The Political Economy of Football V2

Leeds United are considering taking legal action against Leicester City in the wake of Burnley’s landmark compensation victory over Everton. Everton were ordered to pay £40m after Burnley argued they would have avoided relegation from the Premier League in 2022 had the Merseyside club’s six-point punishment for breaking Profitability and Sustainability Rules (PSR) been applied during the season of the breach and not in 2023-24.  Last week’s decision, which was handed down by an independent disciplinary commission and is the subject of an appeal by Everton, was deemed to be a watershed moment that could open the door to further action between rival clubs. Leeds are now exploring how Leicester’s PSR issues affected two of their own seasons. The first is 2022-23, when both Leeds and Leicester were relegated, and then 2023-24, when Leicester gained automatic promotion back to the top flight and Leeds lost in the play-offs.  In September 2024, Leicester won an app...

An independent commission ruled on Wednesday that Everton must pay Burnley £35.1m after their breach of the Premier League’s Profitability and Sustainability Rules (PSR) in 2021-22 was found to have given them a crucial sporting advantage. Everton stayed up and Burnley went down in that season but, four years, on there is now a big bill to settle. Everton, who said in a statement they were “surprised and angered” by the verdict, intend to fight on but the case is likely to have long-term implications. This all dates back to the 2021-22 season, when Everton were found to have breached PSR with an overspend of £19.5m. Everton finished that campaign in 16th position but, importantly in this case, Burnley ended up relegated in 18th. The final gap between the two clubs was four points. Burnley have always felt wronged, believing that Everton’s breach resulted in them enjoying an unfair sporting advantage. The claim has consistently been made, all the way back to May 2023 with the ...

At Aston Villa and Newcastle United, the internal restructuring of assets by club owners generated combined paper profits of £247million. At Everton, who still posted a loss, similar moves generated £49m. Strip those out and Premier League losses topped a billion pounds. In essence, the moving around of companies or assets within the wider group controlled by each club’s owners created accounting profits. Those profits improved the bottom lines of teams who would otherwise have each posted pre-tax deficits beyond £50million. On Tuesday, it was revealed Newcastle turned an otherwise record loss into a £34.7million profit by ‘selling’ their home stadium St James’ Park and adjacent land to a new company three days before the club’s accounting year-end date last June. The company was set up by Newcastle’s ownership group, headed by Saudi Arabia’s state Public Investment Fund (PIF). The latter point was seemingly enough to obscure, for some, what the actions of last June now mean: New...

It’s no longer just accountants who are the biggest financial service providers in football, lawyers are increasingly finding it a source of lucrative business.   It is no accident that Manchester City have some of the best lawyers advising them. The next step was likely to be private equity, already invested in clubs, taking a stake in a law firm. A boutique UK law firm behind some of the biggest football deals has taken an investment from a US private equity group, in a sign of the growing interest from private capital in both the legal and sports industries. San Francisco’s Cordillera Investment Partners has taken a minority stake in Northridge Law, whose clients include English Premier League football clubs such as Chelsea. The deal, which will give Cordillera a board seat at Northridge, comes as private capital has shown an increasing appetite to invest in professional services firms. Several legal and accounting firms have taken investments over the past two years, wi...

The Friedkin Group (TFG) has already started to look at what life will be like at Everton’s new stadium at Bramley-Moore Dock next season. To be frank, TFG would not be interested in buying the Premier League side if they were not moving into a new, 53,000-seat venue but Everton’s waterfront property will only transform the club’s fortunes if their owner can really maximise its benefits. And that means turning it into an asset that is used every day, not once a fortnight. With that in mind, TFG is looking to increase the club’s footprint at the docklands site, most likely by buying the land around Nelson Dock, which is immediately to the south of Bramley-Moore Dock, to create more space for the type of entertainment and leisure offering any venue-operator must provide these days to make the sums add up. There are also whispers — and that is all they are at present — that TFG might want to increase the stadium’s capacity at some point, which will not be easy giv...

Leicester City will avoid a points deduction after the Premier League suffered a serious blow in its enforcement of the Profitability and Sustainability Rules (PSR). The club won an appeal against a charge for an alleged breach and said the appeal board, made up of three very senior lawyers, had identified “flaws” in the Premier League rules. The club had been charged by the Premier League for breaching the PSR limit of £105million in losses over three years for the 2022-23 season, when they were relegated from the top flight. Leicester, who were promoted again last season, launched a legal challenge on the basis that the Premier League did not have jurisdiction after they had been relegated. The ruling of the appeal board means the league is unlikely to be able to take similar action against any other relegated club. The challenge was initially dismissed by an independent commission but an appeal board made up of the Rt Hon Sir Stanley Burnton, the Rt Hon Sir Maurice Kay a...

