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777 Partners has struck a deal to buy English football club Everton for an undisclosed sum, ending the reign of British-Iranian businessman Farhad Moshiri after a series of setbacks on and off the pitch.
The Miami-based investment fund said on Friday it had entered into a conditional agreement to acquire Moshiri’s 94.1 percent stake in the loss-making club. The deal makes 777 the latest American investor to join the English Premier League.
No financial details were disclosed, but a statement from both parties said 777’s investment would strengthen Everton’s balance sheet and guarantee ‘full financing’ of Liverpool’s new Bramley-Moore Dock Stadium. The companies said they expected to complete the deal by the end of the year.
Moshiri has made around £750m of investment in Everton but is expected to recoup only a fraction of his outlay. Football Benchmark, a consultancy, this year estimated the indebted club’s enterprise value at around £470m.
Moshiri has been looking for an investor for months as Everton’s financial problems have become more urgent. The need to raise hundreds of millions of pounds for the new stadium, which will replace the club’s historic home ground at Goodison Park, has increased the urgency of the search. He reached a deal with 777 after exclusive talks about an equity stake with the American group MSP Sports Capital failed.
The deal still needs to be approved by the English Premier League, which tightened tests for potential owners and directors in March. It will also be investigated by the English Football Association and the UK Financial Conduct Authority.
777 already has investments in seven football clubs, ranging from minority stakes to full ownership. Its holdings include Hertha Berlin in Germany, Sevilla FC in Spain, Italy’s Genoa and Brazil’s Vasco da Gama.
In July, Josimar, an investigative news outlet, asked a series of questions about past legal issues faced by 777 and its co-founder Josh Wander. 777 said the reporting was “completely misleading”, and Wander told the FT this month that his 2003 cocaine trafficking arrest, which led to him being put on probation, was “a stupid university case”. Lenders, rating agencies or regulators had not been affected, he emphasizes.
Wander told the FT this month that a “new wave of commercialisation” was coming in football, which would justify the wide range of investments the company had made in underperforming teams.
Moshiri’s tenure at one of football’s oldest clubs, meanwhile, has been fraught with problems. The club is struggling with the rapidly rising costs of the new stadium. On the pitch, the team has suffered relegation from the Premier League over the past two seasons, despite spending heavily on players under Moshiri’s ownership early on.
The threat of relegation was highlighted in the club’s latest annual accounts as a potential threat to the club’s viability.
Moshiri, a former accountant, first bought the club in 2016 and took a majority stake two years later.
In a statement, he complained that it was becoming increasingly difficult for individual businessmen who back English football clubs to compete with wealthy rival investors. These include Saudi Arabia’s sovereign wealth fund, which bought Newcastle United in 2021, and the US consortium that acquired Chelsea for £2.5 billion last year.
“The days of an owner/benefactor seem out of reach for most, and the biggest clubs now tend to be owned by well-resourced clubs. [private equity] companies, specialized sports investors or state-backed companies and funds,” Moshiri said.
Moshiri, a Monaco native, has been looking for new investors since last year after Everton cut ties with a string of companies linked to oligarch Alisher Usmanov, who is under sanctions following Russia’s invasion of Ukraine.
A trio of companies affiliated with Usmanov had sponsorship deals with the club and had a naming rights agreement for Everton’s new stadium. Moshiri and Usmanov were previously co-investors in Arsenal.
Everton currently sit 18th in the 20-team Premier League, having picked up one point from their opening four games. They are the subject of an investigation by the Premier League into alleged breaches of financial regulations.
The club posted a net loss of £44 million in the year ending June 2022, after posting a net loss of £120 million in 2020-21. In the previous two financial years, Everton posted net losses of almost £140m and £111m.
Additional reporting by Josh Noble