The deal
US-based private equity firm 777 Partners has signed an agreement with Everton owner Farhad Moshiri to purchase 94.1% of his stake in the English Premier League club.
Go deeper with GlobalData
The deal comes after Everton resumed talks with 777 after a proposed investment deal with MSP Sports Capital fell through last month (August).
777 Partners was first linked to the club in May when it was reported the company was close to completing a deal to purchase the team for £600 million ($752.1 million). However, that deal collapsed due to the firm not being prepared to pay a ‘significant’ price due to the debt on the club’s balance sheet, which stood at £141.7 million in the latest accounts.
After pulling out of the proposed deal, MSP Sports Capital reportedly reached an exclusivity agreement with Everton over a funding deal, but that too failed, allowing discussions to resume with 777 Partners.
The transaction is expected to close in the fourth quarter of 2023 and remains subject to regulatory approval, including from the Premier League, the Football Associations, and the Financial Conduct Authority.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWhy it matters
The deal brings an end to Moshiri’s turbulent time as custodian of Everton, which saw large sections of fans unhappy with his ownership despite him pumping more than £750 million into the club.
The mood inside Goodison Park had become so toxic that the British-Iranian businessman and his fellow board members were unable to attend home matches in the final months of the 2022-23 season amid the club’s relegation battle for a second successive year.
The club desperately requires funding for its new stadium on Bramley-Moore Dock, which was initially under construction at a cost of at least £550 million but has increased to about £760 million.
Meanwhile, next month (October) Everton will go before an independent commission for an alleged breach of the Premier League's financial fair play rules, which threatens to plunge the club into more turmoil.
In a statement, Moshiri said: “The nature of ownership and financing of top football clubs has changed immeasurably since I first invested in Everton over seven years ago. The days of an owner or benefactor are seemingly out of reach for most, and the biggest clubs are now typically owned by well-resourced private equity firms, specialist sports investors, or state-backed companies and funds.
“I have been open about the need to bring in new investment and complete the financing for our new stadium at Bramley-Moore Dock, which I have predominantly financed to date. I have spoken to a number of parties and considered some strong potential opportunities. However, it is through my lengthy discussions with 777 that I believe they are the best partners to take our great club forward, with all the benefits of their multi-club investment model.”
However, the agreement does not mean Everton’s woes have ended and 777 Partners is not guaranteed to pass the increasingly difficult regulatory approvals, otherwise known as the owners’ and directors’ test.
Some have suggested that Josh Wander, 777’s co-founder, could struggle to pass the test due to his 2003 conviction for drug trafficking and questions remain about alleged fraud and racketeering.
Joe Pacinella, analyst at GlobalData Sport, said: “Everton’s time under Moshiri ends with misery and gloominess, as the club find themselves in the worst position they’ve ever been in.
“The blue side of Merseyside has a passionate fanbase who have made their opinions on Moshiri clear. Despite all the money spent in the last seven years, the lack of direction and poor planning has plunged the club into a position where their Premier League status is under threat and should serve as a warning for 777 Partners.
“Unfortunately for Everton fans, the new takeover of their club comes with some controversial background, with 777 Partners having fought lawsuits involving fraud allegations over the years through its investments in budget airlines and accusations of kidnapping and personal injury. Wander has also been arrested three times but only charged once.
“Therefore, despite the end of Moshiri’s stint at Everton coming as a positive to most fans, the Merseyside club will want to avoid unscrupulous investors, as they seek to bring positivity to a depressing outlook.
“777 Partners also own German club Hertha Berlin who were relegated last season a few months after the takeover, having endured a bad run of form. The Hertha fans haven’t been shy in their disapproval of their new owners, and Everton fans will only hope their club doesn’t experience the same fate.”
The detail
In March, Everton posted financial losses for a fifth successive year, with their losses totaling more than £430 million over that period. In their latest accounts, the club had an annual turnover of £181 million, down from £193 million, having suspended commercial sponsorship agreements with Russian companies in March 2022.
Russian billionaire Alisher Usmanov, who had his assets frozen by the European Union following Russia’s invasion of Ukraine, has a 49% stake in USM Holdings, which sponsored Everton’s training ground. Moshiri and Usmanov are long-time business partners.
777 Partners, meanwhile, was founded in 2015 and is led by managing partners Wander and Steven Pasko. They boast a vast portfolio of soccer clubs around the world with Hertha becoming the most recent addition in March.
The group’s multi-club network also includes Italy’s Genoa, Brazil’s Vasco da Gama, Belgium’s Standard Liège, France’s Red Star, Spain’s Sevilla, and Australia’s Melbourne Victory.
The private equity group, which has made targeting undervalued global soccer assets a key component in its development strategy since 2015, also has investments in streaming platform Fanatiz, Chilean agency 1190 Sports, women’s soccer company Ata Football, and a 45% stake in the British Basketball League.
If successful, the takeover would mean half of the 20 top-flight English clubs are American-owned.
Commenting on the possible takeover, Wander said: “We are truly humbled by the opportunity to become part of the Everton family as custodians of the club and consider it a privilege to be able to build on its proud heritage and values.
“Our primary objective is to work with fans and stakeholders to develop the sporting and commercial infrastructure for the men’s and women’s teams that will deliver results for future generations of Everton supporters.
“As part of this, we are committed to partnering with the local community over the long-term, working on important projects such as the development of Bramley-Moore Dock as a world-class stadium venue, allowing thousands more Evertonians to attend our home matches and contribute to the economic and cultural regeneration of Merseyside.”
Further reading
The Business of the Premier League 2023-24
Soccer is fundamentally unbalanced, and the lack of unpredictability is harming the sport
