The Premier League faces pressure from concerned senior figures in Government over Everton’s potential sale to United States firm 777 Partners.
Farhad Moshiri is in advanced negotiations with the private investment group about ending his turbulent seven-year tenure as majority shareholder.
No final agreement has been reached, but Whitehall sources have expressed doubt about 777’s suitability for ownership.
The company has faced allegations of fraud, offering illegal loans and failing to pay bills totalling hundreds of thousands of dollars in the US. Co-founder Josh Wander, who set up the company in 2015 with Steven Pasko, also faced drug charges to which he pleaded no contest in 2003.
In response, the company told Telegraph Sport: “777 has always strived to conduct its businesses in line with local laws and regulations. Where it has been suggested otherwise, we will defend our reputation vigorously by all legitimate means.”
A source close to the company added that “all cases cited have either been closed, dismissed or are being contested as baseless”.
However, if Everton now agree on a deal, the claims, first reported by the Norwegian magazine Josimar, would be explored by the top tier’s strengthened directors and owners’ test. The league announced in March new “Disqualifying Events”, which “include offences involving violence, corruption, fraud, tax evasion and hate crimes”.
“A new power for the league to stop those who wish to become ‘Directors’ when they are under investigation for conduct that would result in a ‘Disqualifying Event’ if proven,” the rules also state.
Figures within Government underlined they would be reluctant to directly intervene, with an independent regulator already looming over the game. Another official maintained a possible sale of Everton is not a matter for ministers. However, as illustrated during the politically-charged takeovers of Newcastle and Chelsea in recent years, ministers have been known to make their feelings clear behind the scenes.
Farhad Moshiri
Moshiri is understood to be facing the prospect of leaving Everton with a fraction of the money he invested CREDIT: Getty Images/Ian MacNicol
Talks between Iranian-British businessman Moshiri and 777 stretch back months, but have intensified in recent weeks after an alternative minority investment deal with MSP Capital collapsed.
One source close to talks suggested a deal could be agreed this week, although another well-connected insider later played down the likelihood of an announcement being imminent. Both insiders suggested that Moshiri would remain open to a potential rival bid emerging.
The club has been valued most generously at just short of £600 million in recent months, but Moshiri is understood to be facing the prospect of leaving the club with a fraction of the money he invested. Insiders underlined there are still final hurdles to be cleared. “A deal is close but we still need to get it over the line,” said one source close to talks.
A deal would mean that half the Premier League’s 20 clubs would be backed by American money. Everton and 777 have declined to comment but the American firm has been steadily growing its investments in football in recent years, with clubs in South America and Europe.
Wander says 777 has more than doubled the squad value at Genoa, having funded the club back into Italy’s Serie A. Other clubs include Vasco da Gama in Brazil, who won promotion last year. Hertha Berlin, another investment, were relegated to Germany’s second tier, however.
For the proposed Everton deal, 777 is being advised by Tifosy Capital & Advisory. Negotiations emerged less than a month after MSP Sports Capital walked away from an exclusivity agreement to buy a 25 per cent stake in Everton.
Under the terms of a prior deal by Everton, Rights and Media Funding Limited demanded “high tens of millions” from MSP before a penny went into the club. Instead of buying a stake in the club, MSP instead agreed over a £100million loan which would support the construction of Everton’s new ground at Bramley-Moore Dock. It is not clear how that loan will work should 777 agree terms on a club takeover.
Moshiri’s ownership at the club has grown increasingly turbulent in recent years. His former business partner Alisher Usmanov was a major sponsor for the club but the Uzbek-born oligarch was added to the UK’s list of sanctioned individuals after Russia’s invasion of Ukraine. Everton insist that the club’s connection to Usmanov is now non-existent.
Darlington
This season, Everton have lost three of their opening four Premier League fixtures, and there have been bitter complaints about the team’s failure to recruit adequately over the summer.
The club is also preparing to appear before an independent commission on October 25 over its alleged breach of financial fair play rules. Executives have been confident they will prove they are compliant over charges which are understood to relate to a tax issue surrounding loans for the club’s new stadium. Everton have denied wrongdoing and said they were “prepared to robustly defend” their position.
Cumulative losses over the past five years now amount to more than £430 million. Under Premier League rules, clubs are permitted losses of up to £105 million over a three-year period, but Everton blamed the Covid-19 pandemic for part of the losses.
Chief executive Denise Barrett-Baxendale, chief finance and strategy officer Grant Ingles and non-executive director Graeme Sharp all left their boardroom roles at the end of last season.
Bill Kenwright has remained as chairman, however, at Moshiri’s request. Cheshire-based Rights and Media Funding Limited have a loan facility with the club that extended to £200 million this year.
Ben Peppi, sports commercial expert at JMW Solicitors, said a deal to buy Everton “does come with considerable challenges to face: the debt, stadium development and the very real threat of relegation makes for a risky investment”.
“However, staving off relegation, completing the new stadium, refinancing debt and returning Everton to where they belong does make for a very attractive investment proposition given the scope to grow,” he added.
