Everton takeover likely to be lengthy

Any takeover of Everton by the American investment firm 777 Partners is likely to be a lengthy process while the Premier League ensures that no rules on club ownership will be broken.

There are numerous issues for the Premier League to consider concerning 777 and new rules on leveraged buyouts will apply after they were brought in for this season.

777 Partners already has majority or minority stakes in several clubs, including Genoa in Italy, Hertha Berlin in Germany, Vasco da Gama in Brazil, Standard Liège in Belgium, Sevilla in Spain and Red Star in France.

Those close to the process accept that the Premier League’s rules are considerably tougher than in other countries, and its lawyers will have to sift through a number of legal claims that have been made against the company and its subsidiaries, as well as a drugs case involving the co-founder Josh Wander who admitted in 2003 to having cocaine sent to him through the post.

He was placed on a probation that expired in 2018 and 777’s advisers who are working on the takeover do not believe it would lead to him failing the owners’ and directors’ test. Wander has been in advanced talks with the Everton owner Farhad Moshiri over a full takeover by 777 and it is understood an outline agreement could be close. Moshiri has been the club’s majority shareholder since 2016 and stands to make a loss on the £750 million he has invested in the club

The Premier League will also require proof that there is enough funding to sustain Everton and that if loans are being used to finance the takeover they are less than two-thirds of the value of the club.

777 has investments in more than 60 companies across a range of business activities, including budget airlines. Based in Miami, it was established in 2015 by Wander and Steven Pasko, and offered litigation funding — it would fund legal actions and cover lawyers’ fees in return for a big chunk of any settlement received.

Many Everton fans are unsure about the takeover, given the struggles of other clubs under 777’s control

Another company set up by the pair in 2010, called Sutton Park Capital, operates as an aggregator of “structured settlements”, where people who have been awarded damages over a long term hand over the rights to the full sum in return for taking an amount of cash immediately.

The investigative website Josimar reported in July that two legal actions brought by women who agreed settlements with SuttonPark are ongoing and that 777 is facing another legal action for operating an illegal loans business.

777 responded to Josimar by saying it had had “positive impacts on the projects of airlines, clubs and communities supported by the group”.

It added: “From disrupting an aviation market monopolised by traditional airlines, to introducing low-cost travel, to supporting numerous football clubs to achieve tournament access and financial sustainability under their watch, 777 Partners remains steadfast in its commitment to making a positive impact to the communities in which it conducts business.”

Nevertheless, some Everton fans look at the experience of other clubs under 777’s control and question whether there is any evidence that the takeover would be a positive move.

Hertha Berlin were relegated from the Bundesliga last season and have a £34 million loan to repay at high interest, Genoa were also relegated but have won promotion back to Serie A, while Vasco da Gama remain heavily in debt to the tune of £130 million and are struggling in the Brazilian league.

Last month Wander told the Financial Times that 777’s goal was “to be profitable by next season” across its portfolio of clubs. It has also been pointed out that most of the teams have only recently been taken over by the investment company.

“We have a strong view that there’s a new wave of commercialisation coming to football,” he said, declining to comment on Everton but noting that the Premier League had done “a very good job relative to the other leagues of commercialising their product”.

This posts urges fans to be cautious and not to jump at the chance of getting rid of Farhad Moshiri: https://www.goodisonnews.com/2023/09/13/everton-finances-to-be-hamstrung-by-777-as-multi-million-news-emerges-from-italy-amid-advanced-talks/