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Everton may have been hit with financial penalty as £225m Dan Friedkin development confirmed

Adam Williams

Mon 23 December 2024 15:45, UK

With The Friedkin Group now officially installed as owners, the keys to Bramley Moore Dock in their back pockets, and a new financial setup, it is fair to say now is a time of seismic change for Everton.

For the supporters who have had to shoulder the stress of their club perpetually dancing on the margins of Profit and Sustainability Rules (PSR), the end of the Farhad Moshiri era is a huge relief.

But even though the arrival of Dan Friedkin on Merseyside is a huge step forward, the Moshiri era will cast a long 🔥shadow for some time to come.

Everto๊n are still at risk of another point🦩s deduction, for example, because of the ongoing di🎀s𒁃pute about the capitalisation of interest payments for PSR purposes on loans taken out to build Bramley Moore Dock.

The Toffees are preparing for a hearing into that matter, although the fact that the Premier League’s leg⛎al team have been tied up with Man City’s 115 charges case has delayed p✨roceedings.

Sean Dyche’s side earned a 💖creditable point against Chelsea on Sunday, but they are still looking ove𝔉r their shoulder at the bottom three.

Position	Team	Played MP	Won W	Drawn D	Lost L	For GF	Against GA	Diff GD	Points Pts
10	BrightonBrighton	17	6	7	4	27	26	1	25
11	TottenhamTottenham	17	7	2	8	39	25	14	23
12	BrentfordBrentford	17	7	2	8	32	32	0	23
13	Man UtdManchester United	17	6	4	7	21	22	-1	22
14	West HamWest Ham	17	5	5	7	22	30	-8	20
15	EvertonEverton	16	3	7	6	14	21	-7	16
16	Crystal PalaceCrystal Palace	17	3	7	7	18	26	-8	16
17	LeicesterLeicester	17	3	5	9	21	37	-16	14
18	WolvesWolves	17	3	3	11	27	40	-13	12
19	IpswichIpswich	17	2	6	9	16	32	-16	12
20	SouthamptonSouthampton	17	1	3	13	11	36	-25	6

In the almost unthinkable event that they are relegated this season, fingers would be pointed at Moshiri’s overspending in his early years at Goodison that has sinc✤e restricted their ability to recruit.

Behind the scenes, Friedkin has beeꦫn tackling Everton’s debt situation, restructuring it and reducing the short-term burden on a club that have little room for manoeuvre in terms of spending rules🎃.

And new developments have show that the American billionaire has made his biggest move yet in this regard, which will h🦋ave co🃏nsequences in 2024-25 and beyond.

• READ MORE: Dan Friedkin’s Everton CEO candidate has history of smashing transfer records as ꧃£21m PSRꦗ boost confirmed

Everton in line to pay penalty clause for settling RMF debt, says finance expert

The exact figures are somewhatꦑ disputed, but Everton were straining under the weight of almost £700m worth of debt when Friedkin first entered talks with Moshiri.

The biggest indiv🍰idual loan was a £225m agreement with Rights and Med🐬ia Funding, which is said to have an interest rate of over 10 per cent.

That meant Everton were paying £𒁃22.5m in interest per year on the loan, and that would have continued to eat into their breathing space in terms of PSR.

But now, a Com♐panies House filing shows that the debt has been settled, with Friedkin believed to have personally struck a💃 new deal with JP Morgan, as opposed to placing the burden on Everton themselves.

Speaking exclusively to TBR Football, Liverpool University football finance lecturer Kieran Maguire says that the Toffees have likely paid an e🧔arly termination fee to Rights and Media Funding.

“I think we have to be a little bit cautious because there could be an early penalty with the RMF loan. That is fairly standard.

“We don’t know the small print, but The Friedkin Group would appear to have a much better credit rating than the previous regime and should therefore be able to borrow money at better rates.

“The previous regime was seen as distressed by the credit markets

“The Friedkin Group is effectively transferring the loan and putting some equity in. There will be marginal PSR benefit in 2024-25 at best.

“Everton fans can look forward to 2025-26 with more enthusiasm because, first of all, it is the first years of the higher matchday and commercial income, plus the interest rates will be tapering down.

“I think there will be an interest cost, because otherwise it would caught by the APT rules.”

• READ MORE: Darren Bent suggests Jose Mourinho could replace Sean Dyche as Everton man🍸ager after 📖takeover

How transformative will Bramley Moore Dock be for Everton’s finances?

Assuming Everton are in the Premier League next season, their new stadium on the banks of the Mersey c꧃ould add as much as £40m per season in commercial and matchday income.

Goodison Park is current𝓀ly generated less than £1m per match.

As well as a significant capacity boost, the new stadium w♎ill also be commercially orientated, extracting more cash from fans on the concourses and on the wider site.

A naming rights deal, 𝔍which could be worth north of £10m per season, is also just the tip🅷 of the iceberg in terms of the commercial benefits of Bramley Moore Dock.

The stadium has been designed as a multi-functio꧃n arena, so Everton could also rival Liverpool to host concerts and other non-foo✱tball events, which can be worth several million per time.