Kieran Maguire explains Farhad Moshiri’s ‘exit route’ after £30m Everton blow
Potential Everton investors may be put off by the fact that the only way to make money is ultimately through selling their shares in the club.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about the Toffees’ profit and sustainability woes.
The Financial Times reported on Wednesday (16 March) that Everton are in talks over plans to strengthen their balance sheet after huge recent losses.
The Merseysiders have lost £250million over the last two Covid-hit financial years and have just lost £30m of annual investment from Alisher Usmanov.
It is claimed that raising equity is one option being discussed to offset the shortfall by the Russian benefactor’s forced retrenchment at Goodison.
Maguire assessed the pitfalls of raising equity by inviting new shareholders to join majority owner Farhad Moshiri.
“The advantage of equity is that it is never repayable,” he told Football Insider‘s Adam Williams.
“The downside of equity is that in a normal business environment, shareholders are the last in the queue to get financial rewards.
“In a football club, money goes first to players and suppliers, the bank, the Government etcetera. You have all of those stakeholders taking money out.
“The only time a shareholder can acquire money is through dividends. Football clubs historically do not pay dividends, unless you’re Man United.
“So the only opportunity to make money is through the exit route, the sale of the club.
“Because they take on the most risk in traditional business environments, they will say they are only going to invest if they are going to get a high return.“
Moshiri currently owns 94 per cent of Everton.
The British-Iranian businessman converted £100m worth of loans into equity in January.
In other news, expert “100 per cent” sure on Jordan Pickford quitting Everton after Athletic update.