Everton’s defining week amid 777 takeover uncertainty

Everton face a pivotal three games in seven days which could leave lasting repercussions on their long-term ambitions and Premier League prospects.

Another turbulent campaign on the pitch is running parallel to Everton’s highly uncertain future off it, as the 777 takeover saga continues.

BBC Sport breaks down the worrying financial and football situation at Goodison Park.

How much debt are Everton in?

The perilous position Everton find themselves in has been highlighted by two charges for breaching financial rules which have so far cost the club eight points.

A verdict on their appeal against two of those points is due before the end of the campaign.

The club posted losses of £89.1m for the accounts covering the 2022-23 season, with net debt rising to £330.6m.

Selling a home-grown prized asset such as Jarrad Branthwaite in the summer would contribute to ensuring they don’t fall foul of profit and sustainability rules for the third time.

Digging further, the amount Everton owe to third-party lenders is eye-watering, as laid out by fan Paul Quinn, who runs ‘The Esk’ blog centred on the club’s spiralling financial situation.

Quinn reports £580m of loans have been taken out from Rights and Media Funding (£231m), 777 Partners (£180m), MSP Sports Capital and two local businessmen (£158m), and Metro Bank (£11m), with much of the loans being used towards the building of the club’s new stadium at Bramley-Moore Dock.

Everton’s 2022-23 revenue was £172m, with a wages-to-income ratio at 92%. Despite a reduction in wages, the ratio was impacted by the loss of £20m in commercial revenue from Russian company USM and a 17th-place Premier League finish that season.

The club’s wages-to-income ratio goes down to 89% when taking into consideration certain operations that are outsourced externally.

The MSP loan was due to be repaid on Monday, but current owner Farhad Moshiri agreed an extension with the New York-based investment firm which for the time being resolves matters until the end of the season.

What’s happening with the 777 takeover?

It was back in September 2023 when Moshiri agreed to sell his 94% stake in the club to Miami-based investment firm 777 Partners. It was hoped the takeover would be completed by Christmas.

Supporters anticipated a new dawn – but seven months on talks continue to rumble on as the firm aims to satisfy the Premier League’s owners’ and directors’ test and show it can provide evidence of where the money is coming from and give proof of adequate funds for three years of the business plan.

777 co-owner Josh Wander has met with the Premier League as it attempts to push the deal through, but four specific pre-conditions have been put in place.

These include:

• Repaying the loans owed to MSP and two local businessmen
• Convert £180m of 777’s loans to Everton into equity
• Inject £60m for day-to-day operational costs to complete the season
• Fund about £100m for the completion of the club’s new stadium

Sources close to the takeover have told BBC Sport Wander “desperately” wants the deal to happen and the MSP loan, taken out for the construction of the new stadium, is the main stumbling block.

777 says it can stump up the £158m that is owed on that front, whether that be from its own balance sheet or via third party investors, and once that is settled, it is felt the deal should be completed soon after.

Could Everton go into administration?

With the 777 takeover dragging on, there have been suggestions that Everton could fall into administration if it does not get approved.

The Times reported there is interest from an American group who “remain in the shadows” to take over, but that would leave Everton back at square one.

They would need to go through the owners’ and directors’ test again, provide a minimum of 12 weeks in operating costs – at about £30m a month – and provide funding to construction company Laing O’Rourke for the new stadium.

Entering administration would be the final option when all others are exhausted but would undoubtedly be disastrous for the club.

Sean Dyche’s beleaguered side would be hit with an immediate nine-point deduction, at a time when every point is crucial as they attempt to claw themselves to safety.

But heading into the Forest game, Everton are woefully out of form with just one win in their past 15 games and have been left reeling from their embarrassing 6-0 drubbing at Chelsea three days ago.

Manager Dyche called into question the professionalism of his players after that game, saying they weren’t putting tackles in, while too many were “way off the mark” performance-wise.

At a time when Everton’s future is uncertain one thing is undeniable – more performances like the one they delivered at Stamford Bridge will leave the club staring at the Championship and bring to an end their proud top-flight status, which has been unbroken since 1954.