Over £430million in losses over five years, significant funding required for their new stadium and the threat of relegation – Everton Football Club’s immediate future looks bleak.
The Toffees, who are teetering a point above the Premier League relegation zone, have two games left to secure their top-flight status, and it has even been suggested they should go into administration if they went down to the championship.
But despite another miserable season amid warring fans and managers, the parties remain interested in investing in the historic Merseyside club, ranging from a minority stake to a full takeover by owner Farhad Moshiri.
Asked about any potential investment in the club on Thursday, manager Sean Dyche said: “I don’t need to be kept informed of anything at this stage.
“Mr. Moshiri said some time ago that he was looking for new investments. At the moment, I don’t need to know more about it.”
A report on Wednesday suggested Everton were set to be sold in a deal worth around £600m which could even be completed by next week. But sources have told BBC Sport nothing is imminent and a deal is highly unlikely to happen before the end of the season.
We take a look at what lies ahead for the Toffees.
Does Moshiri need to sell?
Since the first purchase a stake of 49.9% in 2016, then become majority shareholder, British-Iranian businessman Moshiri has invested around £750million of his own money in Everton, and the club have around £225million in external debt.
In their latest accounts, Everton have recorded financial losses for a fifth consecutive year. Their losses totaled more than £430m over that period.
Despite this, Everton chief executive Denise Barrett-Baxendale said the club remained “in a secure financial position” thanks to Moshiri’s “continued support and commitment”.
After Russia invaded Ukraine in February 2022, Moshiri resigned of the board of directors of the Russian company USM Holdings – which sponsored Everton’s training ground – and severed ties with Alisher Usmanov, who partly owned the company.
In February, Moshiri told the supporter advisory council the club was ‘not for sale’ but he had spoken to ‘top real quality investors’.
What are the main considerations for investors?
Potential investors should consider three main factors:
- Construction of the new Bramley Moore Dock stadium is well advanced but not yet complete and requires funding.
- The managerial carousel in recent years and the threat of relegation for a second straight season point to a struggling team requiring significant investment in the player squad.
- THE referral to an independent commission by the Premier League for an alleged violation of the rules of financial fair play, therefore of the possible sanctions which could be imposed.
Everton, denied any wrongdoing and said they were “ready to vigorously defend” their position.
What happens with any investment?
BBC Sport reported earlier this month that Everton were in talks over a new investment. They continue.
Several parties have spoken to the club, but it appears two main US competitors are the most interested – Miami-based 777 Partners and New York-based MSP Sports Capital.
777 are believed to be in pole position as they are interested in a full takeover and have access to the “data room” (financial accounts), but are not willing to pay a “meaningful” price as they have reviewed the debt on the balance sheet – which stood at £141.7 million in latest accounts.
They would also have to take on more debt to finance the new stadium, with costs increase from an original £500m to around £760m.
MSP, meanwhile, is reportedly seeking a 25% stake with a preferential share structure, not the equity in the club, would therefore be repaid in interest.
Last year, Everton entered investment talks with Maciek Kaminski. He was granted a period of exclusivity, but the Polish-American real estate mogul backed out of talks in January and BBC Sport understands they were unable to provide proof of funds.
Analysis – Could Everton go into administration?
Dr Dan Plumley, Lecturer in Sports Finance at Sheffield Hallam:
“I don’t see it that way, although it’s been talked about. What tends to happen from an investment perspective is that if a full takeover of Everton were to happen, it would be a cheaper acquisition as a Championship club, maybe an investor would then buy them at a cheaper price, which would be part of the mix.
“Based on the overall figures, the financial performance and position of the club is not great and relegation would be a big blow, but I don’t see any administrative problem coming up in the immediate future.
“They should consider investments to strengthen their position, but despite some figures in the accounts, there is optimism on this front.”