Everton on the brink: questions over club’s finances are more urgent than ever

Supporters of Everton Football Club have become accustomed to owner Farhad Moshiri making assurances that things will improve in the near future. Moshiri took over as owner of the club in 2016 with a pledge to provide fans with "everything I can offer", a statement he has continued to repeat over the last eight years. He has promised to secure funding for the proposed Bramley-Moore Dock stadium, sign a new top-rated forward and attract a wealthy and knowledgeable investor to the team.

During the first month of the year 2023, Moshiri had a conversation with Everton's Fan Advisory Board. He stated that he wasn't planning to sell the club, however he's been in discussions with exceptional investors to assist in financing the stadium. Moshiri claims that he's capable of funding the project himself, and they are currently finalizing the agreement.

Moving on to present times, Moshiri is not providing funding for Everton's new stadium development. Additionally, even after a seven-month effort, the US investment firm 777 Partners, which was chosen by Moshiri as buyers, has been unsuccessful in completing the takeover.

Last month, the owner made a promise to supporters that 777 was almost ready. However, on Tuesday, it was revealed that fans would need to wait longer. The US company didn't explain why they were taking so much time to find the money. This delay raises concerns about Everton's financial and football future.

The people in charge of checking the club's financial records have expressed concerns about Everton's ability to keep operating in the future. This uncertainty has raised the possibility that the team may have to declare administration. If this happens, they would face additional deductions of points in the Premier League, on top of the ones they've already received for losing large amounts of money.

Meanwhile, as the supporters anticipate, the everyday activities of the organization have been sustained by increasing amounts of liabilities.

The club and its owner have experienced a significant shift in their attitude towards finances. Just 18 months ago, Moshiri's assistants used to send out comparisons of the debts of all Premier League teams, in which Everton's net debt was noted to be £58.2 million in the 2020-21 financial year. At that time, there were 12 other clubs with higher borrowing levels.

The previous comparison doesn't seem as good anymore. According to Everton's annual report from 2023, their net debt was £330.6 million, making them behind only Spurs, Manchester United, and Brighton in that category up until June 2023, as per analysis by football finance specialist Kieran Maguire. However, the club's total debts have since increased, and they now owe around £550 million to external creditors.

Everton's main creditor is Rights and Media Funding (RMF), which operates out of Cheshire and has no staff of its own. RMF secures its funds from untransparent offshore firms and then loans the money to football clubs. Everton's debt to RMF stands at around £225m and is subject to a high interest rate of 10.25%. As a result, considerable sums of money leave the club every week.

RMF ensured its loan by obtaining property rights surrounding Goodison Park. Furthermore, their agreement includes provisions that appear to give them the ability to reject a potential acquisition by MSP Capital - a US-based sports investment group - that was proposed in the previous year. There has been no comment from either RMF or MSP on this matter.

MSP, with the help of Everton supporters Andy Bell and George Downing, is owed a significant amount of money by the club. The consortium lent approximately £160m to support the development of the new Bramley-Moore Dock stadium. This loan is secured by a charge over more than 50% of Moshiri's 94% stake in the club, and corporate filings from the Isle of Man confirm this.

Goodison Park is currently experiencing severe financial difficulties. To the extent that MSP could have held control of Moshiri's shares and consequently, the entire club on Monday. This situation arose because 777 had not been able to settle the outstanding sum owed to MSP on time as part of the takeover. Luckily, the deadline for payment has been postponed.

Additionally, there is a minor sum of money owed to Metro Bank which roughly amounts to £11 million. This debt only represents a small portion of the remaining government-funded loan that was granted during the Covid-19 outbreak.

Lastly, during the process of acquiring the club, 777 has lent a considerable sum of £160m to ensure Everton's continuation. It is anticipated that they may have to provide additional funds this month.

Furthermore, Everton has financial obligations such as compensating their players and providing upfront payments to the construction company in charge of their new stadium, Laing O’Rourke. This has been a challenge for the club, since they have had difficulties obtaining long-term funding to cover the stadium's expenses. Everton is presently believed to be compensating Laing O’Rourke in advance for their services, but the club has refrained from commenting on the next payment's deadline. Laing has confirmed that the development is proceeding as planned.

Yet, supporters' associations are concerned that the chaos cannot persist indefinitely and have a hunch that the delay in securing a fresh investor has made it more challenging to discover a viable, lasting remedy.

Last month, The Esk, a blogger who writes about Everton, claimed that the concept of investing in Everton as a successful business is becoming more and more ludicrous.

The Guardian requested a comment from Everton and Moshiri, but neither of them gave a response.

About a year and a half ago, finding a wealthy buyer for the club might have been simpler. At that time, Moshiri and his team were more open and dismissive towards inquiries about the club's financial status.

In fall 2022, a representative from the club responded to a series of inquiries regarding their finances from the Guardian. They stated that there is a clear distinction between publishing an article that serves a genuine public interest and publishing one that is only of interest to the public. As the inquiries seemed to solely concern the financial workings of the club, they did not understand how this would arise as a valid public interest. The representative spoke respectfully in their response.

Maybe it's easier to understand now.