The General Football thread | Page 182 | Vital Football

The General Football thread

We wuz robbed, you just knew they would sneak it when it went to penalties. Bit odd putting the Chelsea guy up second when he has never scored before at England level.
 
for me we were so wasteful with passing in some phases and really slow in getting at them. They were there for the taking and we made them look like a better team. One sloppy penalty from someone who just didnt look like he even wanted to be there and we r out.
 
TQ2Spurs said:
Everton could be well in the doo doo with news that 777 Partners have missed the deadline for a takeover. Have you heard anything about the situation Ex?
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Yes, I have, but at he moment, it's not for public consumption; but some background on what might happen now is: and in my mind it will have to happen before the new season starts:


There is a type of insolvency process, which is legally distinct from administration but involves a lot of the same people doing similar things, called a ‘company voluntary arrangement’ (CVA). The clue is in the name, as this is an agreement between the creditors to accept less than they are owed. Whether to accept the deal or not is decided by a vote in which your voting power is based on how much you are owed, with secured creditors having a bigger say than unsecured ones.

CVAs are football’s preferred route out of insolvency but, whichever way you take, you are still going to be docked 12 points if you are in the English Football League (EFL) and nine in the Premier League. The EFL has done this many times over the years but Portsmouth, in 2010, are still the only Premier League club to go into administration.

So why might Everton’s board of directors, or one or more of the club’s creditors, opt for a CVA?

It would shed a lot of debt, particularly the junior and unsecured variety held by 777 and Moshiri, bringing Everton’s enterprise value down to a level that would attract interest from far more credible custodians.

There may even be a competitive auction for the restructured business, which would help creditors get back more pennies in the pound. And the moratorium — a delay — on new payment demands would give the administrators the time to really tidy the business up.

Like Bolton Wanderers, Derby County, Plymouth Argyle and many others before them, there is every chance that a leaner, stronger Everton could emerge, under new owners, ready to compete in their new home.

But an outcome that rosy does not come without thorns.

If Everton had gone into administration before the final game of last season then the nine-point deduction would have applied to the campaign just finished. Everton finished last season 14 points ahead of 18th-placed Luton. Now any Everton administration would now apply to next season — putting them on a difficult footing from the off.

Insolvency processes are also horrible. Companies in administration must break even, so administrators nearly always have to make people redundant, cancel work and turn things off.

Under football’s rules, all debts to players, other clubs and leagues must be paid in full. That is non-negotiable. Fail to do so and you lose your right to play in a league. This means that, however much money an administrator can bring in from a new buyer, a big chunk of it is ringfenced for football creditors before you even get to the creditors who secured their loans on the club’s property and possessions. They usually get most of what they are owed, too.

This means there is very little for everyone else, which will include all of the local businesses who supply Everton with goods and services. They will do well to see a quarter of what they are owed, putting many of them in danger, too. This means suppliers will be far less likely to trust Everton in future.

Then there is the very counterproductive impact of administration on a football club’s most valuable assets, the players. They can effectively rip up their contracts and look for employment elsewhere as free agents. Even if they choose not to, their value plummets, as every bidder will know the administrators need cash to pay bills and wages, including their own, and they are almost as expensive as Premier League footballers.

And finally, there is a very specific problem for Everton. Laing O’Rourke, the contractor building the new stadium, will almost certainly have a clause in its deal with the club that will enable it to renegotiate a new price for their work. This is relevant, as a large part of the 2021 contract was fixed at an Everton-friendly price. Since then, building and material costs have risen, squeezing the contractor’s margin. It would love to reopen negotiations.

So, in total, there are hundreds of millions of reasons that administration is not the preferred way out of this mess.

If main creditors take control​

Perhaps the best way to explain this scenario is that it would be like a CVA but without as many redundancies, losing nine points or paying insolvency practitioners for thousands of hours of work.

And the good news does not stop there, as this could happen in a matter of days.

First, MSP Sports Capital, the New York-based investment firm that pulled out of an earlier deal to make a gradual takeover at Everton last year, exercises its right to seize 50 per cent plus one of Everton’s shares from Moshiri for 777’s failure to repay the £158million loan they gave to Everton last summer.

