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777 Partners Set to Acquire Majority Stake in Everton FC

777 Partners Set to Acquire Majority Stake in Everton FC

US-based private equity firm 777 Partners have reached an agreement with owner Farhad Moshiri to acquire 94.1% of his stake in the Everton FC. This deal comes after Everton’s previous negotiations with MSP Sports Capital fell through last month.

777 Partners had initially been linked to Everton back in May, when reports surfaced of a potential £600 million ($1.15 billion AUD) deal for the club. However, that agreement collapsed due to concerns over the club’s substantial debt, which stood at £141.7 million ($272.3 million AUD) in their latest financial accounts.

Subsequently, MSP Sports Capital had an exclusivity agreement with Everton for a funding deal, but that also failed, leading to renewed discussions with 777 Partners.

The transaction is slated to be finalised in the fourth quarter of 2023, subject to regulatory approvals from bodies including the Premier League, the Football Associations, and the Financial Conduct Authority.

This agreement marks the end of Farhad Moshiri’s tumultuous tenure as Everton’s owner. Despite his substantial financial injections into the club, many fans were dissatisfied with his ownership, which culminated in a toxic atmosphere at Goodison Park during the 2022-23 season as the club battled relegation for the second consecutive year.

Everton is in dire need of funding for its new stadium project at Bramley-Moore Dock, originally estimated at a cost of £550 million ($1.057 billion AUD) but now projected to cost around £760 million ($1.46 billion AUD).

Moreover, Everton faces an independent commission inquiry next month for an alleged breach of the Premier League’s financial fair play rules, adding further uncertainty to the club’s future.

In a statement, Moshiri acknowledged the changing landscape of football ownership and financing, expressing his belief that 777 Partners is the right partner to move the club forward.

However, it’s important to note that this agreement doesn’t guarantee that Everton’s challenges are over, as 777 Partners must pass rigorous regulatory tests, including the owners’ and directors’ tests. Some concerns have been raised about Josh Wander, 777’s co-founder, due to his past conviction for drug trafficking and ongoing questions about alleged fraud and racketeering.

Joe Pacinella, an analyst at GlobalData Sport, pointed out the challenges ahead for Everton, cautioning against unscrupulous investors and referencing 777 Partners’ ownership of Hertha Berlin, a club that was relegated shortly after their takeover, resulting in discontent among Hertha fans.

Everton posted financial losses for the fifth consecutive year in March, with total losses exceeding £430 million ($826 million AUD) during that period. The club also saw a decrease in annual turnover, partly due to the suspension of commercial sponsorships with Russian companies.

777 Partners, founded in 2015, is led by managing partners Josh Wander and Steven Pasko. They boast a diverse portfolio of soccer clubs worldwide, including Italy’s Genoa, Brazil’s Vasco da Gama, Belgium’s Standard Liège, France’s Red Star, Spain’s Sevilla, and Australia’s Melbourne Victory.

In addition to their sports holdings, 777 Partners has investments in various sports-related ventures, including streaming platform Fanatiz, Chilean agency 1190 Sports, women’s soccer company Ata Football, and a 45% stake in the British Basketball League.

If the takeover is successful, half of the 20 English Premier League clubs will be American-owned.

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