The proposed sale of Premier League soccer team Everton FC to a Miami-based holding company has stalled after the firm, 777 Partners, failed to provide audited financial statements to the British government regulator that must approve the deal.
The regulator, the Financial Conduct Authority, sent its request this month to 777 partners, according to multiple people with direct knowledge of the approval process, who spoke on condition of anonymity because they were not authorized to discuss it publicly. . If the company does not provide requested financial details or an acceptable explanation, its proposed takeover of Everton – a deal that includes an estimated debt of hundreds of millions of dollars and a coveted spot in the world’s richest football league – could fall apart.
The missing document is the most significant complication yet in 777 Partners’ attempt to join Everton in a collection of high-profile but financially troubled teams over the past two years.
Failure to close the deal could have serious consequences on Everton’s financial viability, with the Premier League founding member struggling with the ongoing costs of a half-built new stadium, debts of more than $500 million and projected annual losses. $100 million. Everton’s financial situation is so bad that the club requires millions of dollars monthly to continue operations, recently also receiving a multi-million dollar loan from 777 Partners.
“Out of respect for the process, 777 Partners will not comment on the ongoing regulatory approval process for the proposed acquisition of Everton FC,” the company said in a statement.
Everton’s current owner, Farhad Moshiri, on Monday dismissed concerns about any interference or the suitability of 777 Partners as Everton’s custodian. “They are extremely professional and deliver exactly when they say they will, and I anticipate that they will receive all of their regulatory approvals and proceed to completion on the timetable we have set.” he told Sky Sports News,
When it announced in September that it had reached an agreement for a controlling interest in Everton, 777 Partners said it expected to complete its acquisition by the end of the year. That timeline now looks doubtful.
To approve the sale, the 777 partners would have to convince not only the Financial Conduct Authority but also the Premier League and the Football Association of England that it would be what they would classify as a “fit and proper” manager of the 145-year-old club. Are.
But those bodies are dissatisfied with the financial statements provided, according to multiple people familiar with the process and a review of related documents. In particular, they are uneasy about 777 Partners’ failure to provide the latest audited financial records for a holding company whose subsidiaries include not only the famous football teams of Belgium, Brazil, Germany and France, but also structured finance. Also includes investments. , insurance, media and aircraft leasing.
Audited records are not the only obstacle to approval of the Everton sale. Officials are also asking the firm run by its owners, Josh Wander and Steve Pascoe, to provide details of the source of funding behind the acquisition.
These questions echo concerns that Belgian football officials raised last year when they were considering whether to grant a license to Standard Liège, another of the company’s teams. In those discussions, 777 Partners told the Belgian Soccer Federation’s licensing committee that it could not provide the firm’s most recently audited accounts – any evidence of the suitability and soundness of the businesses financing teams in the country’s top league. A regular requirement in assessment.
Ultimately, the prospect of one of the biggest teams in Belgian football being kicked out of the league was deemed unacceptable by the committee, and a compromise was reached. Now, 777 Partners finds itself in the same situation, and the clock is ticking again.
While 777 Partners is focused on completing its purchase of Everton, current and former employees have questioned its feasibility. Four people familiar with 777’s operations said the company, which has expanded rapidly since it was founded in 2015, was missing regular payments to businesses, vendors and partners, including brokers working on some football deals. Are.
One person said the firm, which Mr Wander recently claimed had 3,000 employees, has missed parole on at least two occasions. Current and former employees have also reported that bonus payments, a major component of some executives’ compensation, have not been paid.
777 Partners said Tuesday that “all contractually guaranteed bonuses have been paid,” but acknowledged a separate incident this year in which it failed to pay an electricity bill for its headquarters, a spokesperson blamed miscommunication. Attributed to a mistake.
Should 777 Partners provide a full picture of its finances to British regulators, they will likely find that most of 777’s soccer adventures have been funded by a single company, A-Cap. A long-time lender to 777 Partners, A-Cap is the largest investor in many of 777’s businesses, including football investments.
For example, a unit of A-Cap loaned most of at least $25 million to Everton after the deal to buy the team was announced, two people familiar with the matter said. At 777 Partners, the reliance on A-Cap money – loans now total at least $1 billion – has grown so large that 777 Partners regularly updates A-Cap executives about continuing business plans. What is required to be done, according to the people with direct knowledge of the situation.
The relationship between the firms is so entangled that last year 777 Partners provided A-Cap with a $9 million loan to acquire a beachside apartment in one of Miami’s wealthiest neighborhoods. Officials at 777 Partners declined to comment on the arrangement. A-Cap did not respond to an email seeking details of its relationship with 777 Partners.
Questions about 777 Partners’ finances and its football ambitions have had no impact on its chief Mr Wander. He was recently elected to the board of the European Club Association, an influential group of European football’s top teams.
That board seat was highlighted in a prospectus prepared by 777 Partners to raise even more capital for its soccer business. The group hopes to raise about $250 million by the end of the year to help finance the purchase of Everton, which, without a new owner or new capital, risks bankruptcy.