really takes time to solve are done — Premier League already, huge fanbase, and new stadium.

Here's hoping for a real owner, with money, vision, that gets the right people around him and takes this club forward. For too long we've been run by poor quality people that aren't maximising what we've got.

Bob Parrington
4 Posted 06/06/2024 at 10:09:51
Paul TE,

Thanks for your analysis once again and the fact that it has a positive overtone. Good to see the 5 point plan because the current situation needs A PLAN. Adage, 'fail to plan means plan to fail'.

Certainly, we need an expert with heaps of experience in helping distressed companies avoid administration and there are some really good ones in UK. Balanced minds are needed, of course!

Personally, I do believe there is enough IP capital within the Everton banner and the selection of the expert is likely the most important decision to be made. IYO who will hold the key card in the selection of this expert?

Mark Taylor
5 Posted 06/06/2024 at 10:43:58
Can't disagree with the need for current investors to take a haircut, the truth is, what has been implemented is essentially non viable.

However there is one factor that, in all the discussion on this, has never truly been explored. That is the value of the stadium development beyond just the place we play football in. Actually I'd go further, I've never actually seen anything resembling a business plan for it that projects incremental revenue and where that would come from. Is it really a hugely exploitable asset or the white elephant I fear it is? That is before we get to the issue of what the club actually owns and has rights over in the development.

The more there is hidden value in the project that is certainly not visible to my eye, the less of a haircut those investors will be willing to take. More of a trim than a number 4. The usual solution to such a scenario is a debt for equity swap but do we really want 777 as long term minority shareholders?

I'm not actually convinced that removing Moshiri from the board, even if he was willing, helps much. Better the person with power, however useless he might be, than his mouthpiece at the top table, especially given that some regard him as merely the mouthpiece for Usmanov.

Michael Kenrick
6 Posted 06/06/2024 at 10:51:18
Interesting to contrast with what was being
predicted just a year ago...

Moshiri is set to cede majority control of Everton with a new share issue in favour of new investor (MSP) diluting Moshiri to below 50%. New investor will control budgets plus board composition allowing for change in key Chair & CEO positions.

Despite how Moshiri's people have presented it, Everton will not find sufficient debt funding for BM given our current position. The only way it gets funded is by issuing new shares. That share issue plus the warrants will almost certainly put Moshiri in a minority position.


David West
7 Posted 06/06/2024 at 11:20:32
Paul. Good ideas, but Moshiri has no track record of taking the right decisions.

Point 3 on the plan. An external bank to handle the sale of the club. Who's actually facilitating the sale of the club at the moment? Are there any actual experts or external companies involved?

MK @6.

Isn't this how MSP get the shares they originally wanted at a now knockdown price?

Doesn't it make sense for R&MF to allow them to take the stake they originally wanted now? Converting the debt to shares?

Wouldn't that relieve at least some burden and bring competent people on board?

Mark Taylor
8 Posted 06/06/2024 at 11:31:52
Michael, whose words are those?
Tom Bowers
9 Posted 06/06/2024 at 12:21:34
The bottom line is we want success and don't care how we get it as long as it is above board.

Survival financially is obviously the first order of business and it is a problem as we all know too well at our favorite club.

Once the powers to be get that sorted perhaps we can look forward to a much better season, which all being well will be the finale at Goodison.

Sometimes a change is as good as a rest and as Everton's home record at Goodison has become shabby over the last few seasons, I, for one, welcome the move.

Brian Harrison
10 Posted 06/06/2024 at 12:34:27

While I agree with a lot of what you have suggested, this is all dependent on Moshiri and we know that he is only interested in minimizing his and his boss's debt.

Certainly bringing in a company to try and restructure the debt will have to be a priority as, without the agreement of R&MF and MSP and also 777 will be wanting their money back. So, until agreement is reached, nothing happens.

The truth is this is a club with around £1B in debt and, while some will point to both Man Utd and Chelsea being in a similar boat, they have a lot more liquidity than Everton.

I just don't see where the attraction is for a new investor, as you have pointed out. Kevin Thelwell has said that players will be sold. So that suggests the squad will be weaker possibly next season.

Even super-rich Saudi Arabia are finding with P&S rules you can have all the money in the world but there is very little wriggle room to invest. That is unless Man City can win their case against the Premier League which would then allow Saudi Arabia to plough in millions of extra funds into Newcastle.

Other than what The Mirror quoted which was Moshiri was minded to extend the agreement with 777, we have heard nothing from our owner. So has he extended the agreement with 777, which would preclude him talking to any other possible investors?

And why does he believe given the myriad of court cases 777 have to answer that they will get the go-ahead from the Premier League.

Mark Taylor
11 Posted 06/06/2024 at 12:43:10
Brian @10,

Amid all the gloom, here's a positive thought. Maybe the Saudis are not averse to riding more than one horse. Not owning us, can't do that under the rules, but how does the Riyadh Air Stadium at Bramley-Moore Dock sound?

£50m a year and it's theirs!

Keith Gleave
12 Posted 06/06/2024 at 13:21:36
All of these are sound points and urgently require putting in place.

Point 5 is the greatest and should have been looked at in parallel with the stadium build. This is what has and is happening in East Manchester with Man City. The development opportunities are vast in an integrated leisure-based environment. Link this to the arena, museum and cruise liner terminal.