Strictly speaking, it was Moshiri’s failure to repay the loan but his circumstances changed when Russia launched a full-scale invasion of Ukraine. So Moshiri wanted 777 to pick up this bill, which is why the Premier League made it part of its test of 777’s ability to fund the club. But the April 15 deadline for repayment came and went, with MSP agreeing to give Moshiri/777 until the end of the season to find the money. That deadline has now passed too.

MSP, it should be added, also secured its loan on 100 per cent of the Everton Stadium Development Company, the club subsidiary that owns the new ground. This means it could have taken control of the club and the building site four weeks ago. The fact it did not is… interesting.

It is not, however, the only lender with a fighting chance of seeing a good chunk of its money again, as Everton also have a credit facility — a credit card for companies — with Rights and Media Funding (RMF).

The Cheshire-based firm, which has no full-time employees or website, has loaned Everton about £225million secured against Goodison Park, the training ground, the club’s bank account, transfer receivables, media rights income, the contents of the club shop, whatever is in the groundkeeper’s shed and anything else.

Added together, this probably puts RMF in a stronger position than MSP in terms of security but it does not have MSP’s power to impact change, which is why they need each other. This represents a significant change in the dynamic to last year, when it was RMF’s opposition to the deal Moshiri had offered MSP that scuppered that plan.

Now, however, they are completely aligned on the realisation that all of Everton’s creditors need to take what is known in financial circles as “a haircut”, but they are having a little bit off the fringe and tidying up the back and sides, while 777 and Moshiri are getting buzz cuts.

The latter duo could, of course, say “no thanks”. But MSP and RMF could remind them that administrators’ clippers can go even shorter.

An MSP/RMF-run Everton would still need to sell Jarrad Branthwaite and Amadou Onana this summer to avoid any further Premier League charges, but the plan would be to agree debt write-offs and/or very long-term repayment schemes that would bring the amount a new owner would need to find to more like £500million.

And, just to be clear, MSP/RMF would not want to be in charge for long. This intervention would be about preparing the club for sale in a far better fashion than Moshiri managed.

Can it happen? Sure, it just needs everyone to be rational. Nothing to worry about, then. Right?
 
Textor, part owner of Palace (he wants to get out of Palace) is now asking for info, as his ambition is to own full control of a PL club...

He may be their white knight, but I expect any buyer to wait until they are forced into a CVA/admin as no one will want to pick up the full £1.2 billion of det, when they need only take on £400-500 mill.

The pressure will already be on to sell a couple of their best players quickly.
 
That's a really good insight into the situation Ex, thanks. I've been following the construction of their new stadium (I'm fascinated by the process and was an avid live cam follower of our own stadium) and the current financial issues don't appear to have had any effect on the build so far. I think there was one issue where one of the cladding providers went into administration but they have resolved that. Liverpool's Anfield Road stand expansion was affected by the main contractor Buckingham going into administration, the same company were responsible for the new stand at Craven Cottage and I believe they are still unable to fill the stand on match days due to outstanding work as a result of Buckingham's downfall.
 
TQ2Spurs said:
That's a really good insight into the situation Ex, thanks. I've been following the construction of their new stadium (I'm fascinated by the process and was an avid live cam follower of our own stadium) and the current financial issues don't appear to have had any effect on the build so far. I think there was one issue where one of the cladding providers went into administration but they have resolved that. Liverpool's Anfield Road stand expansion was affected by the main contractor Buckingham going into administration, the same company were responsible for the new stand at Craven Cottage and I believe they are still unable to fill the stand on match days due to outstanding work as a result of Buckingham's downfall.
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totally agree - amazing report - well done SpEx
 
Short update:

i've been told two cash bidders are already at the seller's gates; they apparently want a more realistic sale price to stop the necessity to go to either a firesale of assets or CVA etc. Seems to have a ring truth about it...but until confirmed is entirely speculative imho.

Either way, it would seem the PL will set a deadline for the middle/end of July before taking mandatory action.
 
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