Everton Football Club: a tragedy in four acts
The start of the new season has brought no respite for the blue half of Merseyside, whose club remains staring down the barrel of several guns.
act one: the song remains the same
In this parallel universe of sport and soap opera, the sudden jolts back to reality can hit extremely hard. Michael Jones was just 26 years old and working as a ventilation engineer at the Bramley Moore Dock when he was killed. An inquest has been opened and adjourned until the end of February, but stories such as these are always about more than such details of administration. Michael was the youngest of four, and the only boy. He was also an Everton supporter, who had been given “Goodison” as a middle name when he was born.
There was a minute’s applause for Michael in the 26th minute of the following weekend’s match between Aston Villa and Everton, held at Villa Park. It was not atypical of the gallows humour that Evertonians have repeatedly had to use as a defence mechanism in recent years when it was pointed out that the team were already 2-0 down by this point. They ended up losing 4-0, a stark reminder that this season seems likely to be at best another war of attrition.
The following Saturday came a minute’s applause before their home match against Wolverhampton Wanderers. This time, there came a 1-0 defeat. With three games played, no goals scored, and three defeats, Everton are propping up the Premier League. This is a football club built upon a house of cards, and there doesn’t seem to be anybody at the club with the skillset to put it upon firmer foundations. With the club due to start at its new stadium next season, there is a distinct possibility that Goodison Park, one of the great ancestral homes of English football, will see as its final act the end of the second-longest unbroken spell in the top flight.
As the 2023/24 season starts to lumber to life the problems are continuing to mount up for Everton, like unpaid bills behind a front door. The club is under attack from so many different angles that it’s difficult to keep track, and perhaps the most galling thing about it all is that there are no external forces to blame for the club having ended up in this condition. It is–and I should be clear here that I am talking about the owners and directors of the club and categorically not the supporters–entirely self-inflicted.
And with this club, the answer to the question of ‘where do you begin?’ is ‘how far back do you want to go?’ We could go back to the arrival at the club of Farhad Moshiri and his “main sponsor” Alisher Usmanov, to the wacky days of hiring manager after manager as if pulling names out of a managerial top hat and then lavishing money upon them to spend badly on malfunctioning parts, the identity of the squad becoming increasingly distorted as personnel from managers were layered upon the remains of those bought by their predecessors.
They were capable of occasionally throwing a double six. It remains something that, even at the distance of just a couple of years, feels as though it occurred in a fever dream, a parallel universe, or a fantasy world written by Terry Pratchett, but Carlo Ancelotti was the manager of Everton. Don Carlo. The most decorated manager in the history of the European Cup. For a year and a half. That’s a thing that happened.
Or we could go back to February 2022, Russia’s invasion of Ukraine, and Usmanov’s sudden departure from the scene. The sponsor logos came down. The sponsorship money immediately dried up, though it was later reported that Usmanov had been sitting on the interviews which resulted in, uh, Frank Lampard being appointed as the team’s manager. He was described as “one of Vladmir Putin’s favourite oligarchs” when he was added to the list of sanctioned individuals by the EU. From a purely financial point of view, this sudden and—it is to be assumed—unexpected turning off of a valuable financial tap was something of a disaster. Eight months after the end of Ancelotti’s departure, and with his successor, the spectacularly ill-advised choice of Rafael Benitez, having already been sacked, Lampard arrived at the club just three and a half weeks before the Russian tanks rolled across the border.
Lampard, and this has become something of a motif throughout his managerial career, did the bare minimum until he didn’t any more. Fuelled by six goals from Richarlison from the start of April, they stayed up with a game to spare. The guy whose goals had been so important was sold that summer. Lampard had achieved his bare minimum, but it didn’t take too long for him to stop doing it any more. Sean Dyche was appointed as his replacement 364 days after his appointment. Dyche did just enough to keep the club in the Premier League again, at the end of last season.
But there was little joy to be seen upon the final whistle at Goodison Park on the last day of the 2022/23 season, as Everton beat Bournemouth 1-0 to ensure another year of Premier League football. Relief? Yes, there was certainly relief, but that soon turned to anger and protests against the owners of the club. There certainly seemed to be precious little happiness in the air as Everton scrambled to safety and sent Leicester City down instead.
Again, this was understandable. It shouldn’t be understated, the extent to which Everton had achieved salvation by hanging on in the Premier League for another year. This was a club that looked in no way ready for the altogether different challenge of playing in a division that they hadn’t previously been a part of since almost seven decades earlier. The finances were abysmal and the ‘main sponsor’ had been forced to vacate his position and leave. The first team squad was an expensive and disjointed mess that needed money that the club didn't have to fix.
