Moshiri (left) and Kenwright (right) have gone through a turbulent period — will things get better now? Photo: Martin Rickett/PA
Government news of a proposed takeover of Everton by a Florida investor with a multi-club system on several continents, an opaque source of funding and a checkered history? This, they seem to say — and no doubt with some relief — is a Premier League matter.
Although such pressing issues will soon be resolved by an independent government regulator. Whether an organization like 777 Partners is the right owner for a historic British club like Everton is a monumental decision that the regulator will have to grapple with at some point.
Many suspect that Josh Wander, co-founder at 777 Partners, would not have gone so far as to agree terms with current owner Farhad Moshiri unless he was confident he would pass the Premier League's owners and directors test. Hepleaded no contest to cocaine trafficking charges in 2003 while he was a student, although it may not even have made it to the top of the list of problems facing Everton's would-be new owners.
Regulation virtually impossible
There are many fans of 777 Partners' European club investment portfolio who have something to say to those who decide Everton's fate. This only applies to the gaming activities of their clubs under the direction of these owners. There are also allegations of unpaid debts, fraud and illegal loans — all of which 777 Partners categorically denies and responded by telling Telegraph Sport: “777 has always strived to conduct its business in accordance with local laws and regulations. Where requested otherwise, we will vigorously defend our reputation by all lawful means.» Or a labyrinth of clubs and finances, covering interests in France, Germany, Spain, Italy, Australia and Brazil.
For football regulators, whether appointed by the government or the game itself, the multi-club model has made regulating and overseeing clubs virtually impossible.
There seems to be a belief in some quarters that a large body of good owners, noble intentions, deep pockets and eagerness to cooperate with supporters is waiting to be manifested. A lucky few do have generous wealthy benefactors, but the truth is that their number is limited and in most cases the reality is far from ideal.
Why clubs like Everton are targeted
There's a reason why investors like 777 Partners and people like Wander appear on the shoulders of clubs like Everton — in distress, with large debts and under threat of relegation. The reason is that no one else wants to take on the burden of such responsibility. For some, this represents an opportunity.
This will not change if regulation is moved from the home of the Premier League to the government. Perhaps regulation could have stopped Moshiri's hand as he spent hundreds of millions chasing a successful team that never materialized. Perhaps Everton would have benefited from stricter financial controls in those years. However, when it comes to OADT, the Premier League's version has as much edge as any regulatory body can legally muster.
The government has made it clear that the regulator will not stand in the way of wealthy individuals or even nation states when it comes to club ownership and associated costs. It is quite possible that the same was felt about Moshiri, who in the early years of his ownership was usually described as an independent rich man.
Smell test
Under the new OADT, the Premier League has approved the government's list of sanctioned individuals. who will be prohibited from owning a club. A quick look at 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, may fail the smell test? There is nothing so categorical in the government’s proposals.
Much sounded promising in the government's response to the White Paper on reforming football governance last week. Tests will be designed to ensure owners have “sufficient integrity, honesty, financial strength and competence.” Noble intention, but the key question is: how? For example, Vander's 2003 drug charge was on probation, which has now expired. Is his honesty enough?
What about the cries of protest from fans of 777 Partners clubs such as Red Star of Paris or Standard Liege of Belgium? How much weight do they have in the consultation process when deciding on owner suitability? After all, this was a fan-led review of football governance.
The regulator's proposal that owners would be required to provide bank guarantees in the event of an emergency could discourage takeovers that have limited or questionable sources of funding. . The most recent article calls this «adequate financial resources or 'buffers' to enable the club to maintain cash flow.»
Such a condition would likely reduce the number of potential owners, but by getting rid of some undesirables, it would also block others who could make a positive contribution. Tony Bloom, now considered perhaps the best owner in the Premier League, has invested more than £400 million in Brighton. How much should he also contribute by way of additional guarantee?
Tony Bloom from Brighton is the owner of the model. Photo: Mike Hewitt/Getty Images
Only nation states and private equity owners with access to significant monetary assets that could satisfy the regulator would have enough money in the bank for those who guarantee. The consultation document also made few suggestions as to how a license could be obtained, instead suggesting «individual regulation» to apply depending on whether the club was «well run» or not. In other words: we will figure things out as we go.
The regulator will eventually have to make difficult choices. In terms of public policy, domestic and foreign, it will be interesting to understand how different it is from the Premier League. Everton's future is textbook Hobson's Choice. A buyer that raises many troubling questions, many of which cannot be answered within the legal and regulatory powers of the British Government. Or an alternative. A club on the brink that needs someone — anyone — to save it. Unfortunately, the ideal option is rare.
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