“Everton Backers Secure ‘Exit Clause’ as Dan Friedkin Negotiates Game-Changing £660m Deal with JP Morgan
Everton fans have been waiting for a resolution on the club’s takeover for years, with multiple potential deals falling through. Dan Friedkin’s bid to buy the club from Farhad Moshiri is one of the most recent and credible offers after previous agreements with MSP Sports Capital, 777 Partners, and Crystal Palace’s John Textor also failed. Friedkin, an American billionaire with wealth derived mainly from the automotive and entertainment industries, is expected to complete his takeover by Christmas, though this timeline depends on various factors.
This takeover is one of the most complex in Premier League history, involving numerous legal, financial, and regulatory hurdles. In addition to resolving a lawsuit involving former lender 777 Partners and their creditors A-CAP, the structure of the deal still needs to be finalized. Moshiri is unlikely to receive much in return for his shares, with Friedkin focusing on relieving the club of its growing debt and operational costs.
Recent reports indicate that the deal may take a specific form. With Everton struggling under Sean Dyche on the pitch and preparing for their final season at Goodison Park, the club is eager for clarity. Financial expert Kieran Maguire, a football finance lecturer at Liverpool University, shared insights with TBR Football about the current situation.
Friedkin is reportedly in discussions with JP Morgan for a debt restructuring deal, as the club has £660m in outstanding loans. This includes debts owed to Rights and Media Funding, 777 Partners, and A-CAP. Friedkin’s plan seems to involve consolidating this debt after repaying MSP Sports Capital and loaning Everton over £100m for operating costs.
Maguire supports Friedkin’s approach, emphasizing the benefits of consolidating debt with a reputable institution like JP Morgan. While this would provide financial certainty, it may incur short-term costs. Maguire notes that the terms of the original loan agreements could include penalties for early repayment, but Friedkin’s strong credit rating could help lower borrowing costs.
The club’s financial situation is further complicated by the upcoming move to a new stadium at Bramley Moore Dock, which is expected to open new revenue streams. However, Everton still faces challenges under the Premier League’s Profit and Sustainability Rules (PSR), and Friedkin may be impacted by ongoing legal and financial scrutiny. The club faces a third PSR hearing later this season, which could result in additional sanctions, including points deductions or fines, if the tribunal disagrees with the capitalisation of interest on loans for the new stadium.
While Friedkin may have the financial means to make a major signing in January, the Premier League’s regulatory framework, along with the challenges he will inherit, could complicate matters. Despite these concerns, Friedkin may decide to take a calculated risk, weighing the potential costs of further PSR breaches against the threat of relegation, which could have even more devastating financial consequences for the club.