It takes vision, determination and leadership to see this through and it's generally private business rather than political push that achieves the vision and success.

Raymond Fox
13 Posted 06/06/2024 at 13:26:24
Talk is cheap, it's easy to be wise after events.

We are where we are because Moshiri gambled a fortune on managers and players plus so-called experts to buy the right players.

It was a gamble to presumably get us playing in Europe and actually win something after all these years. It's fair to say we were all for it.

Then Moshiri decided to build a new stadium, no doubt with Usmanov behind him – again the majority of us were all for that. We now know what happened next which no one could have foreseen.

Hence we are here; sure, Moshiri has made mistakes… but circumstance and bum advice from so-called football and business experts have played a major role in the situation we are now in.

Dennis Stevens
14 Posted 06/06/2024 at 14:31:50
I can't help but think somebody will come in to sort the mess out, probably at considerable discount, and then sell on at a decent profit. So we're probably in line for a couple of changes in ownership over the next few years.

That scenario seems a tad reminiscent of Man City's journey, although City were never in the sort of mire that Everton are now in, and Everton have had to pay for their new stadium, of course.

Pat Kelly
15 Posted 06/06/2024 at 15:22:41
Moshiri just wants out. He persisted with 777 while all along it looked impossible and detrimental to the Club even if it they had completed the deal.

He will take the next ‘best' offer he can get that gives him some return and an early exit.

Jay Harris
16 Posted 06/06/2024 at 15:34:54
All good points, Paul, but I would disagree about removing Moshiri as a director because as a director he would not want us to go into administration because a) that would be a big negative for any future dealings he would like to have, and b) he would lose the majority of his £450M interest-free loan money.

At the moment, he has big incentives to keep us floating until a deal is agreed and I'm sure he is in a rush to get out as quickly as he can, so won't be wasting time in agreeing a sale.

Philip Bunting
17 Posted 06/06/2024 at 22:52:55
Paul...I'd say a 6th step must include the redevelopment of Goodison Park so that we leave the area with a future and not a wasteland. Where will that money be found?

In terms of money, it's all gone quiet on the stadium naming rights which I thought a few months back had been progressing well to the point of securing a partner. Could any income here by the 30th June help us with PSR? Rather than sell players.

James Flynn
18 Posted 07/06/2024 at 01:07:47
Mark (8) etal

Michael is referring to this rumor mill item of a year ago.


Paul had to have some "in" with negotiations to post this, "Moshiri is set to cede majority control of Everton with a new share issue in favour of new investor (MSP) diluting Moshiri to below 50%. New investor will control budgets plus board composition allowing for change in key Chair & CEO positions."

That's too matter-of-fact for him to have made it up. Instead of waiting for an official announcement, he posted as if it was a done deal.

That was on June 1, 2023. On August 15, we learned of what did come out of the negotiations, which left Paul with some egg on his face.

Which Michael here is quite happy to remind us.

Alan J Thompson
19 Posted 07/06/2024 at 09:26:56
Paul, I wouldn't argue with the 5 points you say need to be put in place but you offer no time frame for their affect to be seen, even that 1942 quote took another 3 years to reach some sort of conclusion and at no little cost.

Any potential buyer might be wondering how soon it might be before a profit is turned and if that was the best use of the money. Unless there is an Evertonian billionaire out there with time on his hands.

Mike Dolan
20 Posted 08/06/2024 at 06:49:41
Paul, I think you are the world's most hideously unrealistic Evertonian on the planet earth.

I am not an accountant but let's be honest, when Moshiri and Usmanov took over EFC, very few people were unhappy.
It soon became obvious to me that Moshiri was just a front for Usmanov.

It also is kind of obvious that after our actual owner Usmanov got on the wrong side of British foreign policy because his evil mate Putin invaded Ukraine, Moshiri's paid-for front was crumbling.

I actually respect Usmanov and Moshiri because they have built a magnificent stadium. Think about that… who else has achieved that?

Rick Tarleton
21 Posted 08/06/2024 at 11:50:29
Moshiri is a man capable of making vast sums of money, so one assumes he is not totally stupid. He has spent a great deal of money on Everton; whether it was his money or Usmanov's remains a moot point.

Now he wants one thing and one thing only, to retrieve as much of his money as is possible. For him, 777 Partnera offered the best return and so he hoped it would work and was not willing to give the chimera up until it was proved not only to be dead but cremated as well.

He will sell, not to the offer that offers the best future for Everton FC, but to the one which offers him the best personal return and the two may not coincide.

The interesting times, in the Chinese sense, have not yet gone away.

Adrian Evans
22 Posted 09/06/2024 at 09:42:24
I absolutely don't want Everton to be part of a wealthy bloke's stable of clubs!!!

This nob who says he wants to buy 45% of Everton but Roma will be the No 1 Toy in his set!!!

For me, this happens, I am done!! I am not interested. I'll take my 62 years of memories and go watch Tranmere. He can shove it, play with his football set. Everton isn't a toy for a weathy billionaire film director.

Half full stadium!! drop into the Championship and ⅓ full, done, gone.

Let's pray A Bell, G Downing and MSD Partners buys us.

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