Word from the government on the proposed takeover of Everton by a Florida-based investor with a multi-club system across multiple continents, an opaque funding source and a chequered history? It is, so they seem to be saying – and with no doubt some relief – a matter for the Premier League.
Although soon such thorny questions will be a matter for the government’s independent regulator to decide. Whether an entity such as 777 Partners is a suitable owner for a historic British club like Everton is the kind of monumental decision that a regulator would face at some point.
One suspects that Josh Wander, a co-founder at 777 Partners, would not have got as far as agreeing terms with current owner Farhad Moshiri had he not been confident he would pass the Premier League’s owners and directors’ test. He has a conviction for cocaine trafficking from 2003, when he was a student, although that may not even make it onto the first page of the list of concerns about Everton’s putative new owners.
Regulation near impossible
There are many across the fanbases of 777 Partners’ portfolio of European club investments who would have something to say to those deciding the fate of Everton. That is just on the on-pitch performance of their clubs under these owners. Then there are the allegations of unpaid debts, fraud, and illegal loans – all of which 777 Partners strenuously deny and in response told Telegraph Sport: “777 has always strived to conduct its businesses in line with local laws and regulations. Where it has been suggested otherwise, we will defend our reputation vigorously by all legitimate means.” Or the labyrinth of clubs and finance encompassing interests in France, Germany, Spain, Italy, Australia and Brazil.
For football regulators appointed by government or the game itself the multi-club model has made regulation and oversight of clubs near impossible.
In some quarters there appears to be a belief that a great collective of good owners, with noble intentions, deep pockets and a zeal for supporter-collaboration are out there waiting to be ushered in. A lucky few do have generous wealthy benefactors, but the truth is they are limited in number and most of the time the reality is far short of perfect.
Why clubs like Everton are targeted
There is a reason that investors like 777 Partners, and people like Wander, appear at the shoulder of clubs like Everton – in distress, heavily-indebted and in danger of relegation. The reason is that no-one else wants the burden of such a liability. For a few it represents opportunity.
That will not change by shifting regulation from the Premier League’s house to that of the government. Perhaps regulation might have stayed Moshiri’s hand as he spent hundreds of millions in pursuit of the successful team that never materialised. Maybe Everton would have benefited from stricter real-time financial controls over those years. Yet when it comes to the OADT, the Premier League’s version has about as much bite as any regulator could muster under the law.
The government has made it very clear that a regulator will not stand in the way of wealthy individuals, or indeed nation-states, when it comes to owning clubs and the attendant spending. It may well have felt the same way about Moshiri, routinely described as independently wealthy in the early years of his ownership.
The smell test
Under its new OADT, the Premier League has adopted the government list of sanctioned individuals who would be prohibited from owning a club. A glance through it suggests bad news on the football investment front for senior Al Qaeda operatives or Russian government ministers. As for those who, like 777 Partners, who may fail the smell test? There is nothing so definitive in the proposals from government.
There was much that sounded promising in the government’s consultation response on its White Paper on reforming football governance last week. Tests would be designed to ensure owners had “sufficient integrity, honesty, financial soundness and competence”. A noble intention, but the key question is: how? Wander’s 2003 drugs conviction, for instance, had a 16-year probation period, that is now spent. Is his integrity now sufficient?
What, also, about the howls of protest from fans of 777 Partners’ clubs like Red Star FC of Paris or Standard Liege in Belgium? How much weight do they carry in the consultation process to decide an owners’ suitability? This was, after all, a fan-led review of football governance.
The regulator’s proposal that owners will be required to secure bank guarantees in the case of an emergency might discourage takeovers which have limited or dubious funding sources. It is referred to in the most recent paper as the “appropriate financial resources or ‘buffers’ to enable the club to meet cash flows”.
That kind of stipulation is likely to reduce the pool of potential owners, but in getting rid of some undesirables it will also block others who might have contributed in a positive fashion. Tony Bloom, regarded currently as perhaps the Premier League’s best owner, has invested more than £400 million in Brighton. How much is he also expected to put up in additional guarantees?
Only the nation states and private equity owners, with access to significant cash assets that could satisfy a regulator, would have enough in the bank for those guarantees. The consultation paper was also light on suggestions as to how a license might be earned, instead suggesting “bespoke regulation”, applied according to whether a club was “well-run” or not. In other words: we will make it up as we go along.
The regulator will eventually be forced to make the difficult choices. Within the bounds of government policy, domestic and foreign, quite how it differs from the Premier League will be fascinating. Everton’s future is a textbook Hobson’s Choice. A buyer that raises scores of troubling questions – many of which cannot be answered within the scope of the British Government’s legal and regulatory powers. Or the alternative. A club on the brink that needs someone – anyone – to save it. Unfortunately, there is rarely an ideal option.
