Paul: Good morning, good afternoon, or good evening, depending upon where in the world you are, and what time of the day you’re listening to this episode of Talking the Blues.
George: Did you nick that opening from Barry on Bull and Drood? LAUGHTER Sorry, go on.
Paul: Well, I did hear that somebody else had been trying to use it. And my copyright lawyers are looking into it as we speak. Yeah, right. Yeah. So here we go. Gents, it’s been a couple of weeks. We’ve I think we’ve had a little bit of a break.
Paul: George, you’ve been up in bonnie Scotland. And Andy, you’ve been traveling in the country working as usual. No, not really, there’s been nothing going on at Everton.
George:Yes, good. It’s nice that I don’t. Right, Paul, I’m just going to cut to the chase. What the expletive deleted is going on?
Paul: Okay, so as everybody now knows, Dan Friedkin of the Friedkin Group withdrew their offer to buy Everton. So they had an exclusivity period, which was still running. And during that exclusivity period, they did two things basically, they provided Everton with 200 million pounds worth of loans in order to pay off all of the people associated with MSP, Andy Bell, George Downing, and the 22 million pound loan to Farhad Moshiri.
Plus they provided some money, about 40 million pounds, most of which was paid to Laing O’Rourke. So in total they provided around roughly, it may be slightly more, but roughly 200 million pounds and that was part of the conditions of them getting the exclusivity period.
And of course in that exclusivity period, it gave them the opportunity to access all the club’s data. So not only the financials, but all of the legal stuff that obviously a company looks at when it’s acquiring another company.
And in the course of that, one big issue came up and that big issue, of course, is the loan that was made by 777 originally. So going back to September of last year when Farhad Moshiri gave them exclusivity, 777 provided, again, around about 200 million pounds.
It might be slightly less, but then there’s interest payments to be made since then. So let’s just call it rounding up 200 million pounds worth of loans. Again, to pay for the stadium, but also just to pay some of Everton’s operating costs whilst they try to get approval from the Premier League.
And as everybody now knows, they didn’t get that approval. And one of the reasons for them not getting that approval is that the 777 business has essentially gone into a form of administration in the US.
And as a result of that, the 777 loans that were initially provided to Everton from 777 fell into the ownership of a company called A-CAP, which we’ve discussed before, run by a guy called Kenneth King.
And in a complicated series of transactions, A-CAP has ended up owning all of 777’s assets because A-CAP actually were the people that provided 777 with the money that provided Everton with the loan.
And without complicating it too much, just for accuracy purposes, they actually provided that loan through Rights and Media Funding. So the money went from A-CAP to 777, from 777 to Rights and Media Funding who then paid Everton.
And I don’t think many people are aware of that final bit of the link, but that’s how the loan became secured, albeit less secure than the other loans that the other loans that Rights and media Funding have provided.
So obviously, the Friedkin Group coming in, they paid off the MSP loan and the Moshiri loan and the Bell and the Downing loan. That had to be looked at by Friedkin, obviously, and there was no problem with doing that.
The Rights and Media Funding isn’t an issue. That’s a very regular loan. It’s an expensive loan, but it’s a very regular loan. There’s no legal issues with that. But when it came to the 777, now the A-CAP loan, there is a big issue there.
And I’m going through sort of in quite a lot of detail and as sort of slowly as I can, because I think it’s important that people understand what the issues are. So because of 777’s financial performance, because they are now in a form of administration, and their assets have been acquired by A-CAP, who have provided them with the money.
A-CAP have obviously got involved in this process, and they claim through Kenneth King that they effectively control the loan to Everton, which is now an asset as far as A-CAP is concerned. If that was the only issue, then it would probably be an issue that could be resolved.
But the problem that Everton have and the problem that any owner, future owner of Everton has is that 777, A-CAP and several other companies associated with both parties are subject to a legal dispute in the Southern District of New York District Court.
And that dispute is from a UK company, a UK investment company, called Leadenhall. And again, we’ve spoken about Leadenhall previously, but I’m just going through everything so everybody knows exactly what it is.
Leadenhall claim that they’ve lent A-CAP a lot of money over a period of time. And they now claim that that money is, the amount that they’ve lent is around about $609 million. And they say that all of those loans, like any large loan would be, is secured against the assets of A-CAP and other parties.
But they also say that their investigations lead them to believe that the assets that they use. So let’s make it very simple. So, George, for example, if you, if you own a house and you have a mortgage that that mortgage is secured against the house, and the bank won’t allow anybody else to take security on that house without their approval.
Leadenhall claim that A-CAP have not only given them security, and 777 have not only given them security on assets that have been secured to other lenders, because A-CAP and 777 have many other lenders, not just Leadenhall.
But indeed, some of those assets don’t even exist. So they’re claiming this is currently a civil case in the US. But they’re claiming fraudulent activity. And, you know, when we issue the podcasting, I can put a link to their complaint.
Now, this is a case that started in May of this year, in the US, as I say, in New York, and is currently ongoing. And it should have reached a settlement on the 10th of July. But for reasons that I don’t know, because they’re not in the public domain, they haven’t reached an agreement.
