Sport nationEverton Football Club’s proposed takeover by American investment firm 777 Partners has hit a snag after reports emerged of the company’s ties to Russian oligarchs. The Premier League is currently investigating 777 Partners as part of its approval process for the deal, which was agreed to in September 2023.
According to investigative football journalism outlet Josimar, 777 Partners has done business with Oleg Boyko, a Russian oligarch who was sanctioned by Ukraine, Canada and Australia in 2022 for his alleged close ties to Vladimir Putin and the Kremlin. Boyko reportedly provided a $10 million loan to 777 Partners in 2018 that helped fund the firm’s first foray into club ownership with Spanish side Sevilla FC[1].
In addition, one of 777 Partners’ founding members, Wayne Boich Jr., has links to another Russian oligarch, Gennady Timchenko, through a coal mining deal in 2011[4]. Timchenko has long been accused of having close ties to Putin and was sanctioned by the U.S. in 2014 after Russia’s annexation of Crimea[4].
These revelations have raised concerns about 777 Partners’ suitability as owners of a Premier League club. The league’s owners’ and directors’ test aims to ensure that only “fit and proper” custodians are allowed to take control of its teams. The emergence of 777’s Russian connections will likely be a red flag for the Premier League.
Doubts over 777’s finances and business model
Beyond the Russian ties, there are also growing doubts about 777 Partners’ financial health and ability to sustainably run a football club. Reports have surfaced of the firm missing payments, having its credit rating lowered, and facing allegations of fraud and predatory lending practices in some of its other businesses[8][16].
777’s takeover of Everton was originally expected to be completed by the end of 2023. However, nearly six months later, there are still no signs of progress. The continued delays have fueled speculation that 777 is struggling to raise the necessary funds to close the deal, which is reportedly worth over £500 million[5][11].
Everton is in a precarious financial position and needs a well-capitalized owner to stabilize the club. The Toffees have posted record losses in recent years and are relying on 777’s loans to fund operations and stadium construction. So far, 777 has provided around £150 million to keep Everton afloat[8]. But if the takeover collapses, that money would be added to the club’s already substantial debt pile.
Some football finance experts have questioned the viability of 777’s multi-club ownership model[16]. The firm has quickly assembled a portfolio of seven teams across Europe and South America. But most of those clubs are financially stressed and may require continued subsidies from 777. Generating a return on investment could prove very challenging, especially if Everton’s turnaround doesn’t go to plan.
Pressure on the Premier League
The 777 Partners situation puts the Premier League in a difficult position. After the controversial Saudi-led takeover of Newcastle United in 2021, the league has faced criticism that its owners’ and directors’ test is not stringent enough. Approving the sale of Everton to a firm with Russian business ties would invite further backlash.
At the same time, blocking the takeover would leave Everton in a desperate state. The club needs an injection of funds to compete on the pitch and complete its new stadium. If 777 walks away, Everton could face the real prospect of administration or relegation.
The Premier League finds itself conducting its investigation against the backdrop of impending government regulation. A new independent regulator for English football is set to be established by the end of 2023. One of the regulator’s key roles will be to administer a strengthened owners’ and directors’ test. Any misstep by the Premier League in the Everton case will only increase the pressure for reform.
Uncertain future for Everton
For Everton supporters, the 777 Partners takeover has become a source of great uncertainty and concern. After years of upheaval and underperformance under current owner Farhad Moshiri, fans are desperate to see the club put on a stable footing. But the drip-drip of negative headlines surrounding 777 has dampened any initial enthusiasm for the change in ownership.
On the pitch, Everton are facing a second consecutive relegation battle. The team currently sits 17th in the table, just one point above the drop zone. The club’s finances are also in a perilous state, with the threat of a points deduction still looming if found to be in breach of the league’s profitability and sustainability rules.
The completion of Everton’s new 52,888-seat stadium at Bramley-Moore Dock has been held up as the key to securing the club’s long-term future. But the £500 million project is now at risk of being derailed if 777’s takeover falls through.
As things stand, Everton and its supporters can only wait anxiously for the Premier League to complete its investigation into 777 Partners. The outcome will have major implications not just for the Toffees, but for the governance of English football as a whole. The pressure is on the league to make the right call and protect the integrity of the game.
Citations:
[1] https://www.reddit.com/r/Everton/comments/1bdw3tx/the_russian_connection_777_partners_has_done/
[2] https://www.sportspromedia.com/news/777-partners-cfo-resigns-everton-premier-league-takeover/
[3] https://www.mayerbrown.com/en/insights/publications/2023/05/sanctions-weekly-update-ukraine-russia-conflict-may-8-2023
[4] https://josimarfootball.com/2024/03/13/the-russian-connection/
[5] https://www.sportspromedia.com/news/everton-777-partners-takeover-ownership-funding/
[6] https://www.bloomberg.com/news/articles/2023-05-11/uk-fintech-borrowed-from-firm-backed-by-tycoon-with-concerning-ties-to-russia
[7] https://www.youtube.com/watch?v=jOs3CgXCCYk
[8] https://theathletic.com/5194664/2024/01/12/everton-takeover-football-west-brom-news/
[9] https://www.international.gc.ca/world-monde/issues_development-enjeux_developpement/response_conflict-reponse_conflits/crisis-crises/ukraine-sanctions.aspx?lang=eng
[10] https://twitter.com/JosimarFotball/status/1767913903772611061
[11] https://www.forbes.com/sites/mikeozanian/2023/11/26/777-partners-still-reportedly-scrounging-for-cash-to-buy-everton-fc/?sh=6f6bd45f208c
[12] https://www.forbes.com/sites/giacomotognini/2022/03/01/tracker-in-depth-look-at-48-russian-billionaires-hit-by-sanctions/?sh=6f629a957365
[13] https://twitter.com/EvertonNewsFeed/status/1767922553442480300
[14] https://www.reuters.com/sports/soccer/everton-acquired-by-us-private-equity-firm-777-partners-2023-09-15/
[15] https://www.ctvnews.ca/politics/oligarchs-politicos-and-putin-meet-the-russians-canada-has-sanctioned-1.5810889
[16] https://www.linkedin.com/pulse/10-777-partners-everton-controversies-jason-stephens
[17] https://www.bloomberg.com/news/newsletters/2023-11-09/everton-fc-sale-777-partners-takeover-is-premier-league-s-biggest-test
[18] https://apnews.com/article/everton-sale-777-partners-03aa0b571d19c034efbaa7d10adb00ac
[19] https://www.skysports.com/football/news/11671/13083187/proposed-new-everton-owners-777-partners-to-meet-premier-league-in-next-fortnight-as-takeover-process-drags-on
[20] https://royalbluemersey.sbnation.com/2024/1/8/24030608/everton-takeover-latest-777-partners-premier-league-approval-owners-and-directors-test-wander-pasko
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