Everton Football Club’s potential takeover by Miami-based investment firm 777 Partners seems to be in jeopardy as the company has enlisted the help of restructuring experts to navigate various operational challenges. The decision comes after 777 faced numerous lawsuits, allegations of fraud, and the collapse of its Australian airline Bonza. Mark Shapiro, a senior managing director at B Riley Advisory Services, has been appointed as 777’s interim chief operating officer, along with two colleagues taking on governance roles. B Riley Advisory Services, known for its expertise in turning around failing companies, will assist 777 in resolving its operational issues.
The move to bring in external expertise indicates that 777’s primary focus is now on survival rather than expanding its portfolio of football clubs. Currently, 777 owns or co-owns Genoa, Hertha Berlin, Melbourne Victory, Red Star, Sevilla, Standard Liege, and Vasco da Gama. Don Dransfield, the former chief strategy officer at City Football Group, serves as the chief executive of 777’s football operation and has assured players and staff at Red Star and Standard Liege that there is enough cash to fund the clubs in the short term. However, Dransfield’s main objective will be to find a buyer for all of these clubs, potentially another investor interested in a multi-club group. It is highly unlikely that Everton will be included in this group.
Back in September, Everton owner Farhad Moshiri agreed to sell his 94.1% stake in the club to 777, believing them to be the ideal partners to propel the club forward. However, the deal is still pending regulatory approval from the Financial Conduct Authority, Football Association, and Premier League. Despite an expected timeline of 12 weeks for approval, the process remains unresolved after eight months.
The Premier League holds the most significant power in approving the deal and has set four financial conditions for its approval. The repayment of a £158 million loan taken out by Moshiri from another U.S. investment firm, MSP Sports Capital, is the most crucial condition. The deadline for repayment has passed, with MSP granting 777 until the end of the Premier League season to find the funds. However, recent events have overshadowed this deadline.
Bonza’s collapse into administration has left numerous staff members without pay, further complicating 777’s financial situation. Additionally, London-based investment firm Leadenhall has filed a civil lawsuit in New York, accusing 777 of operating a “giant shell game” or even an outright Ponzi scheme. Leadenhall alleges that 777 and its associates borrowed $350 million from the firm using collateral that either did not exist, was not under their control, or had already been pledged to another lender. 777 has refrained from commenting on these allegations due to ongoing litigation.
In conclusion, 777 Partners’ attempt to purchase Everton Football Club seems to be on hold as the company faces significant operational challenges and legal issues. The appointment of restructuring experts reflects 777’s focus on survival rather than expanding its football club portfolio. Don Dransfield will concentrate on finding a buyer for all of 777’s clubs, excluding Everton. The Premier League’s approval of the deal remains pending due to financial conditions, including the repayment of a large loan taken out by Farhad Moshiri. Recent events, such as Bonza’s collapse and the lawsuit filed by Leadenhall, have further complicated the situation. The future of the potential takeover remains uncertain as 777 Partners works to navigate its current crisis.