Three years ago, 777 Partners was still a relatively unknown quantity in European football. At that time, the investment company was only a minority owner of Sevilla FC (Spain). From September 2021, things happened in quick succession: the takeovers of Genoa CFC (Italy), Standard Liège (Belgium) and Red Star FC (France) as well as the entry into Hertha BSC, then still a Bundesliga team, now second-class.
Now the company wants to buy the traditional English club Everton as part of its multi-club ownership strategy. But the takeover is dragging on. Although 777 Partners and owner Farhad Moshiri have been in agreement over a purchase of Moshiri’s shares in Everton since September.
Sports economist Breuer: 777 business model is difficult to understand
The reason for this is that the English Premier League and the Financial Markets Authority must approve the takeover. Recently, doubts arose about the liquidity of the Miami (USA)-based company. In October, the “Josimar” portal reported that 777 Partners would only be able to cover its own expenses with the support of the insurer A-Cap – and that rents and salaries were not always paid on time. The bonds were raised at interest rates of up to 20 percent. This raises questions about how this money will be raised again.
“When viewed from an economic perspective, the business model of 777 Partners is not easy to understand – or not at all,” says Christoph Breuer, sports economist at the German Sport University in Cologne. “I myself am always surprised at the investment companies and MCOs, i.e. multi-club ownership, that are active in the world of football. Many of them simply do not have a comprehensible business model.”
In November, ratings agency AM Best downgraded 777 Partners’ financial strength and creditworthiness. The investment firm meanwhile expects a decision from the Premier League by the end of 2023. Otherwise, 777 Partners may not continue to support Everton – Everton has already received over £100 million in bonds.
What does the investor hope to gain from owning several football clubs?
Johannes Spors, the sporting director of 777 Partners, described Everton as a “missing piece in the group” in an interview with the British newspaper The Telegraph. In the future, the company wants to create synergy effects between the clubs and develop a global talent pool – and at the same time they hope for increasing media rights revenues.
But first, more money must be invested. According to British media reports, the takeover of Everton would be worth £500 million. The risk of suffering a financial crash landing is significant. Spors told the “kicker” that a change of ownership always brings with it economic problems, but 777 has always solved them.
Everton’s plan is also being eyed by other clubs
Hertha BSC does not yet appear to be on alert regarding the possible acquisition of Everton. “And yet it’s still an issue,” says journalist and Hertha expert Marc Schwitzky.
He emphasizes: “So not everyone is interested in it, I would say, but rather they are looking very closely at how Hertha is doing at the moment. But a small number are of course interested in it and see whether there are any dangers. Because this investment is “Again, a very financially strong one and every investment can lead to the investor getting upset. And that would of course also have an impact on all other investments.”
On-time payments to Hertha BSC
The third tranche of 20 million euros was transferred to Hertha on time by 777 Partners in October. This means that over 50 of the promised 100 million euros have already been paid. “777 also played a significant role in the granting of the license before the start of the season. Without this investment, without these tranches, the DFL license would probably not have been possible,” explains Schwitzky.
The journalist and Hertha expert adds: “However, I must emphasize, it is not the case that 777 just transfers money and everything is fine. They very explicitly expect Hertha to do everything economically in addition to the agreed tranches, “to get back on the right track.”
The pressure to succeed for 777 Partners, which has recently attracted a lot of attention in international football, is enormous due to the high investments and high-interest bonds.