01/12/2023 17comments  |  Jump to last

The Premier League are reportedly taking an increasingly forensic approach to 777 Partners' suitability as owners of Everton while the Department of Justice in the United States has launched a probe into the firm's finances.

The Miami-based investment vehicle agreed a deal with Moshiri in September in the hope of concluding the buyout by the end of this year.

Together with the Financial Conduct Authority, the Premier League have been conducting a routine examination of 777 Partners but amid a slew of media relevations, led by Norwegian investigative outfit Josimar, regarding the firm's financial dealings, Bloomberg News are reporting that their bid "is facing increasing scrutiny" amid "a more skeptical stance" from the league.

None of Everton, 777 and the Premier League were prepared to comment to Bloomberg but the claim comes from people "asking not to be identified because the information is private".

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In the interim, 777 Partners have been providing the club with loans to cover day-to-day operations with that debt likely to be converted to equity should their takeover get the green light.

Potentially more serious for 777 is the revelation via Semafor that their "murky finances" are now under a federal investigation headed by the prosecutor who recently won a conviction against former FTX head Sam Bankman-Fried.

Nicolas Roos is part of a DoJ team looking into whether 777 "violated US money-laundering laws, among other infractions".


Reader Comments (17)

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Tony Abrahams
1 Posted 01/12/2023 at 19:50:50
How did it get this bad? It looks like 777 Partners are actually keeping the club afloat with these loans.

I'm glad there's going to be extra scrutiny because the last thing we need right now is another leveraged buyout.

Michael Kenrick
2 Posted 02/12/2023 at 08:42:56
And the original story at Semafor ends with this:

The DOJ probe is in its early stages and may not lead to further actions. In response to a request for comment, an attorney representing 777 said the firm “considers these scurrilous and damaging accusations to be deliberately timed to undermine its ongoing commercial activities, including the ongoing period of regulatory approvals for the proposed acquisition of Everton FC.”

We shall no doubt see in the fullness of time which way the cookie crumbles!

Pat Kelly
3 Posted 02/12/2023 at 17:20:41
In fairness, no one knows murky better than the Premier League.
Brian Wilkinson
4 Posted 05/12/2023 at 12:32:36
I think the very thought these coming up does tie in with trying to disrupt the takeover for whatever reason.

It could be that they are a bad prospect, no one knows, but it does seem that some are trying to disrupt the takeover. If I was not paranoid before, the way Everton have been got at from all corners makes you think certain regime do not want Everton in the Premier League, or have a takeover.

But they have no problems whatsoever with Saudi owners, stinks of crushing Everton Football Club by any means.

Danny O’Neill
5 Posted 05/12/2023 at 12:49:41
I have no idea.

On one hand, a takeover is needed. On the other, they seem shady. But then we say that about Moshiri, Usmanov and countless other Premier League club owners including the state-owned clubs.

Maybe it's due diligence. Maybe it's another kick in the teeth to Everton.

I hope we've got a Plan B; otherwise, Moshiri is reaching under the bed and down the back of the couch.

Sean Kelly
6 Posted 05/12/2023 at 13:05:51

I think our former best Evertonian ever took the couch with him. So it's just Moshiri's mattress now!

Brian Harrison
7 Posted 05/12/2023 at 14:12:39
I think it's worrying that there are so many stories around 777 Partners and it's always about the money side of things. They seem to acquire clubs but don't seem to have their own finances to help these clubs progress.

Also, I find it strange that they want to own so many clubs in 5 different countries. Also, it's hard to see how they could possibly oversee all these clubs with the dedication that's needed.

I am sure some will point out that some Arab owners own more than one club, the difference being they have the financial resources to finance those clubs; I don't believe 777 Partners have the finances to do that.

The big problem for Everton is that our current owner is prepared to sell the club to 777 Partners provided they meet all the regularity obligations. But they have put in reportedly anything between £60M and £80M for day-to-day running, so if the Premier League rules against them being fit and proper, where does that leave Everton?

We have a £200M loan with Rights & Media Funding, and a £120M loan with MSP Capital so, if 777 Partners are ruled out of ownership, where does Moshiri go?

I read yesterday that Keith Wyness, a former CEO of the club, believes there are other American investors who would step in if 777 Partners get turned down.

Ed Prytherch
8 Posted 05/12/2023 at 15:36:47
It has been reported that the interest rate on the R&MF loan is 10% and, if the MSP loan is similar, then the club is paying £32M a year in interest payments. That will continue to grow until we turn things around which will require a massive new equity stake. More loans are not the answer no matter who the owners are.

It is easy to see why the commission decided that a fine was not appropriate punishment.

Mike Gaynes
9 Posted 05/12/2023 at 15:37:06
Brian #7, I presume this is what you read, in the Echo:

Former Everton CEO Keith Wyness says he is aware of investment groups ready to pounce should there be an issue with the sale of the club to 777 Partners.

Questions remain around whether or not 777 Partners will be able to clear all the relevant hurdles in order to acquire Everton, with scrutiny continuing over just how the deal will be funded and the business plan for the club moving forward.

Sources close to the US firm have insisted for some time to the Echo that there is confidence that deal will be closed and that 777 Partners will add the Blues to their stable of clubs, which also includes Vasco da Gama, Genoa, Standard Liege, Red Star Paris, Hertha Berlin and Melbourne Victory.

The process for a decision over regulatory approval is set to be reached before Christmas, with 777 Partners understood to have already committed £81m in loans to the club to provide working capital to enable it to meet ongoing construction costs for the new stadium at Bramley Moore Dock, as well as payroll for players and staff. The firm, the Echo has been told, could be on the line for as much as £100m by the time they take control, should, of course, they get the green light.