And that essentially would be the US court saying, well, all of the assets are owned by this party, or some of the assets are owned by this party, other assets are owned by another party. So Leadenhall, these are your assets, A-CAP, these are your assets and 777, well,777 don’t really have any assets anymore.
And of course, one of those assets is the loan that they provided Everton because whilst for Everton , it’s something that we have to pay back. It’s considered for whomever owns that loan, as an asset, obviously.
And the US court has to now decide who actually is effectively the beneficiary of any payment that’s received from Everton or from one of Everton’s new owners in the future. Is it Leadenhall?
Is it A-CAP? Is it whomever? And they haven’t reached that decision. And one of the actions that has taken place in New York in recent weeks, is that it became apparent that A-CAP had been selling some of their assets.
So they’ve been raising cash. And Leadenhall said, hang on a minute, you can’t do that because those assets may actually end up being ours. We believe they are. And now we’re asking the judge or we’re asking the court to agree with us.
So they got an injunction put in place that where the court said, essentially, A-CAP, 777 or any of the other parties that are involved in a number of parties, including Josh Wander and Stephen Pascoe, you can’t sell any of the assets owned by these companies without our approval until such a time as the Leadenhall case. is determined. And that meant that technically, A-CAP, Kenneth King, who is obviously acting on behalf of A-CAP because he owns A-CAP and he’s the CEO and the group chairman, this and the other. He can’t agree a settlement figure with Everton or with Dan Friedkin, as would have been the case, because the Friedkin group have come in and they said to Farhad Moshiri….
OK, we want you to write off your 450 million pounds worth of loans. We’ll pay the other loans that are in existence to Rights and Media Funding. But because the 777/A-CAP loan is the most junior and the least secure, we’re looking for something that’s called a haircut.
And that basically means that we’ll offer you twenty five pence in the pound or twenty five cents in the dollar. So you won’t get the full amount back that you’re originally lent. And obviously for the buyer of the football club, that represents a good deal because it means that they have to spend less money in paying off that debt.
And obviously the people on the other side, the owners of the debt, A-CAP etc are going to argue against that. But because this injunction is in place in New York and they’re not authorized to make that agreement or they can’t make that agreement without either the approval of the course or perhaps even the approval of Leadenhall.
There are a number of other issues as well, which are quite complex legal issues with regards to these loans. And that and I will be very careful. I’m not accusing anybody of anything here, but there is the potential that as I say, this is currently a civil case that’s going on in the US, but it may become a criminal case if it’s believed that there was criminal activity.
So this is no longer just now a commercial if it’s believed that it was no longer just a commercial dispute, but it’s actually an act of fraud and led not to be just to be clear, Leadenhall have accused 777 and A-Cap of widespread fraud.
If it became a matter of fraud, it would become a criminal matter as well as a civil matter. And there is a concern and there should be a concern that some way down the line, if it turned out to be a criminal matter and if somebody was found guilty of committing a criminal act, then everything could get caught up with something that’s called the proceeds of crime act whereby somebody might argue and it may be a policy holder,
for example n A-CAP or any as a 777 companies are now owned by A-CAP. Let’s just call it a A-CAP policy holder. They may say, well, look, the only reason everything got this loan.
And it’s not the insurance companies money at the end of the day. It’s our money we are the policy holders. The only reason they got this loan was because of the criminal activities of whomever is found guilty of a criminal act.
As I say, that’s not the case at this moment in time, but it might be the case if it became a criminal case and then somebody was found guilty. That being the case, somebody may claim under what’s called the proceeds of crime that everything were beneficiaries of a criminal act and therefore.
Those people could then possibly have a claim against Everton in terms of that money. Now, any potential buyer, it doesn’t matter whether it’s a football club or or anything else looking at this, would want absolute clarity as to what potential liabilities are going forward and unfortunately, nobody is in a position to provide that clarity.
So. Who to whom is the loan paid? So let’s say that the Friedkin Group decided that they were going to pay the loan off. Who’s it paid to? That answer can’t be. Nobody can give that answer at this moment in time.
Let alone how much of it should be paid. Let alone whether or not ultimately the monies that were offered to Everton and the monies that Everton used were as a result of a criminal act again.
And I will emphasize. There are no charges at this stage and obviously nobody’s been proven guilty of the criminal act, but, you know, there is the potential for that to happen at some point in the future.
And therefore, any potential owner, new owner of Everton Football Club is going to want to have those matters resolved. And I’m not going to go forward with the purchase of the club until such a time as those matters are resolved.
And sadly for Everton and for all of us Evertonians, that puts the club in a really difficult position because nobody’s quite sure. First of all, when the civil case in the US is going to be resolved, whether it’s going to be subject to any form of appeal, which it might be, depending upon which way the judgement goes.
And then whether or not any investigations by the FBI or by any of the law enforcement agencies in the US result in criminal activity. And as I suppose everybody understands, anybody that knows anything about US law or has watched maybe the various TV shows over the years about US law, these things can take an awfully long time to be resolved.
And that’s the difficulty that Everton now face. And it’s always been there, it’s always been there in the background, but it’s obviously crystallised now. And because Friedkin have said and they’ve come out with their public statement that, you know, this is the reason why we can’t proceed with the purchase of Everton Football Club.
