Finance expert shocked after 777 Partners’ Everton investment pitch is emailed to him – ‘Proceed with extreme caution’
777 Partners’ pitch to investors for the purchase of Everton looks like a “glorified timeshare” and those approached should proceed with “extreme caution”, according to Kieran Maguire.
The football finance expert from the University of Liverpool said on The Price of Football podcast (9 November) that he had been emailed the pitch, possibly by accident, and seen that the prospective new owners were framing the situation “as if they’d already bought the football club”.
He was shocked by how “persuasive” the whole plan had been made to look with a £600million turnover highlighted across 777’s worldwide stable of clubs, with the inconvenient fact that a number of those clubs were losing “huge amounts” of money absent from the 70-slide deck.
Maguire said (20m 30s): “We know that the potential buyers of Everton Football Club are 777 Partners, and it turns out they have been pitching to investors with regards to trying to persuade people to part with cash.
“They’ve put together a very smart and slick presentation and somebody, perhaps it was somebody from 777 who made an error, somebody emailed it to me.
“So I’ve had a look and I’ve gone, ‘Blimey! That looks very persuasive.’ There’s a lot of management speak in it, lots of talk about digitalisation and monetisation and alternative methods of engagement.
“The way that they’re pitching it, it’s as if they’ve already bought the football club and it had joined the stable. It was saying, ‘We now have so much revenue coming in from all our footballing investments’.
“My response is we’ve got a saying in the world of finance – ‘Turnover is vanity, profit is sanity’. So they’ve got this figure of £600m of revenue, of turnover.
“What they’ve failed to do is say that those clubs they’re invested in, some of which they only own minority stakes, are actually losing huge amounts of money, probably the best part of £200m in a year.
“The fact that there’s 70 slides, that didn’t get in. Yes I know they’re trying to sell [the pitch] but it really came across to me as a form of glorified timeshare.
“As with all investments, proceed with extreme caution and do your own background research.”
Presumptive
Clearly anyone in a position to be investing large sums into a Premier League football club should check out the claims made themselves and perhaps it is standard for the whole picture to be selectively highlighted.
Whether the fact that 777 appear to be framing the acquisition as one that has already been done is wishful thinking or suggests they have been given an indication that the relevant authorities are satisfied is as yet unclear.
Given what sounds like a very charitable assessment of the profitability of their entire footballing operation, with the positive figure front and centre but the negative accompanying one absent, it might all just be part of the sales pitch.
And since sources close to the company have claimed that the negative views around the Miami-based outfit are based on misconceptions on how they run, with co-founders Josh Wander and Steve Pasko supposedly using all their own money, it is worth questioning why they need to raise a lot of cash from investors at all.
The process appears to be plowing ahead despite regular warnings from sources such as Josimar, The esk, and more moderately from Maguire.
Perhaps all of them have got an incomplete picture of the situation and their doubts will prove to be unfounded, but it is difficult to escape the feeling that 777’s plan may have a chance of working but comes with a significant possibility of going sideways.
In other Everton news, a “very alarming” update on the situation has third parties eagerly awaiting a takeover collapse and administration for the club.