But there are other interested parties watching on in the background should the deal with 777 Partners not conclude with the investment firm acquiring the Blues. As reported earlier this month, the ECHO has learned of at least two separate investment firms, both American, who have an interest in making a move should the opportunity arise. Neither made a move earlier in proceedings due to the uncertainty over the independent commission decision which upheld the Premier League charge brought against Everton for a breach of profit and sustainability regulations.

The Blues were handed a 10-point deduction, although they have now submitted an appeal. It remains unlikely that any other investor would want to show their hand in the event of a deal collapse until there was greater certainty over the potential for future sanctions, and a workable deal with existing creditors, such as MSP Sports Capital, Metro Bank and Rights and Media Funding Limited.

Former Everton CEO Wyness, who was at the club from 2004 to 2009, told the Football Insider Inside Track Podcast: “If the takeover does collapse, it will be interesting to see if Moshiri can actually re-invest. I don't know if he's selling up because he has no more to give – that's one line of thought.

“What I think could be interesting is the new stadium. The cost of that stadium has caused all these problems, but it could actually end up being what saves Everton. There are investment groups out there, that I know of, who are interested in the club and in the stadium asset.

“I do think there would be last-minute deals to be done if the 777 Partners deal collapsed. I experienced this at Aston Villa when we had problems with a lack of funding from a Chinese owner. Because it was such a quality asset, there are always buyers out there. I think Everton will be the same, particularly with the new stadium.

“There will be some scary moments, but I believe a very good owner will come out of the woodwork. That's my hope, at least. The serious, qualified buyers will sit and watch and try and get the club at a lower price. That's how businesses become very successful. Particularly the American investors. There's no need to rush in at the moment – why would you? With the 777 situation, the points deduction – why would you rush in? If you're sensible then you sit and wait.”

Mike Gaynes
10 Posted 05/12/2023 at 15:51:50
What Wyness says makes perfect sense to me. If the 777 deal blows up, a sparkling jewel of an asset will be available for a bargain price. At that point, Moshiri will have no negotiating leverage at all, and a smart buyer could step in at the perfect moment.

And I continue to guess -- as always, emphasizing that I have zero supporting evidence -- that MSP is involved, either in some connection with 777 Partners, or just circling above, waiting.

I simply don't believe MSP would have put in a £100M stadium loan if they didn't fully expect to take ownership or otherwise ensure it would be a successful investment, because Moorad and Najafi are not gamblers.

Tony Everan
11 Posted 05/12/2023 at 16:32:05
“There will be some scary moments, but I believe a very good owner will come out of the woodwork.“

Think these words will turn out to be prophetic. Like Wyness and others, I can't see how 777 Partners are getting past the FCA, there's too much negativity on more than one front.

December is going to be an exciting but scary month on and off the pitch.

Brian Harrison
12 Posted 05/12/2023 at 16:38:49
Mike @10,

There was a report last week, unsubstantiated, saying that 777 Partners had approached MSP owners about joining a consortium with them but MSP apparently turned it down.

Keith Wyness didn't elaborate on who might be involved in a possible takeover if 777 failed – other than he said it was an American group. Mike, you suggest that MSP wouldn't have put in £100M if they didn't expect to take ownership, but they are reportedly getting 12% on their loan. And I suppose you could argue the same for 777 Partners, saying they wouldn't have put the money into the club if they didn't expect to own the club.

Seeing that 777 Partners are based in the USA, I would imagine you know a lot more about them than I do. So what are you hearing from your side of the pond about them — and have you heard of another consortium from the USA being interested in taking over Everton???

Vince Hindson
13 Posted 05/12/2023 at 16:45:38
If the 777 deal falls, I think that Elon Musk may just about have enough money to buy EFC and finish the stadium.

And I would love to hear him tell the Premier League to go fuck themselves.

Mike Gaynes
14 Posted 05/12/2023 at 18:16:50
Brian #12,

I know nothing about 777 Partners beyond what has been published about them (which isn't good). So I have no informed opinion about their business nous.

I do know something about MSP -- I even interviewed Moorad many years ago -- and I have great respect for their business judgement and integrity. Their (alleged) 12% return on the stadium loan won't be worth a plugged Mason Holgate if Everton goes into administration or the stadium project fails, and they know it.

So I'm quite sure they have it backstopped -- perhaps their £100M converts into equity under certain conditions -- and a backup plan behind that.

I have heard/seen nothing about what other US buyer(s) may be waiting in the wings, but as I said I have no reason to doubt Wyness's assertion that they exist. A fire-sale purchase of a distressed asset like Everton simply makes too much financial sense. Assuming we stay up and the stadium opens next winter, just think what the one-year investment return could be.

Ed Prytherch
15 Posted 05/12/2023 at 18:47:23
There will be some scary moments,

Flirting with administration?

Barry Rathbone
17 Posted 05/12/2023 at 19:59:29
Have to echo the Wyness analysis.

The club is akin to a failing old pub decrepit with rotting foundations on the verge of collapse and a mad owner advertising it as a going concern.

The land has value with a nice little donkey sanctuary attracting loads of visitors but savvy investors won't cough till the roof caves in and the owner gets real on the price.

The more you think about it, the more it looks like 777 have lost their marbles getting in now.

Paul Kossoff
18 Posted 05/12/2023 at 23:51:00
My club, Everton, are in shit street. Penny less, points deduction of ten points, which we won't get back, but just to rub it in, on an Everton fan site, another advert with Liverpool, showing how successful they are. Ian twat face Rush, and the little liar Mr cheat. Sir Jenny. Can't remember what the adverts about, trough blind rage, on an Everton fkg fan site. Take the devil's penny hey lads regardless.

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