Who is Dan Friedkin?
Firstly, our prospective (but likely) new owner.
By all accounts, for a multi-billionaire at least, day to day, he’s a relatively low profile figure. Certainly if you bumped into him you might not recognize him as the owner of one of Toyota’s largest global distribution franchises, nor as one of the few civilians licensed to fly – only one of nine in the US (credit Nick Palmer) – alongside US Air Force Pilots in close format demonstrations. A genuine leather pilot helmet wearer rather than faux baseball cap owner.
As seems necessary to state with every football club owner, his wealth according to Forbes, puts him in the top 500 wealthiest of individuals globally with an estimated net worth of $6.4 billion. The source of his wealth is the Friedkin Group, whose website can be found here.
His main business is within the motor industry. Gulf States Toyota is now one of the largest private auto distributors in the world, delivering Toyota and Lexus vehicles and parts to about 150 dealerships in Arkansas, Louisiana, Mississippi, Oklahoma as well as Texas, including Houston’s Northside and Westside Lexus.
The Friedkin Group, the parent company of Gulf States Co., has branched out and grown over the decades. It is now a consortium of more than a dozen companies, involved in sports, travel and entertainment as well as autos. Some of its notable acquisitions are as follows: in 2012, the Friedkin Group acquired North Carolina’s Diamond Creek golf course; in 2013, it acquired the Auberge Resorts Collection; in 2020, the group acquired AS Roma, the Italian football club (more to follow below).
In addition, Dan Friedkin has built a burgeoning portfolio in Hollywood. In 2014, he co-founded Imperative Entertainment, the studio that produced the 2023 Martin Scorcese epic “Killers of the Flower Moon.” He is also, like his father, a stunt flyer and founded the nonprofit Air Force Heritage Flight Foundation and piloted a Spitfire plane in Christopher Nolan’s 2017 film “Dunkirk.”
Along with his wife Debra, Friedkin has also supported a number of conservation, ecological and archaeological initiatives over the years, most notably in Tanzania, where the family has been working to protect wildlife since the 1980s, and in Texas, where he has served as the chairman of the Texas Parks and Wildlife Department.
So all in all, a highly impressive C.V., an untarnished reputation and a guy with knowledge of all the sectors that would appear on any supporters’ wish list of would-be owners – sports operations, consumer retailing and the media/creative arts sectors.
Of greatest relevance is perhaps, his acquisition of AS Roma, from fellow American Jim Pallotta. Pallotta, along with Thomas Di Benedetto, Michael Ruane and Richard D’Amore owned AS Roma for a decade, from 2010 through to its sale in 2020 to Friedkin. A failure to win trophies, over €500 million of player trading profits combined with mounting losses and debts caused huge unrest at the club, and Friedkin bought into an extremely difficult situation. The challenges of creating a new board, overcoming frustrated (but still passionate) fans, creating success on the field whilst sorting out finances and stadium issues will be a useful learning experience for what he and his group are taking on at Everton – the major difference being the near completion of the stadium. However the issues of local infrastructure and particularly transport links will again be familiar. As he will know, building and funding a new stadium in isolation is only part of the solution. Thankfully, in the case of Everton his issues will be significantly less than those he faced and faces at Rome.
Exclusivity to purchase Everton
With the news breaking this Thursday evening (UK time) that Friedkin has been granted exclusivity, the impact on Everton is immediate and significant. The conditions applied to exclusivity included the repayment of the MSP/Downing/Bell loan and the immediate funding of the latest Laing O’Rourke payments.
Until approval from the Premier League is granted, it is in effect a transfer of one loan provider to another, albeit one assumes on better terms until the Premier League approves their ownership.
Any analysis of the Friedkin Group, and of Dan Friedkin would indicate approval is not an issue. Any additional due diligence by Friedkin remains the most significant barrier in my opinion. There are potential issues, not in the public domain and which are the subject of much legal debate that still face any prospective buyer. Those potential issues relate to the current ownership, the precise details of the shareholder loans and potentially the most recent 777 loans (now controlled by A-Cap). I stress that each are potential legal issues, not definitive, but will need to be resolved in the due diligence process.