Arsenal’s £112m gross spend was their lowest since the 2018/19 season, which was not overly surprising, given that they had splashed out around half a billion pounds in the previous two seasons. The Gunners also sold well, as their £92m was the highest the club has made from player sales since 2017/18, including two Academy products, Emile Smith Rowe to Fulham and Eddie Nketiah to Crystal Palace, plus Aaron Ramsdale to Southampton. Their net spend was only £19m, which was firmly in the bottom half of the Premier League. You have to go back as far as 2012/13 for the last time it was this low. Aston Villa Villa spent big this summer, but also recouped a lot of money via player sales.The £183m gross spend was their second highest ever, only surpassed by £204m in 2021/22, and the fourth highest in the Premier League this summer. However, they set a new club record for sales with £172m, which was much more than the previous peak of £103m in 2021/22 that included the mega sale of J...

John Textor’s Eagle Football Group has made a final bid to take over Crystal Palace.  The group fronted by the U.S. businessman, which owns an existing 45 per cent stake in Palace, launched an offer which they say placed a valuation on the club “that far exceeds levels of prior investment” and would see them take full control. It remains to be seen whether Palace’s other three General Partners — chairman Steve Parish and fellow U.S. businessmen Josh Harris and David Blitzer — are prepared to sell their stakes, but Textor fears they will knock back his offer. If he is indeed unsuccessful then he is expected to renew efforts to sell his own stake in Palace — he has engaged investment banking firm Raine Group to actively seek a buyer for Eagle Football’s stake — and concentrate on acquiring fellow Premier League side Everton, with whom he has entered a period of exclusivity after talks with their majority owner Farhad Moshiri. If he is to successful...

When The Friedkin Group pulled out of talks with Everton owner Farhad Moshiri to buy the Premier League club, the two parties issued a joint statement saying they had agreed “to explore alternative options”, without explaining why the deal had collapsed. It quickly became an established fact that The Friedkin Group got cold feet because of legal uncertainties surrounding the £200million ($260m at current rates) that former Everton suitor 777 Partners has lent to the club over the last year. That bid failed to receive Premier League approval and the Miami-based firm is now in quasi-administration, while 777 and its long-term backer A-Cap are embroiled in a $600million lawsuit with a London-based firm called Leadenhall, which believes it is the rightful owner of 777’s assets, including the loan to Everton. It is a complicated situation, so it is hardly surprising that some commentators have boiled this down to saying the takeover collapsed because Leadenh...

The Friedkin group takeover of Everton has collapsed:  https://www.skysports.com/football/news/11671/13180901/everton-takeover-latest-friedkin-group-end-talks-as-toffees-now-explore-alternative-options The American investors had agreed a £500m deal to buy the club from Farhad Moshiri but withdrew on Thursday evening. Friedkin had already paid £200m to help complete the building on Everton’s new stadium at Bramley Moore Dock but dramatically decided against going through with a transaction that would have seen them purchase the 94% stake currently held by Moshiri’s Blue Heaven Holdings. It was a surprising move and left those involved in the deal shocked. The club and potential investors had entered an exclusivity period spearheaded by the Texan billionaire Dan Friedkin last month that sought to end Moshiri’s long-running attempts to sell up. The British-Iranian businessman had previously agreed a deal with 777 Partners only for that takeover to collapse in May.. It is bel...

The billionaire Friedkin family has entered exclusive talks to acquire Everton Football Club from British-Iranian owner Farhad Moshiri, in a significant step towards resolving the uncertainty hanging over the English Premier League side. The Texas-based Friedkin Group, which already owns Italian side AS Roma, had signed an exclusivity agreement and due diligence was under way, according to three people with knowledge of the matter. However, the Everton takeover process has been rocky and there is no guarantee of an agreement. A takeover would also require Premier League approval. “It’s absolutely not a done deal,” one person warned the Financial Times. Daniel Friedkin, whose net worth is estimated at $6bn by Forbes, owns Gulf States Toyota, a car distributor in the US south, and other business interests including film studios. He is known for his love of aviation, flying Spitfires and other vintage aircraft, and was Tom Hardy’s stunt pilot in the Christopher Nolan film Dunkirk. F...

The Friedkin Group, the Texas-based owner of Italian side AS Roma, has emerged as the strong favourite to buy Everton.   The company’s chairman and CEO Dan Friedkin, 59, will now decide whether to proceed and purchase current owner Farhad Moshiri’s 94 per cent stake in the club. A decision on whether to complete the deal is expected to be made in the next 24 hours. It is understood that Friedkin must come up with an initial sum of £200million which will pay off a £158million loan and provide working capital of £30million for the club. The Friedkin Group acquired control of Serie A side Roma in 2020 in an acquisition worth an estimated $700 million (£553m at current exchange rate). Under Friedkin’s ownership, Roma won the Europa Conference League in 2022, with Jose Mourinho as manager, but lost in the final of the Europa League a year later. Forbes estimates Friedkin’s net worth to be $6.2 billion (£4.9bn). His studio produced ‘Killers of the Flower ...

Everton have confirmed 777 Partners’ proposed takeover has fallen through following the expiry of the purchase agreement. The Miami-based group’s deadline to complete the acquisition of Farhad Moshiri’s majority stake passed at 5am (BST) on Saturday, with the Anglo-Iranian businessman not minded to grant another extension. A club statement read: “The agreement between 777 Partners and Blue Heaven Holdings Limited for the sale and purchase of the majority shareholding in the club expired today. The club’s board of directors recognises the considerable level of financial support 777 Partners has provided the club over recent months and would like to take this opportunity to thank them for this. “The club will continue to operate as usual, while it works with Blue Heaven Holdings to assess all options for the club’s future ownership. There will be no tears shed over the collapse of the 777 deal, but attention immediately turns to what comes next for Everton. Like it or not, th...

