The valuation of Everton Football Club might be somewhere in the £500-600 million range, but the debt hanging over the club’s neck like the proverbial sword of Damocles has reached the £1 billion milestone now, as reported by the Daily Mail.
With United States-based 777 Partners currently indicating their intention to takeover the club by purchasing Farhad Moshiri’s 94% stake, Everton is at a crossroads. Construction at the Blues new home on Bramley Moore Dock is continuing unabated, but there have been recent reports that despite word of a fixed-price £555 million contract with contractors Laing O’Rourke, the overall cost has gone up by at least £200m.
Then there’s £200m owed to shadowy firm Image & Media Rights, said to be owned by British bookmaker and billionaire Michael Tabor. Spread out over six loans between 2016 and 2022, the interest on those loans is rumoured to be at 12% and the club paying about £460,000 a week back per week on those.
Meanwhile, £490m in shareholder loans is owed to Moshiri along with £140m to MSP Sports Capital. MSP’s attempt to purchase the club earlier this year was sunk interestingly enough by IMR, who do have the right to demand they are paid back first before any new debt is taken on.
Finally there’s a £20m loan to 777 Partners as well, but things could get more complicated with the American investment group getting sued last week back home for alleged large-scale fraud. 777 are yet to show that they have the financial wherewithal to handle the billion pounds of debt, and if found guilty then the sale is pretty much off. The Premier League, Football Association and Financial Conduct Authority meanwhile are all conducting their due diligence on the bid from 777.
Other sources closer to 777 indicate that they do have documentation to show they can handle the crippling debt and expect the sale of the club to proceed despite the litigation procedures back in the US, as well as reports of payments being missed to the British Basketball League which they sponsor and another team in the group’s portfolio Vasco Da Gama apparently not making their scheduled transfer payments last month either.
While Everton continues to veer from one extreme to another on the pitch, off the pitch things have been equally rocky it looks like — as sure a sign of a football club in crisis as you will ever find.