Last week saw a series of seismic boardroom changes at Everton.
While the previous week had seen chief executive Denise Barrett-Baxendale, finance director Grant Ingles and non-executive director Graeme Sharp all leave their positions on the board, their departures were followed by new arrivals the following week.
Club owner Farhad Moshiri took a seat on the board, joined by Colin Chong, the current chief stadium development officer who has taken on the role of interim CEO and director. Also arriving at board level is John Spellman, described by the club as an “experienced chartered accountant, businessman and Evertonian.”
There was one omission from the list of departures that irked many Blues fans, with chairman Bill Kenwright remaining in situ, with the club’s official statement confirming his continued presence on the board citing the desire of Moshiri to keep Kenwright in post for a period of ‘transition’.
Kenwright’s future was set to be decided within 48 hours of the announcement regarding the departures of Barrett-Baxendale, Ingles and Sharp, but it would take more than a week before any clarity on his future would be made public. The needlessly arbitrary deadline did little to foster better relations between fans and board after what has been a prolonged period of tumult.
All of the changes arrived amid the backdrop of impending investment into the football club from New York-based firm MSP Sports Capital. The company, led by co-founders Jahm Najafi and Jeffrey Moorad, have been in a period of exclusivity and a deal will be announced in due course after filings made with the US Securities and Exchange Commission revealed that, dated June 20, a new company, MSP EFC Investors LC, had raised $165.5m (£130.2m) from a pool of 13 investors and submitted a ‘Form D’.
The SEC ‘Form D’ filing was a considerable development in the ongoing investment saga and pointed to the announcement of a deal being imminent. A Form D must be filed within 15 days of the sale of securities with the date of first sale being the date on which the investor is ‘irrevocably contractually committed to invest’.
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The deal between Moshiri and MSP is set to be for a 25 per cent stake in Everton through a preferential share structure, where the capital being provided is essentially loans with warrants that can be called in by MSP and converted to equity at a later date. The investment would see MSP paid a dividend, and while preferential shares don’t normally carry with them voting rights, it is anticipated that the US firm will take at least two seats on the reshaped board of directors.
MSP are a firm that has a track record of seeking operational control with their investments, meaning that they will want a significant say in the direction of travel of the club and also the way that the financial side of the club is run, with the likelihood being that there will be an element of cleaning house. MSP want a return on their investment for their investors, and while a play to take over control from Moshiri isn’t on the agenda as things stand, they will want to be as active in ensuring the transformation of the club as possible ahead of the potentially game-changing move to the new stadium at Bramley Moore Dock, the development that has been the motivating factor behind the whole investment search.
The statement from the club last week suggested that Kenwright’s continued presence on the board would be temporary. While there was understandable scepticism from some fans around just how accurate that statement might be, the need for significant change in terms of the way that the club operates, and with new capital arriving that has a lot riding on it, it is hard to imagine that MSP won’t seek to bring their own people to oversee such change. That may be one of Najafi or Moorad, it may not be, but given how high the stakes are, and the lack of a truly clean break, it is likely that the baton will pass when it comes to the role of chairman.
There will be an unpicking of Kenwright’s relationship with the club given his shareholding, and given that he has been the most prominent member of the Everton board in recent years, a period of transition from one to another is understandable, certainly if MSP are wanting to get a grasp of the current situation at the club at the earliest possible opportunity.
Quite how MSP’s influence will play out won’t truly be known until the deal is finalised and they have taken a seat at the table. But in such a firm being key stakeholders in the club it does present a chance for a cleaner exit for Moshiri further down the line when the stadium build has been completed, should that be his ultimate desire. While that might not be through MSP accreting its stake in the club it could arrive through relationships that the firm has with significant individuals and firms that could provide greater interest in acquiring some of Moshiri’s stake in the future.
With cleaning house likely to be a priority, and the removal of unnecessary costs and debt burdens a potential focus, having new voices on the board whose modus operandi is growing businesses likely gives Everton a better chance of securing a sounder financial footing heading into the new stadium which, in turn, will aid their ability to spend money longer term on the thing that is its reason for being - the team on the pitch.