Absolutely anybody else that’s looking at Everton Football Club, and there are, you know, there have been others and there will be others who are interested in buying the Football Club, will have exactly the same issues.
Now, potentially, somebody could be so wealthy that the £200 million is of little or no consequence to them and they could just decide to pay for it because they wanted to buy Everton. Regardless of any of those issues.
And in theory, that could happen, but it seems very unlikely because even if you are, you know, a state funding from the Middle East or anywhere else, it seems unlikely that you would go that far in order to acquire Everton Football Club.
Particularly at a time when there are at least four, maybe five, maybe six other Premier League clubs openly for sale. So if you’re looking, if you’re an investor looking to buy into the Premier League at this moment in time, you effectively have a number of options and clearly you’re going to take the options which represent the least risk to you.
Now, on the flip side, sorry, I know I’m talking a lot here and I’ll stop in a second. On the flip side, of course, there’s the potential that you’re buying if you’re buying Everton at this moment in time, you know, just over a year away from going into a brand new stadium and all the benefits that that would bring.
But there are these significant negative things that are, you know, standing against a potential buyer. Not only are Everton’s finances in a terrible state, which we’ve all known about for, you know, well, certainly as long as Talking the Blues has been going on and prior to that.
But now we have this legal issue which can’t readily be resolved, nor can it really readily be put to one side. Sometimes you might turn around and in this situation, if you’re a buyer and say, look, we know there’s a potential liability here, so we will put a sum of money in an escrow account, which is basically an account that’s held by a trusted third party.
And once and what you’re effectively saying is that once this is resolved, that money will be paid to the rightful owner of the resolution that could happen. But it’s very, very unlikely that given the magnitude of the numbers and the potential liabilities, which could go way beyond the amount that’s owed, given that it’s a, you know, it’s a US legal situation.
It’s very unlikely that anybody would be prepared to take that risk. So the prospects of a swift and easy resolution by bringing in another potential buyer of the club are, in my opinion, at least, extremely limited.
So that’s probably maybe 10, 15 minutes. That’s where we are.
George: This is worse than Olga again, a regular place in the size.
Paul: Well, we can probably get on to that in a few minutes because it obviously has a huge impact on, you know, where exactly does the club go from here?
George: Yeah, I’ll say. Sorry, just little tiny things, Paul, like the £200 million that Dan Friedkin put in, that now becomes another debt that ANOther, who might make a bid for the club, has to pay off, yeah?
Paul: Yeah, yeah. So that effectively has replaced the MSP, the George Downing, Andy Bell, and the Farhad Moshiri debt that was secured against the stadium and secured against Farhad Moshiri’s shares. So they hold that debt now and they hold the security.
And my understanding is that they’re not expecting that loan to be repaid for somewhere between 9 and 12 months from here.
George: No, that I’m sure that’s absolutely right, yeah.
Andy: I’ve got a question now then. So Dan Friedkin and the Friedkin group have withdrawn their interest or their offer to buy the club because they don’t know who is liable for the repayment of X amount of money.
Does that mean that their interest in buying the club is dead and buried or just on hold until such time as the determination of who is entitled to be repaid is made and then they might come back to the table.
Paul: My understanding from people who have been involved in the negotiations is that their interest is completely over, but I suspect any potential buyer in the same position would say that anyway.
Andy: But yeah, because obviously when I mean, it’s been widely reported that when the Friedkin group acquired Roma, they backed away at one point before going back in and completing the deal.
Andy: That’s what prompted the question is that obviously, obviously, you know, a cynic would say that it’s a bargaining tool to get the price reduced. Whereas you’ve just outlined that there are enormous legal issues involved in the repayment and to whom it’s going to be made.
That’s why they just begged the question that, OK, they said, right, OK, let’s put this on the back burner, wait till all the Leadenhall A-CAP/777 thing is resolved, and then we’ll return to the table.
Paul: I was given a direct quote from the Friedkin Group that said this is not a matter of writing a cheque. There are issues here that we believe are unresolvable.
Andy: Wow. Holy smoke. And so that begs the question and then it’s unresolvable for them who on earth is it resolvable for?
Paul: it’ll only be resolved when whatever happens in the US courts run their course. Right. And, you know, whatever happens, whatever decisions are made, and whatever appeal process then happens after that, because no doubt it will go to appeal because that’s what happens in the US.
Yeah, it will have to run through that whole process. And that process is going to take months, if not years.
Andy: Yeah, so meanwhile, we
Paul: We can’t wait.
Andy: No.
George: But what does that mean, Paul? Can we cut to the chase now? I mean, the explanation is brilliant. Well done. I’ve even followed it. And you never said anything about amortisation. That was a bonus as well.
But what the f*ck is going to happen?
Paul: Well, in my opinion, it makes the club currently unsellable, and it can’t be sold until all of the issues that I’ve just described, and there may be more, it can continue to trade whilst the directors of the club believe that it’s solvent.
So what position is the club in currently? The club has sufficient funds to see it through the next sort of period of time. What does that mean? It means the next few months. What does that mean in terms of our player trading activity?
Because clearly, and the club have articulated the fact that there was a plan for the summer, we were going to sell some players and we were going to buy some players. I think the selling of players will continue, and it means any thoughts that we had that we may be able to keep some of the players that we wanted to keep, I think now disappears.
