Dan Friedkin has been told what he needs to do to complete a smooth sale of Everton because it "isn't a particularly sexy proposition."
The Blues' Houston-based owners announced on October 9 that the club was up for sale, less than 22 months after they had completed their takeover to obtain Farhad Moshiri's 99.5% controlling stake. TFG's statement came after they had come in for severe criticism over how Everton's summer transfer window had ended.
Background to the Sale
Back in August, the day after Sky Sports broadcast manager David Moyes insisting: "We're still needing quite a few players to add to the squad," Blues chief executive Angus Kinnear invited BBC Radio Merseyside's Giulia Bould and fan media groups to a series of interviews at Hill Dickinson Stadium.
The CEO who is considered a mouthpiece for TFG – with chairman Dan Friedkin having never been to Goodison Park or Hill Dickinson Stadium or spoken to Moyes – claimed that the club's ownership considered last season a failure as "They have bought Everton to win football matches." In contrast to the remarks made by the 63-year-old who steered the Blues to nine top-eight finishes during his first spell in charge, including their highest ever Premier League position of fourth, he claimed: "I think the squad's in a really good place."
Kinnear also predicted: "This window again, I think we will spend more than most of our competitors, the owners are very keen to back us." However, after the window closed the Blues were down in 15th place among Premier League clubs when it came to net spend. Indeed, they were one of just half a dozen teams to make a trading profit.
Transfer Window Fallout
Although the owners performed a dramatic U-turn on plans to cash in on home-grown teenager Harrison Armstrong, who was set to be sold to Nottingham Forest for £40million before fans threatened to riot, they still pocketed over £100million on deadline day with their most creative talent Iliman Ndiaye, last season's top scorer Beto, Tim Iroegbunam and Nathan Patterson all sold, plus Adam Aznou loaned out. This ensured that following the late collapse of the purchase of USA World Cup star Folarin Balogun from Monaco, Everton were left with a first-team squad of 18 outfield players that contains just one striker, one left-back and one right-back.
Now, speaking on The Football Boardroom podcast, Christian Purslow, who was managing director and head of global commercial activities at Chelsea; managing director of Liverpool and chief executive of Aston Villa said: "He likes his planes and if I was Dan Friedkin, I probably wouldn't do it in my spitfire because it's a long way from Rome to Speke airport, but I'd get on a plane to Liverpool. I'm genuinely concerned about this whole sale situation.
"I've mentioned the Newcastle comparable under Mike Ashley. I think that process dragged on for four or five years, because rich men don't like losing money.
Valuation Concerns
"So you can be absolutely certain of one thing – that Dan Friedkin wants to sell Everton for a profit and at an absolute bare minimum, get his money back. Which would be an 800 million headline price.
"His asking price will be north of a billion quid, because why wouldn't you? He'll be hoping to get over a billion pounds for this football club, and in my opinion, there is very little chance he's able to do that as when I look at the underlying valuation considerations, I think £800 million would peg the club about four times turnover.
"While that is low relative to the kind of valuation that Jeff Bezos' group paid to get into Liverpool, that was near a seven times revenue and Todd Boehy's group into Chelsea, I think, was probably more like five times revenue, clubs outside the big six, without global revenue streams have tended to sell for much closer to sort of three, maybe three and a half times their turnover.
"What are you buying? The positive is you're buying a turnkey football club. If you want a ready to go, established Premier League team, with its stadium built paid for, and operational, and not a lot to do there, that's a big tick.
"But as I've alluded to, the notion that somehow the stadium has sort of grown, the value of the club, yes and no. The turnovers are probably 30 to 40 million pounds, but so are the costs.
"The mortgage that I've alluded to, I've even said that I would expect most buyers to leave that mortgage in place, costs you £30million a year.
"So, your £40 million of extra turnover, £30million of it is going on the loan used to deliver that. There's an extra 13,000 seats and then you've got to depreciate that stadium over the lifetime of that stadium.
"My gut feeling is the profits are about the same as they were before the stadium. The club lost in its last year before the move, I think £60 million at the profit before tax line.
"My feeling is, in the year that's just ending and we haven't seen those accounts yet, they'll probably lose a bit less than that. We know from the IFR report we talked to our audience about last week, the average Premier League club loses £44 million a year.