Assuming that those concerns are assuaged, and the Friedkin Group acquire Moshiri’s shares, then as with their acquisition of Roma, the real work begins.
The list of Everton’s priorities are well articulated but include repairing the balance sheet, recruiting a new board and executive team, re-engineering our commercial operations, managing the stadium transition, creating a genuine football strategy and managing existing footballing management and player resources.
A not insignificant in-tray for any incoming owner and his own management team.
Financially, the new ownership will provide the following – refinancing the existing debt. What does that mean? Through a combination of equity (ie permanent capital) and lower cost long term debt, repaying existing creditors including Rights and Media Funding and the 777/A-cap loan.
As with Tottenham and Arsenal the debt element will be secured against the stadium and will be long term, although I suspect the option to refinance in a lower interest rate environment will be written in – look at how Arsenal refinanced their stadium loans. I suspect this senior debt package will total around £350 million.
The additional capital required is likely to be in the region of £400- 450 million – that repays the remaining debt not covered above, the final elements of the stadium costs, working capital to fund current operational losses and reinvestment in the playing squad.
A time to reflect
In no sense are we out of the woods. We have a huge battle ahead to stabilise and create a platform from which to grow. The evidence suggests that Dan Friedkin has the skills and team around him to do that. The bigger issue is not only to survive, but to compete, then challenge, then win silverware once more. That has to be the message to Dan Friedkin and whomever he brings in to manage our wonderful club.
In terms of reflection, and this seems like a watershed moment – we have seen off Moshiri, albeit at significant cost; we have exposed Moshiri’s initial choice, 777 Partners as unsuitable partners albeit at additional cost and ultimately we see a well resourced group, credible business business owners with the necessary experience to fulfil the corporate recovery challenge that Everton currently present.
The next challenge is for Friedkin not only to effect recovery, but to exploit the opportunity he is buying into, the club, the stadium, the fans, the City of Liverpool and turn us once more into a leading, successful light in English football and then beyond. Football is changing, the Premier League is no longer the be all and end all for the largest English football clubs – we need to board that future train as quickly as we can. Firstly, we need stability, then progress and then we can possibly re-join the elite.
It’s a huge task but that is both the challenge and the privilege Dan Friedkin is buying into. If. as I am sure he will, recognises this, he will get support like no other.
This is a defining moment – let’s hope he (Dan Friedkin) and us the fans participate equally in delivering the future we (the fans) all want.
Categories: Uncategorized
Great piece Paul. Thanks for the research and making it an easy read
Thank you Ian. Hope all is good with you
As you say Paul we may at last get to know the details of what has been going on.
Excellent synopsis Paul, a good situational analysis. The devil will be in the detail with regards to the due diligence, as well as any undue influence or strings attached by any of the loans. In particular Rights and Media Funding. The hidden sway they appear to have over the club is a very real concern. They are making considerable profits on money provided and as shown previously, will attempt to prevent any impact on their operation. This I feel is the only real hurdle that may be a problem. Whilst I also think there will be individual oddities to the multitude of financial arrangements and creditors, none should be a road block the size or R&MF.
Should these be overcome then it will be a straight conversation with Moshiri regarding either a full or partial buyout of his shares. Given the he will almost certainly have lost a considerable amount on his investment with any deal, a long term perspective of retaining a slice of the pie and riding on the new owners coat tails might be attractive but the reality may be that what ever strings attached to loans, will colour the new owners agreement.
As the unknown source said, it’s not a done deal, but it’s a heck of an improvement in what we have now.
Let’s just get it done. They seem serious and we need something to happen.
Having lived half an hour from from Rome for two years, I often went to watch both Roma and Lazio. I much preferred Roma. The Lazio supporters were thugs and if I’m being honest, racists, but there is history in that region.