And an ongoing sense of unease that something about all this didn’t add up manifested itself when the Premier League referred the club to an independent commission over reported breaches of FFP guidelines. Premier League rules dictate clubs are allowed to lose a maximum of £105m over three years. Everton had recorded losses of £370m between 2018 and 2021.
Now, the details of the case are considerably more complex than this alone. For example, infrastructure costs such as the new stadium are excluded from any calculations. But even though the club’s statement was bullish in reply, it remains difficult to see what their ‘robust defence’ defence could be:
Everton Football Club is disappointed to hear of the Premier League’s decision to refer an allegation of a breach of Profit & Sustainability regulations to an independent commission for review.
The club strongly contests the allegation of non-compliance and together with its independent team of experts is entirely confident that it remains compliant with all financial rules and regulations. Everton is prepared to robustly defend its position to the commission. The club has, over several years, provided information to the Premier League in an open and transparent manner and has consciously chosen to act with the utmost good faith at all times.
Well, we shall see. Perhaps there is a persuasive explanation for this multiple pile-up of annual accounts over the last few years. It’s difficult to imagine what it might be from a surface reading, beyond catastrophically bad transfer policies combined with a completely profligate attitude towards money which treated FFP as though it was something that could just be waved to one side. The annual accounts for the year to the end of June 2022 followed a couple of days later, revealing a further loss of £44.7m for that season. The best that can be said about this is that it was less of a loss than the £120.9m they’d managed a year earlier. So, we shall see.
The summer certainly didn’t seem to bring any respite. Two weeks after the end of the season, it was confirmed that Ancelotti would be suing the club over “general commercial contracts and arrangements”. Just days later, it was reported that the club could face a “multi-million pound legal bill” from clubs relegated in recent seasons while they survived, should they lose their FFP hearing with the Premier League. Leicester, Leeds, Southampton, Burnley and Nottingham Forest had collectively written to the league after having taken collective legal advice, demanding that the case be heard before the end of the season. That was unachievable—this was at the end of March, after all—but a date of the 25th October was set. Nothing catastrophic, but still the continuation of a worrying trend of problems building.
Better news came with the departure of three directors of the club, announced on the same day as the Ancelotti court case was confirmed. This was considered a precursor to substantial financial investment from MSP, and it was even reported that chairman Bill Kenwright would be leaving Goodison Park “in the next 48 hours”, based on a statement from Everton themselves in which they said that a statement on “the future of the chairman” would follow “in the next 48 hours.” There was no statement “in the next 48 hours.” Instead, there was a delay of eight days before a further statement followed from the club:
“I wanted Bill to remain as our chairman during this important period of transition for the club and I am delighted that he has accepted my request to do so.”
Well, that’s awkward.
Groups protesting against the ownership warned that the protest would intensify. Just the sort of mood music you want to be hearing in the middle of the summer, before a ball has even been kicked. But Farhad Moshiri had made his decision, and this would all become irrelevant anyway, when the MSP investment people rearranged the board, wouldn’t it? Wouldn’t it?
Because somewhat lost in the noise about the fact that Kenwright wasn’t leaving was the uncomfortable question of why he wasn’t leaving. Moshiri’s statement had specifically referenced “delivering investment”, but what did that mean? MSP had already put money in as an act of faith, £40m in May. This had been talked of as a fait accompli. They had exclusivity. Was there a…problem with this further investment?
It turned out there very much was, and on the 25th August it was reported that MSP had withdrawn from talks over putting a substantial amount of money into the club in return for a minority shareholding. This, we may reasonably assume, is why Kenwright stayed. This, we may also reasonably assume, is likely why Moshiri’s previous statement had been somewhat woolly on the progress of what many on the outside had considered to be close to a done deal. The agreement had been for £150m of convertible debt, of which £100m would be toward stadium development costs, in return for a 25% shareholding in the club and two seats on the board. This was on top of the £100m that MSP had already lent to the club towards stadium costs. That £40m lent to the club in May was supposed to be repaid out of this.
act two: i never told you what i do for a living
The reason was explained as an objection from Rights and Media Funding, who have a long-standing relationship with Everton and at present a lending facility of £200m. And they in themselves are a whole other can of worms, with no web presence, two company directors, no staff and a £300m loan book on their UK company accounts, of which more than half is accounted for by Everton.
Who are these people? They’re not a conventional ‘loan company’. Conventional loan companies don’t structure their financial risk in such a way. No financial institution in its right mind would have a loan book of which something like two-thirds was loaded with one company, still less one which has been leaking money like a rusty bucket for years in the way that Everton have. They’re run out of a building called Media House, a red-brick building in the wealthy Cheshire town of Altrincham. There certainly doesn’t seem to be any secrecy going on. They’ve got a sign hanging outside with the company’s name on it.