I read the articles and the statements from the club that this doesn’t affect our player trading position, but clearly it does. I mean, there’s no there’s no point in beating around the bush. They have to say that from a negotiating point of view.
I get that. But we don’t know where the future funding for the club is coming from at this moment in time. Will it come from Farhad Moshiri? Unlikely, because if it would have, you probably would have done so before.
Can we borrow more money from other sources? Very, very unlikely, given that all of our assets and, you know, again, I’ve described in great detail on my own website, if you don’t mind me saying so, you know, which assets are secured to which parties and we don’t have any any assets that aren’t encumbered or aren’t offered as security to to one of our lenders.
We’re not going to find another person to provide us with significant loans to continue to meet the cost of the stadium, because there’s still monies to be paid with regards to the stadium and the monies that need to be paid with regards to We’re still loss making and our loss making situation has improved because we are reducing costs and, you know, we’re getting more revenue.
For example, we’ve got more revenue because of the Castore deal. But at the same time, we’ve got huge, huge interest costs. You know, if we just take a step back and say, OK, well, how much money does everything a person own?
Let’s ignore the four hundred and fifty million pound that we owe Moshiri because that doesn’t attract any interest. And at the end of the day, he is not going to get any of that anyway.
That’s just going to be written off or converted into shares, whichever is the most tax efficient way of doing it. But we have over six hundred million of loans to external parties. And each of those loans are attracting relatively high rates of interest.
Paul: And I I’ve calculated that currently our interest costs are anywhere between a million and one point two million pounds a week.
George: Oh, for goodness sake. OK, can I ask you? Well, how much nearer are we to administration now?
Paul: Well, I don’t think we’re close to administration at this point because with the transfer window being open, we’ve got the ability to sell players.
George: No
Paul: We can know, we’ll always get a, even if people recognize we’re in a difficult position and, you know, negotiate on a very tough basis, we’re always going to be in a better position whilst we’re solvent than when we’re not solvent, i .e.
when we’re in administration. So it doesn’t make any sense for the club to go into administration. It doesn’t make any sense for the directors of the club to say, we can’t continue to trade and therefore, you know, we’re going into administration.
Or indeed, any of the creditors to say at this moment in time, everything’s not going to pay us back, therefore we’re going, you know, we’re taking them into administration in order to get our money back.
It doesn’t solve, it wouldn’t solve any of the issues that the club has or indeed any issues that the creditors have to do that. So what monies we need are going to come from player sales. And what player sales we make, whereas maybe two weeks ago, last time we did a talk in the Blues, we might have been able to talk about how most of that money would have been reinvested back into the squad.
There’s a big question mark now as to how much of that money can be reinvested back into the squad, because we don’t know how long it’s going to be before the club is in a position where it can be sold.
Thank you.
Andy: So potentially then we’re looking at multiple exits and any replacements coming in are likely to be brevis or loans or very cheap purchases if there’s any cash left.
Paul: There is some cash in the business at the moment, and I’m not going to claim for a second that we’re down to our last pennies because we’re not. And we’ve already affected a couple of sales, haven’t we, in terms of Ben Godfrey and in terms of Lewis Dobbin, and of course we’ve lost the services of Andy Lonergan, Andrew Gomes, and Danjuma’s loan has finished.
So our costs have reduced a little bit, and we’ve raised some money, we’ve raised roughly £20 million from those sales. But we will need to raise more in order to pay for the remaining bits that need to be paid for the stadium, and cover future losses, and also provide some contingency because we don’t actually know when we’re going to be in a position to either sell the club or to raise more money if we need to raise more money six months.
Andy: 12 months down the line. Is there any income due from TV rates?
Paul: There is, but a number of people have said to me, this is the time of the year when the clubs have received all of their money from the Premier League and they’ve received a lot of money in advance for season tickets and that is obviously very true and that is the case, but that money then has to be spent over the whole year and we have to consider the fact that every month, you know, the club is likely to spend,
excuse me, the club is likely to spend somewhere between 15 and maybe £18 million a month on its costs, maybe a little bit more, maybe as high as £20 million, certainly if you take into account the interest costs, it’s going to be over £20 million a month and at the end of the day, what is our revenue?
Well, if you spread our revenue out equally across the year, our revenue is somewhere between 15 and maybe £17 -18 million a month. It’s never the same every month because it comes in in big lumps at different times of the year, but from a budgeting point of view, you have to balance it out and spread it out across the year and so roughly, well not even roughly, we are actually, if you take interest costs into account,
we are spending more money each month than we receive, even if we receive that money at different times of the year in different amounts. So that is a difficulty that we face and it’s a difficulty that we have faced for many, many years and it’s one of the reasons why we owe, obviously the stadium is one of the reasons, but it’s one of the reasons why we owe more than £600 million in external debt that we have consistently,
There has only been one year since Father Moshiri came in 2016, that’s now eight, nearly eight and a half years, there has only been one year when we made a profit and that was the year that we sold Lukaku.
And actually, it’s quite interesting if you look at where the money that Everton have spent over the last eight years. Obviously, like every other Premier League club, we’ve enjoyed growing revenues from TV, from commercial deals, etc.
