MSP Sports Capital could increase any potential Everton investment into a controlling stake of the club in the future, according to a football finance expert.
The New York-based group have reached an exclusivity agreement with owner Farhad Moshiri as they explore investing in the Toffees. Moshiri has openly been seeking fresh funds to help finance the construction of the club’s new stadium at Bramley-Moore Dock.
MSP Sports Capital already have shares in several football clubs including Bundesliga side Augsburg, Spanish outfit AD Alcorcon, Portuguese club G.D. Estoril and Belgian team Beveren. Meanwhile, co-founders Jahm Najafi and Jeff Moorad were in attendance at Goodison Park to watch Everton’s 2-1 loss to Southampton in January.
Kieran Maguire, a football finance lecturer at the University of Liverpool, explained how MSP will initially have no voting power and the money they inject will be ‘convertible debt or convertible shares’. But the American group down the line will want representation on the board of directors in the future.
And with Everton losing more than a combined £400 million in the past four years, Moshiri could look to sell more of his stake down the line - and MSP may have the option to buy further shares.
Speaking on his podcast The Price of Football, Maguire said: “From what I understand, talking to sources, is they’re going to put this money in into convertible debt or convertible shares. Initially, MSP Sports Capital will have no voting power in terms of shareholders are concerned and however they’re going to get the money across, interest is going to have to be paid by Everton on that.
“It’s going to be used to fund the stadium but also, as part of the deal, we can anticipate some major changes at boardroom level as far as Everton Football Club are concerned - with MSP looking to have two people on the board of directors and are effectively looking for a fresh broom.
“Everton have lost an awful lot of money in recent years and in due course, those loans or preference shares will convert into ordinary shares - traditional voting shares which will give MSP around 20-25% of Everton.
“I suspect then there will be a conversation between MSP and Farhad Moshiri around a conversation how he sees his future relationship with the club because he has come in for a fair amount of criticism from Everton fans and there have been eyebrows raised about his historic relationship with (Russian oligarch) Alisher Usmanov who was banned from coming into the UK six months before Russia invaded the Ukraine - at that point he had his assets frozen.”
Maguire continued: “There is a pathway for MSP increasing their involvement and we have seen similar at Leeds United. We got the 49ers [Enterprisers] investment funds who have a substantial investment with an option at some point of taking more than 50% and, therefore, taking operational control over the club.
“Farhad Moshiri has put a lot of money into the club and will be looking at getting the money out but it’s been a pretty rocky relationship in terms of the quality of the decision-making. That’s why Everton are looking nervously over their shoulder in terms of this weekend trying to get the points to avoid relegation.”