They have two directors, David Angus McKnight and Jonathan Christopher McMorrow. McMorrow is only a director of this company. There’s little else to say about him. But McKnight is a different matter. He is 56 years old and is a director of three other companies. Randolphe & Knight Ltd is a small management consultancy company based in Macclesfield. Nothing to see here. But it’s the other two companies which are a little more interesting. Pier Capital Investments has been a dormant company more or less since its incorporation in 2012. They were called Pier 19 Ltd until 2020 and then the MCK Group Ltd until 2022.
The only significant business that Pier Capital Investments Ltd have ever been involved in seems to have been changing their name and changing who controls them. Until 2020 and that first name change, another company called Lemac Corporation (sole director: David Angus McKnight) was a ‘person of significant control’. They were replaced by McKnight personally at that point. In April 2022, they changed their registered address from one residential address to another in another Cheshire town, Macclesfield. And in September 2022 McKnight was replaced as a person of significant control by an Irish company called Pier Capital Ltd, who appear to be based in, uh, this building. Draw your own conclusions.
So if they’re a mystery wrapped inside a riddle wrapped inside an enigma, what of Lemac Corporation. Sounds impressive, doesn’t it? Well, they were incorporated in 2012 with one director, David Angus McKnight. They are also listed as a ‘management consultancy’ company. They continue to exist as a micro-company, posting accounts, the last of which didn’t look especially great (PDF). And in plain view on those accounts for 2022 is a chartered certified accountant called Drabble & Co, who seemed to be based in the same (residential) building. And if you go to their website…
Again, awkward. Certainly for a chartered certified accountancy. You probably don;t want to be associated with the words “potential security risk”, if that’s your trade.
These wormholes can start to feel infinite. Drabble & Co aren’t the only accountants based at that address. This isn’t the only name they’ve had. And the effect is an infinite-looking recursive weave of companies who on the surface do little to nothing apart from own each other and occasionally change their name. David McKnight isn’t even the only director of Rights & Media Funding Ltd. There’s also Jonathan McMorrow. He, at least, has a public profile and describes himself on LinkedIn as “a private fund manager primarily focused on the sports and entertainment industry.” He also describes himself on there as having been a dancer on Riverdance for five years, which is… something.
Welcome to the world of offshore finance, where you can spend all day going cross-eyed from the bewildering number of company names, director names and other documents that you come across. You end up so far from your original starting point that you don’t remember where you were headed with it in the first place, and it’s only when you actually circle back and try to remember what question that you were asking in the first place that you start to fully appreciate just how absurd all of this is. It’s not for me to say whether it’s set up deliberately to be baffling, but I do know enough about company law to know that if you wanted to do it more simply, you could do quite easily. Remember: this company is said to have a loan facility of £200m with Everton. Where is that money coming from?
What we do know about Rights & Media Funding Ltd is that they have been thoroughly investigated before. Their previous incarnation was Vibrac, a private lender based in the British Virgin Islands. In the 2017 book Football’s Secret Trade by Alex Duff and Tariq Panja, it was revealed that Vibrac’s ultimate owner was British bookmaker and racehorse owner Michael Tabor, who had a profitable business of lending money to clubs in England and Spain. Other names involved included British retailer Sir Philip Green, whose reputation precedes him, as well as former Everton director and Planet Hollywood founder Robert Earl.
From all of this, we can reasonably surmise two things: firstly, whoever it was on behalf of whoever the ultimate puppetmaster(s) of Rights & Media Funding Ltd may turn out to be, it’s pretty unlikely that it’ll be David McKnight or Jonathan McMorrow who nixed the MSP investment. They are names on a piece of paper. Plausible deniability. The people who take instruction from elsewhere and convey it. They, it seems reasonable to surmise, were not the decision-makers behind the decision not to allow the further MSP investment which might have given the club a chance of stabilising their finances. The other thing is that, for all this talk of Bill Kenwright, of Farhad Moshiri, of Alisher Usmanov and the host of other names that have been associated with this club over the years, it is in practical terms more or less impossible to say who actually controls Everton Football Club.
act three: this ain’t the summer of love
Meanwhile, because it can be difficult to remember that there is a football club at the heart of all this, back on the football front summer in the transfer market has passed quietly. As we might have expected, there has been something of an exodus for the club as they try to dispose of some of the detritus left behind by previous managers. Fifteen players left Goodison Park, including Asmir Begovic, Elias Simms, Tom Davies, Andros Townsend, Yerry Mina and Mason Holgate.
That this needed to happen wasn’t in a great deal of doubt. Everton’s bloated squad needed reducing. But this hasn’t been anywhere near matched by new arrivals. Their first arrival of the summer was the 38-year old Ashley Young from Aston Villa. He was followed by Arnaut Danjuma and Jack Harrison, on loan from Villareal and Leeds United respectively, and Yousseff Chermiti, a 19-year old striker from Sporting, who cost them £15m.