Ticket prices have gone up, so although our matchday revenue is still very low, it has improved. Quite a lot of money has come from player sales. In the last eight years, we’ve made over £300 million in player trading profits, for example, and we’re going to have to continue to do that in order to stay in business.
Andy: It’s the only likelihood that the club will make severe changes elsewhere.
George: Why don’t they sell Bramley-Moore dock and just carry on playing at Goodison Park, isn’t it?
Paul: You need to be solid George:
George: I don’t know somebody wants a stadium that can hold rock concerts and everything else I don’t know Paul I mean I’m just
Paul: you know, sorry, I’m not. I wasn’t challenging you directly. It’s actually what you’re saying is a very good point, because I hear other people saying, well, we’ve got a stadium that’s worth a billion pounds, because that’s what it would now cost if you wanted to start the stadium from scratch, scratch, scratch, again, it would cost you a billion pounds.
But it’s not worth a billion pounds. Because we’ve only got there’s only one tenant that can ever play at that stadium. And that’s everything football club, Liverpool are never going to move there because they’ve obviously invested in, in Anfield, and they wouldn’t move to Bramley-Moore.
I mean, you imagine if they moved to Bramley-Moore, it would
Andy: situation. It’s a smaller capacity than the redeveloped Anfield as well.
Paul: Yeah. And it’s just never going to happen. So, and there’s nobody else, you know, the Marine. I mean, the Marine are on the up and up, but I think we’re going to have to wait a few years before they can buy probably more from us.
And, you know, people say, well, you know, we’ve got the plaza outside and we’ve got an opportunity for concerts and stuff. As things stand, the stadium is only going to be licensed for four concerts a year.
Now, that can change. Obviously, we can ask the city council and we probably would get more concerts, but that doesn’t pay the bills. I mean, it’s nice additional money and everything else. And, you know, it’s obviously part of the business plan going forward that we do that and we do things like that.
But we’re only, we’re still only got at the end of the day. Let’s say we play, I don’t know, obviously 19 home games. And let’s say we have a couple of decent cup runs every year. So we end up playing 24, 25 games.
We might get into Europe at some point, but let’s say we end up playing a maximum 24, 25 games. On top of that, concerts and stuff, it’s unlikely that the stadium will be used to its capacity any more than 30 times a year.
No, and particularly, you know, I think this will change and it will change because we’ve got a change of governance and because the city council are backing investments in the area. It will become a destination where people go because, you know, at some point, maybe in a decade’s time, there will be hotels around there.
There may be a conference centre around that. There may be other things that, you know, draw people in, but we’re not there yet. And all of that is fantasy at this moment in time because there are no no real plans for it.
The only plan that there is is that we still have to finish off paying for it. And we’re due to start playing games in it in like 14 months. But even then, in 14 months time, and we have a great cup run every year, the stadium is not going to be used more than 30 times a year.
George: Well, obviously it was never planned to be, was it?
Paul: No, no, but I’m just trying to contextualise what the, you know, what is the value of the stadium. Right.
George: I’m sorry, Paul, I was just being desperate and looking for a desperate solution.
Paul: So, we are in quite a difficult position, we’re not going to go bust tomorrow.
Andy: No, but what they say is highlighted, Paul, is that with the Friedkin can withdraw off a withdrawal and if they are genuinely taking themselves right off the table, it’s highlighted, as you explained before, that to all uncertainties right now, the club is unsellable.
Yes, and that’s a huge worry because the follow -up question is how long can the club survive in that state?
Paul: But there’s a number of areas where any business can get money from. It can get revenue by selling its product and services, which we do obviously, and that’s playing football, getting all the revenues from commercial deals, the stadium, and what we receive from TV rights.
We can borrow money, we can get money from our investors, owners, so Farhad as it stands, or we can sell assets, which means selling players. They’re the only four ways a football club can raise money.
And if we’re already spending everything that we earn, in revenue terms, it’s unlikely that we can borrow more for the reasons that are just described at length. It’s unlikely that Farhad Moshiri is going to put any more money in, or indeed anybody else is going to put money in as a minority investor, whilst those issues that have been identified through Friedkin can still exist.
Paul: And we’re not going to be able to, we can only remain competitive as a football club for so long by selling our best players.
Andy: and we’ve only got a finite number of players that actually could bring in the kind of revenue that we’d need. It’s not like we’ve got a production line of top -class players coming out of the academy where we can move on.
No offence to the lines that we’re in the academy now, but the failure of the academy system over the last 10 years or more has not truly come home to roost in as much as we’ve no little diamonds in the rough that we can move on.
George: or even bring in to replace the diamonds we also have.
Andy: Yeah.
Paul: Yeah, people are going to be quite sorry that Talking the Blues is back, but I think most people are adults and most people actually say, George, and then send me the feedback that I get. I get a bit of nonsense on social media, but the genuine feedback I get is that people appreciate being told how it is the reality of the situation.
It’s not sugar coated. It’s not. You can’t sugar coat this. It’s not put out there in a sort of extraordinary way that overemphasises our difficulties. I think it’s a balanced opinion of where we’re at and it’s an opinion that’s been shared with other professionals, including other potential investors, and nobody from that area, nobody within football disagrees with the assessment.
