Even with his background as a Hollywood movie producer, Dan Friedkin could barely have scripted a better start to life at Everton following his takeover from Farhad Moshiri.
When Friedkin was finally handed the keys to Goodison Park after the protracted deal process to end all protracted deal processes, Everton were 16th in the Premier League table and flirting with administration.
The Friedkin Group wasted no time in making hires at the front and back of house, with the new American owners keen to breathe fresh air into the corporate structure left by Farhad Moshiri.
David Moyes replaced Sean Dyche in the dugout, while Kevin Thelwell has now announced he will be stepping down as sporting director in the summer.
Perhaps most significantly of all, highly rated Leeds United executive Angus Kinnear has been named as CEO. He too will take office after the conclusion of the season.
Kinnear’s primary responsibility will be to manage the transition to life at Bramley Moore Dock, ensuring the club is in the best position to benefit commercially from their new home.
Farhad Moshiri has briefed that Everton stand to earn £43.7m per year through the turnstiles at the 52,888-seater stadium, which is almost three times what the Toffees earn at Goodison Park.
For a club whose narrative has been driven by Profit and Sustainability Rules (PSR), debt and cash flow issues in recent years, the stadium will be transformative.
‘Transformative’ – Everton fans will have to get used to hearing that word in the next few months.
Dan Friedkin is extraordinarily wealthy independently, one of the richest private individuals in the sport, in fact. But at Everton, PSR is a brace that will limit how much he can flex his muscles financially.
Increasing revenue therefore is key, and the new stadium will be both a massive matchday income generator and beachhead for outsized commercial growth.
Everton’s revenue growth rate has been slower than many of their peers in recent years. Their stasis was compounded when Alisher Usmanov was forced to end his sponsorship deals with the club.
In terms of the profit-and-loss account too, Friedkin has inherited a basket case after the Moshiri regime were swept up in the Premier League’s wage and transfer space race without the turnover to match.
The existing administration has done well to taper losses in recent years. There has been far more restraint in the transfer market and, after passing PSR in 2023-24, the immediate threat has passed.
But even with the move to Bramley Moore Dock now in sharp focus, The Friedkin Group are not ready to turn on the afterburners just yet. Blockbuster signings will have to wait until things have stabilised.
Part of the reason the Toffees are in that position is because of the stadium debt, which has come from a syndicate of commercial lenders whose M.O is to charge dizzying interest rates.
Now, Friedkin has refinanced the debt with a £350m arrangement steered by JPMorgan. The new deal stretches repayment over a longer term at a more manageable rate.
With PSR set to stay for at least another season, ensuring interest repayments didn’t eat into their bottom line too much and effectively wipe out the Bramley Moore Dock boost was an A1 priority for Friedkin.
Incidentally, TBR Football understands that Everton voted in favour of keeping PSR for another year.
Some reports have suggested that Everton could save as much as £50m per season in interest payments under the new deal, though those TBR has spoken to suggest that figure may be slightly overblown.
But the new arrangement will relieve the pressure on Merseyside – that is not in doubt.
New Bramley Moore Dock debt deal lets Everton maximise revenue at new stadium
In some cases, the loans from Rights and Media Funding, MSP Sports Capital and a handful of opaque overseas lenders were struck at interest rates of 15 per cent.
For context, SONIA, an index that reflects average interest rates across the UK economy, is currently closer to 4.5 per cent.
If the new syndicated agreement with JPMorgan is in that region, Everton will go from paying somewhere in the region of £40-50m in annual interest to somewhere closer to £15m.
Speaking exclusively to TBR Football, Liverpool University football finance lecturer Kieran Maguire extolled the virtues of the new arrangement.
“They would certainly have been paying premium rates to the previous lenders,” said the Price of Football author.
“If you take a look at the amount of interest capitalised and added onto the cost of Bramley Moore Dock, they will make significant savings.
“The Friedkin Group have a much higher credit rating than Everton did under Farhad Moshiri. They have a broader asset base and are less reliant on external assistance. As a result, Everton will be able to surf the wave in terms of paying a lower rate.
“The stadium is now online, so those interest costs will be charged against profits instead of being capitalised.
From a net point of view – which is the way you’ve got to look at it – revenue from hospitality, advertising, naming rights and so on less the extra maintenance and interest costs, they will be looking at a positive.
“Anything that can be achieved in reducing that cost base and benefit from The Friedkin Group’s high reputation in the world of debt finance can be significantly beneficial to Everton.”
Before he finally landed on Everton, Dan Friedkin explored the possibility of buying into Tottenham.
There is trend here, as MSP Sports Capital – who were also in the running to buy the Toffees at one stage – were also interested in Spurs at one stage.
The appeal of the North London club is clear. The stadium is a money-printing machine whose effects Everton want to mirror with their own new waterfront home.
What’s more, Daniel Levy managed to secure the best possible terms on the loans he took out to build the Tottenham Hotspur Stadium.
Most are fixed-term and in the 2-3 per cent bracket. That is unthinkable in in the current macroeconomic environment, as Maguire explains.
“If we look at what we’ve seen at Spurs, matchday revenue is up by £90m, commercial revenue is up by £100m.
“Against that, they have higher depreciation costs, which are a non-cash expense and don’t count towards PSR, so I don’t get too worked up about them.
“Spurs have been absolutely brilliant at borrowing on a long-term basis and at the right time when debt capital was extremely cheap. They are only paying about £25m per year in interest.
“They have set a high watermark that Everton won’t be able to achieve, but on a net basis we will be looking at an eight-figure sum.”
Everton minority shareholders lose value after Dan Friedkin takeover
The structure of Friedkin’s takeover saw new shares created, with loans converted to equity to meet new Premier League rules on Associated Party Transactions.
A downside of that has been that the club’s minority shareholders – who are mostly fans – have had their stake in Everton diluted, which in turn has decreased the value of their shares.
Some investors have spoken about losing hundreds of thousands of pounds in value. To them, the Friedkin reign and move to Bramley Moore Dock has been coloured by the makeup of the deal.
TBR has spoken to many who are sympathetic to the minority shareholders, while others said that they buyers were aware of the risks associated with holding a tiny minority stake in the club.
Ultimately, the shares arguably have no inherent value. Everton don’t pay dividends to shareholders and, given that the shares carry next to no voting rights, the market for buyers is extremely limited.
This is not a situation unique to Everton.
Tottenham also have a number of shares owned predominantly by fans who invested in the club when they were publicly listed, as do several other clubs in the English pyramid.