The American businessman John Textor is reportedly selling his 45 per cent stake in Crystal Palace with a view to buying Everton.   The period of exclusivity for the troubled 777 Partners ends on 31st May. Textor’s Eagle Football owns a 45 per cent stake in Palace but he says he has now sought the help of investment banking firm Raine to find a suitable investor to purchase the group’s share in the club.  He is looking to sell after failing to take a majority shareholding in the club amid differing views over the multi-club model in particular, with Eagle Football owning majority stakes in Brazilian first division side Botafogo, Belgian side RWD Molenbeek and Ligue 1 club Lyon. Textor said in a statement on Friday that although he is “extremely proud” of his time at the club, “an integrated sporting model, such as ours at Eagle, is simply not a perfect fit for Crystal Palace”. He added: “Based on early reaction to the process we have begun with Raine Group, it’s obvio...

Everton fans might start to think they have gone out of the frying pan into the fire with their prospective new owners, but there are no viable alternatives on offer. Everton’s prospective new owners, 777 Partners, were warned by the head of the British Basketball League (BBL) this month that the competition faced being put into “immediate administration” unless a delayed payment of £825,000 was received. The Premier League’s legal experts are studying 777’s takeover bid and the American investment company’s owners can expect to be quizzed over its financial dealings with the BBL, which it co-owns. UK Sport and the government are understood to be monitoring the situation as public funding was provided for the BBL clubs in the form of loans during the Covid pandemic. The British Basketball Federation, the sport’s governing body in the UK, has also launched a review of 777’s ownership. Everton fits perfectly into the model that 777 Partners has established for its football operat...

Everton’s prospective new owners 777 Partners will have to pay back £140 million provided by two lenders for the club’s new stadium should their deal to buy out Farhad Moshiri proceed. MSP Sports Capital offered a £100 million loan after their own attempt to acquire some of Moshiri’s shares collapsed, while businessmen Andy Bell and George Downing also put down about £40 million towards the completion of the 52,888-capacity arena at Bramley-Moore Dock. Under the terms of the deals, however, a change of ownership would mean that those loans have to be repaid and Miami-based 777 Partners are now set to request meetings with both parties in the hope of keeping them involved. While sources suggest that 777 and Moshiri are confident of a positive outcome with the creditors, any hitch would increase the financial burden on the US firm, who would have to find fresh funding for the £550 million stadium, cover Everton’s running costs and also have money for strengthening the team. Everton...

In the old days, football fans wanted a sugar daddy owner who could fund extravagant spending sprees in the transfer market to power their club to trophies. Farhad Moshiri appeared to fit the bill. The British-Iranian bought into Everton in 2016 and took majority control two years later. He invested at least £750mn into the club to start construction on a new stadium and snap up players. Except his cash never paid off on the pitch. When business partner Alisher Usmanov was sanctioned in the wake of Russia’s invasion of Ukraine, it exposed how reliant Everton had become on external capital. The club had to cut commercial ties with Usmanov-backed USM, while Moshiri’s own shares in the Russian company were put out of reach. Following months of talks, Moshiri has now agreed to sell his 94 per cent stake in Everton to Miami-based firm 777 Partners, a serial collector of football clubs. It will mark a stark change in approach. Josh Wander, 777 co-founder, told the FT just a couple o...

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 20...

 It’s time to take Josh Wander seriously. So says Wander, co-founder of 777 Partners, which is on the verge of adding a stake in Everton to its rapidly-assembled collection of football club investments any day now.  Wander and his partner Steven Pasko were unknown to the sports world when their Miami investment firm bought 15 per cent of Sevilla in 2018 but have since invested hundreds of millions of dollars in seven clubs from Hertha Berlin to Melbourne Victory. Everton — the subject of a Premier League investigation and weighed down by ballooning stadium costs — would be 777’s first Premier League team but its latest in a string of, to put it politely, financial underperformers.  As with a number of these multiclub outfits — outsiders have wondered where 777’s money came from, when will it see a return on its investment and what do American finance guys know about the beautiful game.  In a Financial Times interview, Wander said the “haters” were “absur...

Everton’s hopes of improving their financial situation have received a huge hit after MSP Sports Capital withdrew from talks about taking a minority stake in the club. The New York-based investment group signed an exclusivity agreement with the Toffees in May and the plan was to invest up to £150million ($190m) in convertible debt that would become a stake of approximately 25 per cent in the 145-year-old club. In a complicated deal, £100million of that investment was meant for Everton Stadium Development Company, the subsidiary club owner Farhad Moshiri set up in 2017 to oversee the construction of Everton’s new ground at Bramley-Moore Dock, with the rest going to the club. But that exclusivity period is now over and the deal is dead, with the stumbling block being opposition from one of Everton’s existing lenders, Rights and Media Funding Limited. Everton, currently bottom of the Premier League after losing their first two games of the season without scoring a goal, h...