George: Where are Andy Downing and Andy Bell and George Downing now, then?
Paul: Well, they’ve had their money returned to them. So the club doesn’t owe them anything. And, you know, frankly, they would be mad to come in as minority investors at this moment in time with these unresolved issues facing the club.
George: I’m sure they’ll twig that one.
Paul: Yeah, absolutely. You know, they are, they’re committed fans, they’re as committed a fan as anybody else. And in fact, one could argue more committed because they actually put some of their own money up front in order to keep the club going just over a year ago when it absolutely desperately needed the money.
But they’re not, neither of them are fools. They’re an easy route out of this situation. They don’t see an easy route out of the situation, neither. Or even a difficult route that’s workable. So that they’re not going to put themselves forward at this moment in time, which opens up then the discussion to well, who are the people who are actually now charged with resolving evidence, difficulties, and those people are fired machinery as the major shareholder and as the senior director for want of a better term within the football club.
Colin Chong, who’s the CEO, an employee and executive of the club, his background is this is stadium development, and, you know, basically facilities management, by all accounts, very, very good at that aspect of the job.
But, you know, being brutally honest is not an experienced CEO, and has no experience of these types of highly complex corporate affairs, where frankly, you’re fighting for your club’s existence going forwards.
And you are having not only that you haven’t, who is it that’s selling the club to potential owners at this moment in time? Because I don’t think I don’t think Farhad Moshiri has much credibility with potential owners having, first of all, said that 777 were the people, well, first of all, not changing the Everton board in 2016, when he should have done so and retaining the services of Kenwright et al.
Then saying 777 are the most appropriate owners and having searched high and low, these are the people that can take the club forward, etc, etc. Then finding a credible buyer in the Friedkin Group and then they saying, actually, you know, having, you’ve offered us the house, we like the house, we want to buy the house, but now we’ve had the survey, we can’t do it.
Moshiri is not, in my opinion, is no longer a credible seller. So who is it that’s going to sell this football club? Is it going to be somebody like Deloitte, who are currently charged with selling four or five other Premier League clubs?
In all honesty, if those other clubs are even half decently run, if they don’t have the financial strains that Everton have upon them, if they don’t have the potential legal issues that Everton have, those clubs are going to get sold before Everton.
Regardless of the potential of the Everton stage and the obvious potential of it in the football club itself. We’ve said this for years, but you know, we at this moment in time, we desperately need a much stronger board.
We desperately need a much stronger executive team to go through this process.
George: Absolutely no way that’s going to happen, is it?
Paul: But it’d be remarkable if somebody with those skills came forward at this moment in time and said, you know, I fancy a challenge, I’ll take this on board.
George: And what makes you think that a dickhead like Moshiri would go, Oh, Jolly Good, sit there.
Paul: Well, it’s not going to happen. It would be fantasy to believe that it is going to happen.
George: I don’t believe it’s going to happen, Paul. No, I mean, we had a fortnight where we didn’t speak of some sort of hope. I had a wonderful text from a blue in Glasgow who said, I’m beginning to fall in love with everything again.
Yesterday’s text said this is going to kill me. And, you know, that was it, wasn’t it? A fortnight of hope before it all goes, oh, dear God in heaven.
Andy: It’s ironic that it happened on July the 19th, 479 years to the day since the Mary Rose sank, the pride of the British naval fleet on the end of the 8th sank on July the 9th, 19th, 1545.
George: Oh, damn.
Andy: Maybe it was written in the stars, it could have been written in the stars because it was the same day that the old Apollo 11 went into moon orbit.
George: You on Google, Andy.
Andy: No, I’m not actually.
George: You just know all this stuff, you.
Andy: I read it this morning on the train but no it wasn’t written on the train it was in the newspaper but graffiti or anything
George: And then just to, you know, cherry on the cake, I mean, I know I understand about clickbait and stuff, but I read one about Sean Dyche is now in the frame to get Gareth Southgate’s job, which I would imagine would come as a huge relief to Sean Dyche.
Andy: Well, he’s got another job, he’s got a potential job offer coming.
George: You would think, I mean, he hasn’t got a lot of air to tear out, Andy. But being manager of Everton at a time like, I mean, if Sean Dyche’s got any writing skills, I would love to read his book about what the hell went on while he was manager of Everton.
Andy: Yeah, it’s just the sad thing is that, you know, for the rank and file fans, you know, all we’re bothered about as football fans is, are we going to have a team? Are we going to have a team that’s going to be competitive?
Andy: Are we going to have a team that can take us away from or prevent a four consecutive relegation battle? That’s what we want to know. Right now, it just appears that the next few weeks in the build up to the season.
George: All right.
Andy: um all we’re looking at is is seeing um people eyeing up our talent or the talent that we’ve got that’s purchasable or sellable depending on your point of view uh and knowing full well that because of the state that everything’s in they’re just going to low ball us in the in the office 100%
George: It has to be, doesn’t it? I mean, it’s business and it’s…
Andy: Yeah, from the business side, I mean, you cannot blame them. But from our point of view, it’s just, it’s just this, you know, it would, it just appears it’s going to be the start of yet another difficult, potentially catastrophic year in the history of Everton Football Club.
