The Friedkin Group (TFG) has completed its takeover of Everton, ending the Premier League club’s long search for new ownership.
TFG agreed to purchase outgoing majority shareholder Farhad Moshiri’s 94 per cent stake in Everton back in September, and has now received the regulatory approval needed to complete the move. Formal confirmation that the deal could go ahead came on Wednesday from the Premier League’s independent oversight panel.
As previously reported by The Athletic representatives from TFG are in the UK and will be at Sunday’s Premier League match with Chelsea at Goodison Park.
The deal will see Roundhouse Capital Holdings Limited (Roundhouse), an entity within TFG, officially own the club with Marc Watts installed as executive chairman.
“Today marks a momentous and proud occasion for The Friedkin Group as we become custodians of this iconic football club,” Watts said in a statement. “We are committed to leading Everton into an exciting new era both on and off the pitch. Providing immediate financial stability to the club has been a key priority, and we are delighted to have achieved this.”
The takeover ends Anglo-Iranian businessman Moshiri’s association with the club that dates back to 2016.
“I truly believe that the transaction with The Friedkin Group is the best outcome for the club and its future success,” Moshiri said. “I now hand over to new owners confident in the outlook for the club and that our incredible fans will see the success on the pitch that they so thoroughly deserve.”
Dan Friedkin, the chairman and CEO of TFG is proposed to be chairman of the board while Watts will be responsible in his role for the management of the club. Ana Dunkel, TFG’s chief financial officer and Colin Chong, the club’s interim CEO, will also serve on the board. Additional appointments will be made in the coming weeks, the club say.
“We are proud to be the new custodians of your club. Together, we will usher Everton into a new era, one that is marked by ambition and professionalism,” Friedkin said.
“As stewards of Everton, we look forward to showing our commitment to the club through actions, not words. We believe there are exceptional people working in the club. The resilience and commitment shown to get through a challenging period in Everton’s history has been inspiring to see and provides a great foundation for us to build on.”
While no sums have been disclosed, Moshiri will walk away having made a significant loss. He will receive a small, undisclosed amount on completion of the takeover and there will be a number of deferred payments as part of the deal.
Due to recent news around the treatment of associated party transactions, Moshiri will turn around £450million ($571m) of shareholder loans into equity in Everton.
As part of the takeover agreement, TFG will significantly reduce the debt burden at the previously cash-strapped club. It has committed to paying off the £200m owed to American insurance firm ACAP via a series of instalments, and refinancing a further £150m owed to another lender, Rights and Media Funding, on long-term, low interest rates. TFG’s own loans to the club, which initially totalled another £200m but have since risen by the tens of millions in recent months, will now be treated as a mix of equity and long-term senior debt, secured against the new stadium. Having bought Moshiri’s 94 per cent stake and converted their debt into equity they own 99.5 per cent of the club.
Everton were initially lent the money by 777 Partners last season when the controversial Miami-based group was looking to complete its own takeover of the club. But that move fell through when 777 was unable to meet the necessary conditions needed to complete the deal, with its debt position subsequently assumed by one of its major creditors, ACAP.
ACAP and 777 have been the subject of court proceedings in New York, with British firm Leadenhall alleging they were double pledged assets as collateral. TFG reached an agreement with ACAP over its debt but the takeover needed assent from Leadenhall and the court. That case is ongoing in New York, with ACAP previously describing Leadenhall’s claims as “baseless”.
Approval from the Premier League, the Football Association and the Financial Conduct Authority, the three other bodies that sign off on such transactions, was always viewed as a relative formality.
Run by owner and CEO Dan Friedkin, Houston-based TFG made money through its subsidiary Gulf States Toyota before branching into other spheres including film and entertainment, and posted revenues of over £10bn ($13bn) for the last financial year.
In completing its takeover of Everton, TFG has succeeded where many before had failed. Alongside 777, fellow Americans MSP Sports Capital and the KAM Group also saw talks with Moshiri break down. TFG initially entered exclusivity over a takeover of Everton over summer but then pulled out due to various concerns, including over the ACAP debt.
TFG now adds a Premier League club to its growing sports portfolio, which also includes Italian side Roma and AS Cannes of the French fourth tier.
The move ends years of uncertainty at Everton, who have been operating with a patchwork interim board and operating under significant financial constraints during the long takeover process. With Moshiri’s wealth having dried up and a costly new stadium project left to partially fund, debt soared and the club scrambled to pay bills. Servicing the interest on short-term loans became increasingly problematic.
Moshiri, a former minority shareholder at Arsenal, arrived at Goodison Park in 2016 promising to return the nine-time champions of England to former glories. He spent around £800m in total, but his tenure has been wasteful and turbulent. After a significant initial outlay, resources dried up notably after Russia’s invasion of Ukraine.
Sponsorship deals with the sanctioned oligarch Alisher Usmanov, previously a close associate of Moshiri’s, had to be suspended and then cancelled. Everton responded by selling key playing assets including Richarlison and Anthony Gordon, but the product has been three successive relegation battles as well as two breaches of profitability and sustainability rules (PSR).
TFG arrives with Everton 16th in the Premier League table and looking to avoid a fourth-straight relegation battle. The task in front of them remains significant, but their arrival promises a new dawn.
(Top photo: Tony McArdle/Everton FC via Getty Images)
