When it comes to Dan Friedkin’s takeover of Everton, it is a matter of when and not if. However, with the club crying out for reinforcements in the January, the ‘when’ could be crucial.
After months of talks and logistics, Friedkin has agreed to take over from Farhad Moshiri in a deal that is believed to value the club at around £500m.
Moshiri himself is unlikely to see a penny of that sum, with the capital instead going towards clearing Everton’s debt.
Farhad Moshiri, owner of Everton looks on from the stands prior to the Premier League match between West Ham United and Everton FC at London Stadiu...
Photo by Alex Pantling/Getty Images
There are still a number of hurdles to clear, however.
The one that has occupied the most headspace for Everton fans in recent weeks and months is the outstanding legal case involving former takeover suitor 777 Partners.
777 lent Everton around £200m as part of their attempts to buy the club, but that debt has since been claimed by A-CAP following 777’s liquidation.
AS Roma President Dan Friedkin is seen during his arrival at Ciampino Airport on August 29, 2023 in Rome, Italy.
Photo by Luciano Rossi/AS Roma via Getty Images
A-CAP are now the targets of a lawsuit from London-based finance firm Leadenhall, who have made the £200m loan subject to an injunction.
Though this is no way Everton’s fault, it has complicated the timeline for Friedkin’s takeover.
It has emerged in the last few hours that A-CAP have been handed an ’emergency order’ which, per journalist Paul Brown, dictates that they should “cease writing new business”.
The implications for the Everton takeover are not entirely clear, although those initially consulted by TBR Football have tentatively suggested it will not alter the chronology a great deal.
The expected takeover date? According to several outlets, The Friedkin Group expect the deal to be completed by the end of the month.
Everton takeover timeline assessed by finance expert
To gauge how likely it is that Friedkin will indeed be in situ in time for the January transfer window, TBR spoke to Liverpool University football finance lecturer and industry insider Kieran Maguire.
“It’s a demanding deadline but it still can be achieved,” he said.
“The Friedkin Group had already done substantial background checks before they pulled out of the original offer to buy Everton. Therefore, they don’t have to do that again.
“The major challenge is the 777-Leadenhall issue. You need someone to sign off on those and reduce the risk. It all comes down to risk.
“If that happens, I think it could be a very happy Christmas for Everton fans.
“The bills will be paid and the core issues and they can start to address the core issues in terms of how the club is run.”
Dan Friedkin and Farhad Moshiri resolve £21m PSR issue
Once in place, Friedkin has a major decision to make about the future of Sean Dyche, whose Everton side are now five without a win and two points above the bottom three.
And their next five fixtures paint a bleak picture.
So will the new owners be able to spend in January? It would certainly help either Dyche – or, potentially, his replacement – to resolve the issues that have best the team in recent weeks.
PSR, or Profit and Sustainability Rules, have been the major concern in this department in recent years, with Everton’s huge financial losses acting as an anchor in the transfer market.
They have slightly more flex this season, however, after a £41.5m loss in 2021-22 dropped out of the three-year PSR calculation, replaced by what is expected to be a more modest deficit in 2023-24.
Profit and Sustainability Rules explained. PSR used to be known as FFP, or financial fair play.
After Moshiri’s pledge in tandem with Friedkin this week to capitalise £451m of ‘soft loans’ (interest-free shareholder loans), the Toffees can be confident of avoiding another PSR hit in that department.
Soft loans are now treated as a form of subsidy following Man City’s successful challenge to the Premier League’s APT rules, meaning a commercial interest rate will be applied for the purposes of PSR.
Infographic explaining the Premier League's Associated Party Transaction (APT) rules
As TBR revealed last week, means Everton would have taken a £21m hit if Moshiri had not converted the debt into equity.
That in turn would have severely limited their PSR headroom ahead of January and their ability to operate in the transfer market.
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