George: Feels like it, darling, yeah.
Andy: Yes.
Paul: The great tragedy of all of this, apart from the opportunity cost and the fact that we as football fans want to see a successful football club, is that we’re entering our final year at Goodison, which should be, okay, we’ve still got to play all of our games at Goodison and we’ve still got to do as much as we can do to win most of those games, if not all, etc, etc.
The competitive thing, you know, pressure still exists, but it should be really a celebration of what is a cathedral of club football.
Andy: Yeah.
Paul: You know, one of the footballing cathedrals of the world, really. You know, they can be. Well, there isn’t there isn’t a club stadium anywhere in the world that’s played more first division or top division games, club games in the world, and everything for that, the Goodison Park.
Andy: Yeah, that’s true. And it staged the World Cup semi -final.
George: Yeah, I was there for the semi -final. No, so what was your quarter-final when South Korea went three up against Portugal? Wow, an unbelievable game of football. Two of them were edges. They were only four foot four.
Andy: I mean, you’re right, Paul, it’s, you know, it should be a season of celebration and tear jerking memories and everything. And it’s more like with people chewing on fingernails and pulling them out.
Andy: And as our kid said, Sean, that hasn’t got a great deal left to pull out.
George: None of us will have.
Andy: No.
George: I wonder if we can raise some money by every Everton fan shaving their head. What do you do with hair? You fill pillows with it, don’t you? Teddy bears and things. Wigs. Teddy bear wigs.
Andy: make wigs out of it, yeah.
George: I’m depressed.
Paul: Um, Sean Dyche has…
George: Yes, absolutely. He deserves it. He’s kept his dignity in the middle of…
Andy: Mmm.
George: Humbling days. Yeah.
Paul: But he and nor Kevin and Thalwell are going anywhere, assuming that they both want to stay, which I think they do, but they’re going nowhere because why on earth would you change them in the knowledge that you’re probably going to find it very difficult to attract somebody that you’d want anyway?
Paul: Absolutely. So, you know, we’ve got what we’ve got. And I mean, I think you’re quite right, George. He deserves his tenure anyway. And, you know, at the end of last season, we praised him to the hilt for having guided the club through a really, really difficult season.
The problem, of course, is that this next season is now likely to be equally difficult, for slightly different reasons, but it’s going to be another difficult season. And the fan base don’t deserve that.
Andy: No, he didn’t deserve it, none of us deserve it. Thank you. No, I think we’ll be out to an end.
George: Well we have for the minute. It’s only safe in the knowledge that if we leave it for seven more days there’ll be more madness to discuss next week.
Paul: Did either of you, maybe I’m a bit old fashioned, but mid-July I think it’s far too early to be watching football, did either of you watch the Sligo game?
Andy: I did. I haven’t yet, no. I was going to when we finished this.
Paul: And Chermitti scored twice, yeah?
George: He did. They were 3 -1 down with 10 to go. Holgate scored from a Chermitti cross, or a header, I think, and then Holgate gifted them a goal with a sloppy back pass. And then they were 3 -1 up with 10 to go, and Chermitti scored two really dinky goals.
George: Swings and roundabout, I’m sure.
Paul: Really enjoyed the day they said that you know it’s like a put on put on a great day for everybody and you know the everything people that were there were very approachable and you know you could spend time with the players and the manager and you know it was a great occasion so you know that’s fantastic and I think you know we sometimes forget how how strong our support in Ireland is yeah maybe we don’t do enough of that you know but anyway there’s a lot of things that we don’t do enough of I’m just trying to think what else there is that we can talk about without without pulling our heads out
George: We could offer our opinions on the Euros, which came to a climax or an anti -climax, depending on your point of view.
Andy: Well, it was an anticlimax, wasn’t it? Well, I mean, I mean, if we’re going to be brutal. Did England actually deserve to get to the final? That’s highly debatable. The fact they got there, you’ve got to give them some credit on it.
Andy: But. Overall, I was underwhelmed with England in the Euros. Before the tournament, I wasn’t that disposed to watch it, but football being football, it’s a drug in it, so. I did. And there were times when I wish I hadn’t.
Andy: Also when England were playing, I mean, you know, what did they play over all six games, seven games? Yeah, seven games. And in all honesty. You know, if they play, did they actually play?
Andy: More than about. An hour. Do that. I mean, there was the first half of the semi-final against. Holland was good. There were bits against Slovenia that were good. Well, by and large, it was a really hard watch.
George: Can’t argue with that. I wasn’t watching them. I was watching Spain. I had a lovely time. Thanks.
Paul: I don’t know. I saw virtually none of it. Something that popped up that is just of a more general interest with regards to football is, have you seen this scheme that Leeds United have come up with?
George: No.
Paul: Like most well-supported clubs, they have a large number of supporters that attend every single game. And you get tickets for the away games based on how many games you’ve attended previously, like this sort of credit system that Everton deploy and virtually all other clubs with a large away following deploy.
And I think Leeds have got something like around about 400 fans that went to every game last season. I’m sure Everton have got a much bigger number than that, but nevertheless, you know, 400 fans represents a fairly significant number.
