The Friedkin Group are working towards taking full control of Everton before Christmas
On Monday it was confirmed that The Friedkin Group had agreed a deal to acquire Everton. The work for what comes next has already begun.
US billionaire Dan Friedkin’s company returned to the negotiating table in recent weeks having remained in dialogue with the Toffees and their creditors due to its position as a lender to the club after taking on the £200m loan from MSP Sports Capital that needed to be repaid during the summer.
Everton owner Farhad Moshiri entered into a period of exclusivity with The Friedkin Group, and while sources close to the firm were clear that the club was “very investible” there were too many concerns around the £200m-plus debt that sat on the balance sheet from 777 Partners, the Miami-based investment firm whose attempts to purchase Everton fell apart at the end of May as a series of legal issues threw them into crisis.
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But those issues, while not completely removed, have been eased after The Friedkin Group agreed a deal with A-CAP, long-time lenders to 777 Partners, that would give them an extra layer of assurance when it comes to live litigation in a New York civil court between 777 Partners, the defendant, and London-based Leadenhall Capital Partners, the plaintiff. The case revolves around allegations of ‘fraudulent’ practice to gain financing for 777 operations.
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The takeover process is now moving at pace after an agreement was reached. Moshiri wants to leave as soon as possible, and The Friedkin Group want as much time as they can to make an impact at the Toffees this season.
The approval in relation to the A-CAP agreement is expected to be accepted in the New York civil case, and the main hurdles will now be the regulatory process that The Friedkin Group must go through, needing to pass the Premier League’s owners and directors test, an FA test, and gain approval from the Financial Conduct Authority.
There isn’t anticipated to be any hitches in obtaining those approvals given the significant wealth of Friedkin and the revenue-generating power of The Friedkin Group, which comes to some $11bn annually. Friedkin is also a member of the European Clubs Association board, and has his time as AS Roma owner, where he remains in charge, as a testament to his suitability to own a football club.
Everton is a unique opportunity, and The Friedkin Group identified that as soon as the 777 Partners deal fell away. North American sports team owners know the value of new stadiums and the potential that it has to grow revenues and add value. Having a venue that can be an asset throughout the year and not just on matchdays is vital in the modern game, and that is something that Everton just haven’t had with Goodison Park, which while steeped in tradition had many commercial limitations.
The new 52,888-seater stadium on the banks of the River Mersey where Everton will call home from the start of next season may have been something of a financial millstone around the club’s neck in recent times, but it is ultimately what has made them appealing despite a balance sheet chock with debt and a seasons of heavy losses and on-pitch struggle.
In Rome, The Friedkin Group have been finding out the hard way how tough it can be to get business done in Italy. The owner before them, another American in Jim Pallotta, had been frustrated in his attempts to build a new stadium, while AC Milan owners RedBird Capital Partners continue to work towards securing a move away from the San Siro. But it is a long process. The Friedkin Group want to move from the Stadio Olimpico, but while they have unveiled plans for a stadium in the Rome neighbourhood of Pietralata, it will likely be a tough slog to see it to completion.
With Everton they have had that work done for them, although there are significant repayments to be met due to the amount of debt used to fund its construction. The prospective new owners may well make the most of an improving outlook with regards to interest rates to try and restructure some of that debt to bring down repayments and interest.
The club’s commercial team, throughout the tumult of various takeover bids and punishment for breaching financial controls by the Premier League, have continued to work towards maximising the commercial opportunities that exist with the new stadium ahead of beginning their journey there for the start of the 2025/26 season.
A stadium naming rights partner is yet to be found, with talks around that ongoing, but the club have announced several ‘founding partners’ and have been clear with their vision for the hospitality and retail element of the stadium, something that will yield far greater financial returns for the club moving forward, something that will allow them to increase what they can spend on investing in the product on the pitch, which has for some time had to cope with an austere approach due to profit and sustainability rules concerns.
The sooner new owners are in situ, focused on the long term, and the club moves on from the constant feeling of everything being temporary, the better it will be for ensuring that the stadium has its potential maximised.
The Friedkin Group, and Friedkin himself, will have access to potential commercial partners through other business interests in the portfolio or strong relationships that have been established over a hugely successful time in business.
The Friedkin Group’s core business has been selling cars in the southern states of the US, with Gulf Toyota, which The Friedkin Group owns, selling $9.1bn worth of Toyotas in 2022. That, as well as the premium brand of Toyota, Lexus, would make them a standout to be a frontrunner when the club seeks to engage with an ‘official automotive partner’.
When it comes to making the most of an opportunity and capitalising on the potential to gain new fans and reach a wider audience, storytelling is key.
One only needs to look at the way that Hollywood actors Ryan Reynolds and Rob McElhenney have made the League One side globally relevant through the Disney+ documentary ‘Welcome to Wrexham’ to see the power that telling a story to an audience has.
With the US a key market for growth for Premier League clubs due to the heightened interest in football and English football’s top tier, especially with the World Cup in North America less than two years away, winning the battle for attention of potential new fans is an important focus.
The Friedkin Group has an entertainment investment company in its portfolio, 30West, as well as ownership stakes in production companies such as NEON and Imperative Entertainment, a company that produced the Martin Scorcese epic ‘Killers of the Flower Moon’.
Having new owners with a strong track record and respect across various industries will likely embolden potential commercial partners who may have been reluctant given recent struggles, to engage with Everton on different levels, potentially opening up another layer of commercial possibilities for the club.
Leaning on relationships and experience is key for any ownership group taking over at any club. But few opportunities exist in world sport like Everton, where there is the chance to completely change a club’s mindset due to a once-in-a-lifetime move. It is an opportunity that needs to be guided by those with the vision for the long term and not bound by short termism. The hope will be that this deal has arrived to truly maximise something that reshape Everton and its direction for years to come.