Three league games in, the results of such a cautious attitude in the transfer market have been clear for all to see. Everton’s two home matches so far have both ended in 1-0 defeats, with both lost thanks to second half goals. They had sixteen shots on target across these two matches and failed to score once. There’s a case for saying that this is bad luck, proof that in the narrow margins of football, the line between satisfaction and dissatisfaction can be very thin indeed.
But the other defeat, sandwiched between those two, was more troubling, because not only did Everton look as toothless as in their other matches in attacking positions, their 4-0 defeat at Aston Villa showed up glaring defensive deficiencies. It’s all very well having problems in front of goal, but that’s manageable if your defence is tight. It’s okay to concede a few, so long as you’re scoring goals as well. If you get stuck in a situation in which your defence leaks like a broken tap and your attacking is too impotent to score goals, then you’ve got a problem. After three Premier League matches, Everton have failed to keep a clean sheet and they’ve failed to score. That’s an obviously toxic combination.
How much of this is Sean Dyche’s fault? Well, there’s a difference between “fault” and “responsibility”. Well, it certainly isn’t Dyche’s fault that Everton are in the state that they’re in. Different perspectives will point to different specific points in the club’s recent history as being the seed from which everything that followed would germinate, but all can agree that these seeds were sown years before his arrival at Goodison Park.
This week has brought… better news. Beto has arrived from Udinese for £25.8m, a muscular, bustling forward who may offer hope of a fresh source of goals. And they managed their first win and their first goals of the season with him in the team, albeit in circumstances that didn’t particularly seem to improve the mood of supporters at all. Doncaster Rovers are currently bottom of League Two with one point from their first five league games and defeats already recorded to the likes of Harrogate Town and Newport County.
Despite this, they took the lead a minute from half-time at The Keepmoat Stadium in their EFL Cup match and it took two late goals from Beto and Arnaut Danjuma to scramble Everton into the next round. It was hardly the sort of performance to placate incandescent fans, even if the result wasn’t quite scraping the bottom of any barrels. A win is a win, but this was about as unedifying a performance to snatch one as could have been imagined. If Everton supporters have been becoming increasingly nervous (again) at their team’s performances over the course of their three Premier League losses so far this season, then the Doncaster showing will be unlikely to have quelled those growing butterflies. Next up in the Premier League is a trip to Bramall Lane to play Sheffield United. Expect the pressure to rise still higher, should they be unable to take anything from this game too.
act four: meet the new boss, same as the old boss
The collapse of the MSP deal seems to have pushed Farhad Moshiri back into the arms of the company that he rejected giving exclusivity to in May, but 777 Partners don’t come without controversy themselves. Managing partner Josh Wander pleaded no contest for drug offences in 2003 and has been back in court multiple times since then, while 777 and sister company Sutton Park also stand accused of multiple cases of fraud, offering illegal loans and failing to pay bills totalling hundreds of thousands of dollars.
The Government lacks the power to block investment in football clubs until a proposed new independent regulator is established, but are ready to raise the issue with the Premier League if a deal is agreed between Everton and 777. Even though they already own stakes in seven clubs including Sevilla, Genoa and Hertha Berlin, it is believed that there would be significant issues in getting them over the Premier League’s owners and directors test. The Premier League strengthened this test earlier this year by increasing the list of disqualifying events to include offences such as violence, fraud and corruption, as well as bringing in new powers giving them the right to stop individuals becoming directors if they are under investigation for these offences.
But even in the case that they can limbo under the low bar of governance that the owners and directors test offers, does this test even offer any protection to the club itself? Josimar football reported at the start of July that the other clubs in their portfolio have been absolutely haemorrhaging money over the last couple of seasons. Sevilla have lost £56.5m over the last two years. Genoa have announced losses of close to £53m for the 2021/22 season. Vasco de Gama lost just under £17.3m for the same period, while in Belgium Standard Liège lost exactly the same amount. Red Star, in the third tier of the French league system, lost just over £2m, Hertha Berlin lost £68.2m and Melbourne Victory lost £3.5m. It’s not difficult to wonder how Everton, the most financially wasteful club in the Premier League of the last decade, will fare any better whatsoever.
And taking a step back here for a moment, it’s always worth taking a breather to ask what should be the very obvious questions. If the British government, an organisation that would sign an economic treaty with the Death Star, so long as they believed Darth Vader to be good for the cash, are telling you to proceed with extreme caution, it’s worth paying attention. The alarm bells have been going off over 777 and their business dealings for some considerable time. There is no way on earth that Farhad Moshiri doesn’t already know this. The question at this stage might even be whether he thinks he’s got a choice. And does rather wrap where the club is, in 2023. From the intensely personal to the broadest possible perspective, this year has been a disaster for Everton, and the biggest worry of all is that things might not even have bottomed out yet.