Some thoughts on the Everton takeover rumours.
Firstly, the reported £400m bid doesn't make clear whether this is the price to be paid to Moshiri for his shares or whether it is the value of the business.
The distinction is important. A business valuation asks what the business is worth if it has no cash and no debt. Everton has not much of the former and quite a lot of the latter (over £1bn if you include the £447m still owed to Moshiri, which you should).
So if the £400m is the business valuation, then Moshiri will get nothing, as the £400m will be used to pay off other lenders in priority and there'll be nothing left for old Farhad, and there's even a risk the other lenders won't get paid in full (777 probably most as risk on that score). By contrast, if £400m is what they propose to pay for Moshiri's shares then there's a good chance they will also repay his debt and he will walk off into the sunset having got most of his money back - I reckon in that scenario he would "only" lose about £100m.
I think there's a good chance that the £400m is the worst of those two cases - that it's a business valuation. The reason for saying this is based on some comparable valuations. Firstly, Aston Villa's shareholder company recently did what is called an "impairment review" (basically a test to see whether the club is still worth what they paid for it) and they valued the business based on 2.5x it's turnover. A comparable calculation for Everton would value the business at £430m based on the revenue in their last accounts. And in the Forbes study of the top 30 most valuable football clubs, Everton were valued at $744m in 2023, since when things have got even worse. They don't feature in the 2024 study as it only values the top 30 clubs and they have dropped out of that list. The lowest valued club is $730m, so Forbes must think they are worth less than that, although how much less is hard to tell.
Secondly, it would be wrong for the fans to get too excited about "Saudi money" (but it would be right to be concerned about human rights records). That is unless City win their case about related party transactions. Because unless City win that case, new owners won't be able to pump loads of money in to sort out their squad as they will still be subject to PSR risk (and with the precedent that they have already been punished twice on that score). By contrast, if City win on APTs then the new owners could put all kinds of over-priced sponsorships in place as a way of pumping money in but still meeting PSR. I wouldn't be surprised on that score to see the takeover dragged out until the APT verdict is in. If I were Moshiri, I would delay the sale as I could drive a harder bargain if City win. For the record, they shouldn't, but they shouldn't have been let off by CAS either.
So the measured take on this would be that moving on from the chaotic Moshiri era would be good for the club, and they would hope that new owners would impose a measure of financial discipline and competent management of the business (much as I dislike him, I have to say Dacha has done a decent job on the football side of things).
But, as with Newcastle, a turnaround is going to take time and the fallout of the last few years of rampant mis-management is going to hang around for a while yet. And the PIF, buying into Newcastle, wasn't buying the kind of basket case that Everton represents right now. Newcastle was a club run on a tight budget and with accumulated capacity to spend a reasonable amount without troubling PSR. Obviously they spent to the max of their limits in that respect, hence the current rumours that they need to sell players.
And that's assuming this even goes through. This is Everton. Snatching defeat from the jaws of victory is a specialism.
