George Overhill

Thu 14 December 2023 7:10, UK

Kieran Maguire has admitted he is getting “twitchy” over the news that Everton have now received over £100million in new debt from prospective owners 777 Partners with the takeover still not sorted.

The University of Liverpool sports finance expert said on The Price of Football on 14 December that he is concerned that the club are using long-term finance to serve short-term needs and with “no noise” from the Premier League about giving 777 the green light to buy the club it increases the chances of there being an “issue” if they are denied.

Maguire is also worried that in order to supply these unsecured loans 777 is reportedly borrowing money themselves from a company called A-Cap, who typically lend at “credit card rates” of around 20%, which he calls “not good at all”, meaning there is an uncomfortable situation building up in the background of the great form on the pitch.

Maguire said (10m 50s): “With regards to 777 Partners there isn’t any noise coming from Premier League HQ with regards to approving a takeover and effectively a buy-out of Farhad Moshiri. By all accounts 777 have now put in over £100m, and this is where I get a bit twitchy.

“I have no issue with football clubs borrowing money. People say that debt’s bad but hold on, I’ve got a mortgage, you’ve got a mortgage, that’s debt… if debt is used for a long-term strategic part of the club’s development then I have no issue whatsoever.

“What makes me slightly twitchy in relation to Everton is I think that a lot of the money has been utilised to pay the wages and the day-to-day running costs of the club, and using long-term finance to get you over short-term financial stresses, that isn’t good. You match short-term lending to short-term needs and long-term lending to long-term needs.

“We don’t know enough with regards to these loans from 777 but we understand they’re unsecured. If somebody’s lending money to a company in financial stress which is unsecured the first thing I’d be asking is, ‘Are they charging interest?’

“There’s reports coming in… that 777 themselves are borrowing money from a company called A-Cap and they’re normally lending at 20% [interest], and you go, ‘Well that’s credit card rates and that is not good at all.’

“If the Premier League comes to the conclusion that it doesn’t have enough faith in 777 as prospective owners does 777 then say, ‘Right, we’re throwing our toys out of the pram and we’re going to take our money back’? Because if so then there’s an issue.

“Under those circumstances I think the fear is if Everton can’t pay those debts what’s the next step? And we start to get into uncomfortable territory. Nobody wants to see a club going into administration. Is Farhad Moshiri now going to find the money?…

“So just as Everton are doing fantastically well on the pitch and the fans are united, which is good, you’ve got this irritant in the background.”

Eyes closed and hope for the best

It’s nothing new that the off-field situation at Goodison Park prevents fans from resting easy, even as Sean Dyche and the players are helping insulate them from fears that relegation will contribute to it.

With conflicting reports coming in still on whether 777 are set to get the go ahead of the league authorities to take over it could still apparently go either way.

Since it seems anything but unanimous that they are in line to complete the deal it does seem to be very ambitious of both them and Everton to have worked out the current monthly funding arrangement if it is in hope more than expectation.

As Moshiri clearly either can’t or won’t fund the shortfall between costs and income each month, thought to be around £20m-a-time, it suggests the club doesn’t have much of an alternative just to keep the lights on.

But if 777 are themselves borrowing at high interest rates in order to do so then they may be storing up their own problems if they don’t get the answer they want from the Premier League.

A previous report from The Times (7 December) suggested the unsecured loans mean the Americans will be stuck at the back of the queue of creditors in the event of administration, or Everton settling their debts in more comfortable circumstances.

If that is the case it should avoid the more immediate potential difficulties of them trying to take their money back and pushing the Toffees into administration that Maguire is concerned about, and would make the current arrangement quite the “good faith and commitment” show.

But given 777 have reportedly indicated they aren’t prepared to continue to do so beyond January might suggest they are also starting to get “twitchy” about the set-up, and potentially also about their hopes of completing the takeover.

In other Everton news, a manager expects talks to be on the cards after admitting he has made one Toffees reject angry.