So the news has broken that USM, the holding company of Usmanov, Skoch and Moshiri are to provide £75 million of sponsorship and name rights funding for the next five years. Importantly it is stated that this is the initial term.

I’ve stated many times I did not believe it would be possible for USM or any Usmanov related company to have a commercial relationship with Everton because of Usmanov’s holdings in Arsenal. I still find it difficult to understand how that’s been achieved.

However what is not difficult to understand is the business logic behind the decision – let’s put aside the potential compliance issue.

I’ve stated many times Usmanov will not sell his Arsenal holdings and invest in Everton, covered in detail here.

It’s widely known that Usmanov and Moshiri are extremely close, here’s the strategy and investment decision I believe they’ve made regarding the Premier League.

I believe they’ve made a conscious asset allocation decision to increase their exposure to a market (consider the PL and Champions League a market for a moment) that is booming, revenues and valuations growing at exponential rates.

By Usmanov holding 30% of Arsenal, he has more than £300 million worth of market exposure to the Premier League. Previously that was split between them both. Now Moshiri has £87 million worth of exposure to the Premier League through Everton with the hope that that value will rise significantly through success on the pitch, increased revenues and a shiny new stadium on Bramley Moore to boost the asset value.

Combined therefore they have nearly £400 million of exposure to this booming market.

In order to maximise the growth in value of Everton, Moshiri has had to repair the balance sheet (£80 million interest free loan) which enables the stadium project to be started, and improve non-broadcasting revenues to comply with STCC (short term cost control regulations) in order to increase the wage bill to make the team more competitive.

Thus the easy and most efficient option is to use the resources of a company they own and control to assist in that increase in revenues. What is more, the investment hugely assists name and brand awareness in their most valuable asset USM.

Therefore the business logic is outstandingly simple, efficient and ultimately should be highly rewarding.

Combined they’ve maximised their exposure to the booming Premier League, and the Champions League with the potential for future participation from Everton. At a stroke they’ve created great value for USM in terms of publicity, and through the sponsorship funding enormously assisted Everton in future strengthening of their squad leading to higher revenues, success and a higher valuation.

The logic is outstandingly simple, and it appears compliant with the rules of the Premier League.

It’s really quite brilliant for all involved.