And Leeds have written to all of those fans saying, you know, thanks very much for your support. Great that you are our most loyal supporters as you go home and away. You know, we want to say thank you to you.
And how we’re going to say thank you to you is we’re not going to offer you individual match tickets for away games next season. We’re going to offer you an away season ticket. So you get a season ticket that guarantees that you can go to every single Leeds game away.
So obviously, you’ve probably got a home season ticket, but let’s just look at away games and you think, well, that’s that’s a great idea. You know, it saves a hassle of having to like all the tickets, etc, etc, etc.
Except that to buy the away season tickets costs £150 more than it would do to buy tickets for each individual game.
Andy: Oh, dear.
George: Why?
Paul: Now, because Leeds believe that they’re offering you a service.
George: That’s hilarious. And have we got any figures on the take -up from this? From gullible people.
Paul: Not yet, I think it was only announced this morning, it’s actually £850 for an away season ticket, which is £151 more than it would have been had you bought tickets at every single game, Premier League games last season.
Andy: But don’t forget, they’re in the championship again, there’s more games. Yeah. They’ve got 46 games, so they’ve got… So they’ve got four more games. Four more games, which at £30 a ticket is £120.
Paul: Yeah, but the way I suppose I’m arguing against myself here because the 30 pound limit doesn’t apply, does it, in the championship?
Andy: Oh, does it now?
Paul: I don’t think so.
Andy: All right, I thought he did. Oh, dear.
Paul: And that may, that actually may be the logic behind it. But anyway, it just seems like, what a great idea, first of all, because it solves all the problems of people having to go onto his systems at nine o ‘clock on a Monday morning and there’s a book that tickets this and the other.
And if you are minded to go home in a way, well, you know, that’s one hassle taking taken house on the way. And then you think, well, okay, so let’s say, let’s say it applies to 400 members who’ve been to every game beforehand.
150 quid each. That’s what, you know, that’s the profit that you’re making on this. It’s hardly worth doing. 60,000 pounds, isn’t it?
Andy: Thank you.
Paul: It’s not.
Andy: It’s not worth it. Is the deal just match tickets or does it include travel? No no just match tickets. Because I think I’m right in saying that Stoke City and they certainly have done for the last two or three years and I assume are doing it again this is because a guy I used to work with is a Stoke season ticket holder.
He told me that if you buy a ticket for an away game for Stoke through the club obviously that the club provides travel to every away game. you
George: Yes, I’ve read that.
Andy: Yeah, which I thought was, you know, if it’s Stoke playing Plymouth, um, you know, that’s a fair hike. And if they get, if you’re getting free travel from the potteries to Plymouth and back, that’s a, that’s a hell of an inducement to sign up for away games.
George: I misheard you, Paul, and I thought you’d said, which, you know, at £60,000, it would be better PR than what they’re doing. They had given away tickets to the 400 fans who made it.
Paul: That’s charging them 150 quid more than they would have paid last year.
Andy: Well, but they’re guaranteeing them tickets for every away game.
Paul: Yeah, but you would argue that if I go to every game, I get a ticket anyway, because I’m top of the top of the credit queue for want of a better description. I mean, the only benefit you’re getting is you don’t have to go through the hassle of buying individual tickets.
George: Still have to watch Leeds play football.
Andy: That’s you just an alienator for wet Yorkshire, bro. It’ll be all right.
George: I’m all right in West Yorkshire, Andy.
Paul: Well, there’s Manchester and most of West Yorkshire off our Christmas card list, so. Yeah, well, there you go. I think, first one back after a couple of weeks and a lot of heavy topics discussed really, or one major heavy topic discussed.
Paul: But there it is.
George: Cool. Thanks, Paul. I appreciate that.
Andy: We await the machinations of the US courts in New York.
George: That’s going to take forever Andy.
Andy: Because that’s what everything seems to be hanging on, doesn’t it Paul?
Paul: Well, yes, and then whatever comes as a result of of that, because even if even if on Monday morning, the Southern District, the judge made a decision, that’s not going to be the end of it, because, as I say, there’s going to be appeals and there’s potential criminal investigations, and I emphasise potential, that may arise from this, which, again, is going to impact the sale of the club.
Andy: Yeah.
Paul: there is somebody did put it to me there is there is another solution and that is that Farhad Moshiri buys the 777 debt
Andy: If he had the money to do that, why would he not be looking to finance the club?
Paul: be one solution. And then the liability, or any potential liability in the future becomes his as against the clubs. But again, I don’t think he’s going to do that. But that is the route of the mess.
Paul: Anyway, we’re in danger of going back over ground that we just covered in the last hour or so. So gents, let’s leave it there. Cheers, guys. It’s good to be talking again. And thank you to everybody who’s been asking when the next Talking the Blues is out.
Well,
Andy: There you go.
Paul: It’s going to be out now by the time you’ve either read or listened to this.
Andy: Yeah.
Paul: And yeah, we hope, well, hope somehow to be able to offer better news in the weeks ahead.
Andy: Yeah. All right. Yeah.
Paul: Okay, George Andy, thank you very much, lovely to speak to you both, thank you to everybody for listening and all reading and we’ll speak to you soon.