Since leaving the the military, I’ve worked for 3 Texas based companies. They are ruthless!! Probably what we need.
Roma had plans to move out of the soulless Olympic Stadium they share with Lazio, but they got shelved. Interestingly, it was designed by Dan Meis, who obviously responsible for the design of the new Everton Stadium.
On the transport links, I keep going on about this until I am blue in the face. Build a monorail from Brunswick station to Sandhills, with stops all along the way. It won’t just serve Everton, it will serve the city. And a modern tribute to the Docker’s Umbrella.
I’d like to echo Ian’s comment above. Great piece Paul. I always look forward to your articles and podcast explanations.
Thanks Mike that’s very kind of you. Much appreciated 🙏
But still silence surprise surprise from Moshiri so how certain can we be that Exclusivity has been granted to enable due diligence to start. Then we’ll presumably have to wait until deal signed before approaching FCA & Premier League for sign off unless this can be commenced now? Further delays we can ill afford on both financial and sporting fronts.
But still no formal confirmation that Exclusivity has even been granted by Moshiri surprise surprise so due diligence may not have been commenced. Can the process to gain Premier League approval & Fca sign off of proposed Directors start before then? Further unneeded delays seem very likely.
Super informative. I hope someone in the potential new owner’s crew will read this, and understand how much help you and other like minded people could be to them.
Frank Brennan
Well done, Paul…really informative and balanced article on The Friedkin Group and Dan Friedkin. The area less substantive in cover is probably Due Diligence. Paul, what do you think that Dan is looking for as a negative to make a quick decision to cancel the Exclusivity clause, hypothetically speaking. What do you think will be a significant barrier to deter someone like him from committing to buying.m? The liability of Everton for one example, that you alluded to, how likely are Everton to be sued by A-Capital inter alios (amongst others, if my use of Latin is right (I use Latin in law situations etc)).
Thank you for your work Paul. Two questions: 1. In earlier writings, you thought administration was likely and we were not an attractive option for buyers because of the massive debt. What do you think brought Friedkin and Bell/Downing into the equation in the face of the current situation? 2. Do you see Friedkin group staying long-term or fixing the club and selling it?
Thank you again.
Thanks Michael, administration was a possibility given we needed regular cash injections, something I thought 777 could not sustain. What we needed was a group that could adequately capitalise the club with equity not more debt. Freidkin can do that and will do so. The club then becomes viable especially if the business is run on a professional business like basis. Get it right on the pitch combined with better financial performance and we become an attractive proposition albeit with a heavy entry cost.
Based on Paul’s numbers it looks like Friedkin will pay c. £700M for Everton. Mike Ashley, who is a very shrewd operator, sold Newcastle for a reported £305M less than 3 years ago so £700M seems a huge figure. Why doesn’t Friedkin lean on 777/A-Cap who presently are very exposed?
Moving on, Friedkin would obviously like much of the funding to be by way of debt as it is tax-efficient and reduces his stake. However, I don’t think a £350M senior debt facility could be obtained, certainly not from a UK bank as they have experienced what happens when a football club struggles to repay debt and all the resulting PR nightmares. Additionally, football clubs in the main lose money and consume cash. Look at Liverpool’s accounts across the last 4 years. Spurs have lost a huge amount over this period. Roma lose money. In short, I can’t see how Everton could service a debt of that size even with the income increase generated by BMD.
More positively, there is a wall of money in America at present and the bubble is yet to burst so now is a very good time to sell a football club. Secondly, if/when Friedkin starts to pump money into Everton then I think fans can start to breathe more easily.
Simple,,,Wrexham 10.0,
Interest rates are getting more favourable,(reduce debt/service costs)
Cash is King,
Reputation is Gold.
Properly leverage media,marketing,stadium,etc.
Properly manage transfers,etc.
The days where you could buy teams like Everton with smoke and mirror’s
are hopefully over,,,,,
Cheer’s,,,
Go Oilers (Canada’s Hockey Team).