Skip to main content

Administration risks at Everton

There was a discussion on Radio 4 this morning of the risks of Everton FC going into administration involving a minority shareholder whose name I did not catch.

It does seem to me that this is a worst case scenario and if it did happen someone would come into purchase the club as a distressed asset at a knockdown price, even given the cost of completing Bramley Dock.   There would, of course, be an automatic 10 point deduction penalty.

Bloomberg reported a few days ago that main financial adviser, Deloitte LLP, is scrambling to find new backers to save a takeover of the struggling club by US investment firm 777 Partners amid fears that the deal could collapse, according to people familiar with the matter.

Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line, the people said, asking not to be identified because the information is private.

The current preference is to attract a partner for 777 instead of getting an entirely different bidder who would need to go through the whole process from scratch, including clearance from the Premier League, one of the people said. The club isn’t currently seeking rival bids because it is bound by an agreement with 777, though the situation could change, the person said.

777 has held talks with private markets investor Blue Owl Capital Inc. about arranging a £360 million ($445 million) loan tied to the club’s new stadium, Bloomberg has reported. One requirement of any Premier League approval is that 777 repays a £158 million loan to a group of investors led by MSP Sports Capital, a rival sports investor. The loan was due to be repaid earlier this month, but 777 sought an extension, a person familiar with the matter has said.

“In missing the debt deadline for the MSP loan, 777 highlighted it has cash-flow issues,” said Kieran Maguire, lecturer in football and finance at the University of Liverpool. “The markets consider 777 to be high risk, so lenders are either asking for high rates of return or just walking away.”

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...
Post a Comment
Read more