"I think Everton will be losing a bit more than that this year and they will be doing so for the foreseeable future. We know that they're quite close on the squad cost ratio, so it's not as though they can go out and spend a load more on wages with a view to majorly improving the performance of the team.
"So, it worries me that you're being asked to spend £800 million just to give Dan Friedkin his money back, for the right to lose £40-50million every year, which you, the new owner, have to put in on top of your £800million."
The 62-year-old added: "Before the Chelsea game last Saturday morning, I checked the table and they were fifth. This is a team that's going pretty well under David Moyes in the top half of the table but whose prospects of being top six, arguably seventh or eighth, with Aston Villa and maybe Newcastle a bit further ahead in the journey, how do you improve the team?
"That isn't a particularly sexy proposition to a very, very rich person who wants to buy a football club and make them better. So, I don't think it's going to be an easy sale.
"My key point for our audience today, and I'm coming to what I would do, and why I think Dan needs to get on a plane to Liverpool, is this could take some time. The one thing you can't afford, when you own a football club, let alone when you're trying to sell a football club, you cannot afford for the on-field to start drifting.
"They took a real risk in that summer window, leaving themselves thin, leaving themselves exposed to injuries. Just the sheer lack of numbers in that squad.
"If that team starts to drop down the league, getting this club sold for anything like £800million quickly is not happening. So, turning that on its head I think he needs to stabilise the situation."
Advice on Moyes
The former football executive was being interviewed by Henry Winter who suggested handing manager David Moyes a new contract would be a wise move given that his current deal expires at the end of this season. The Glaswegian gaffer steered Everton to nine top-eight finishes, including a highest-ever Premier League placing of fourth during his first spell in charge and along with serial title winners Sir Alex Ferguson at Manchester United and Arsene Wenger at Arsenal, he is one of only three bosses to accumulate over a thousand points in the competition.
Purslow said: "All I'll say to you is that long before I was in football, I was what's called a mergers and acquisitions banker in the early stage of my career. I was the banker hired to sell companies.
"In the first meeting with an owner looking to sell a business, in that first conversation, standard procedure, point number one, stability of management. You can't catch a falling knife.
"So, the first thing I would say to any owner of any business that's being sold is, is the management team stable? Can we go to market knowing that an owner can buy this business, and things are calm and stable, they can take their time, if they want to make changes to key executives or key managers, in due course, they can, but they're not buying a vacuum.
"In football terms, that means the coach. So, the fact that David is out of contract in the summer is a huge glaring negative for any prospective owner.
"I think this needs to be reversed. This 'trouble at mill' I've alluded to, where it felt to me like everything was a little bit out of control at the back end of that transfer window, you need to make David Moyes and his team an asset in a sale process.
"That means secure, stable, under contract, with a very clear plan, because any respectable buyer worth their salt, the first thing they're going to say is: 'I need to visit the training ground, meet the manager, and hear about the plans for the team.'
"What are the opportunities? What are the needs? What are the requirements? You need David onside.
"That means there needs to be complete unity of purpose and a crystal clear plan that can be sold to potential investors. That's how I would be doing that."
Winter pointed out that he believes "history will look very kindly on David Moyes as a manager," and keeping him at the helm will be hugely beneficial to helping the sale process.
Purslow replied: "Absolutely. I think that they got the appointment right, it was four weeks after they arrived, I think. It doesn't seem to me to be a decision to say: 'This is not going to be the easiest sale process, we need to nail a few things down, and that's the first and most obvious thing to do.
"This can be a good news story. Good work is being done, I don't want to ignore that.
"The clean-up job that's been done after the mess that they bought into has been extremely professionally handled. It is a completely different investment proposition in autumn 2026 to what Dan Friedkin bought into at Christmas 2024.
"It's a clean deal, okay? Yes, there are limitations on what you can do to improve the fortunes of the team from a regulatory standpoint, if not a capital standpoint.
"But it's a very, very, very established historic football club, and there are a queue of people in America who still seem to be attracted to the Premier League as an investment opportunity.
"Finding the right owner is key, I would argue, for Dan Friedkin to find the right owner, he needs his management team fully on board, fully engaged in that process and singing from the same hymn sheet. Otherwise, a potential investor and a potential owner is putting a great big question in mark against all those things and that ultimately will affect your value."
