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Kieran Maguire issues £300m ‘red herring’ claim as Everton braced for PSR charge announcement

Adam Williams

Tue 14 January 2025 6:15, UK

The Premier League’s infamous Profit and Sustainability Rules (PSR) expire at the end of 2024-25, but the champagne is still on ice for David Moyes and Dan Friedkin as they steer Everton into a new era.

As well as adapting to a new home at Bramley Moore Dock, which is still being referred to as ‘Everton Stadium’ in lieu of a naming rights deal, they also n🅷eed to acclimatise to a new set of s🌳pending rules.

TBR Football understands that the Premier League is on course to introduce a UEFA-st𒅌yle ‘squad cost’ cap, under which spending on wa𒆙ges, transfers and agents will be capped at 85 per cent of revenue.

Today, however, the Premier League will announce which clubs have been charged with breaching t🌳he £105m allowable loss limit for the three-year period up to 30th June 2024 under the existing system.

Everton have served as a punching bag for the Premier League’s PSR enforcers in r🐭ecent years, 💜weathered and frayed from repeated blows.

Last season, they a𒐪bsorbed two separate points deductions for breaches in 2021-22 and 2022-23. Ahead of today’s bulletin from the league, this rather one-sided bout might not be over j𒐪ust yet.

Everton are convinced they have complied – and a common sense interpretation of the rules ♚suggests they are spot-on.

But the world of football finance doesn’t do common sense. It prefers smౠoke and mirrors, accounting sleights of hand, and loopholes, and it makes projecting which teams are safe fro🅘m PSR a fool’s game.

Across 2021-22 and 2022-23, Everton lo🍸st £127.5m. We don’t have the all-important 2023-24 accounts yet, 💝but their deficit is reliably forecasted to be around £45m.

That gives them a loss of £172.5m for the rol💜ling three-year period, well over the allowable limit of £105m. However, PSR-exempt costs should see them fall well within the accepta𓃲ble threshold.

But – and it is a big ‘but’ – that relies on the Premier League excluding Ever🐠ton’s capitalisation of interest payments on loans taken out to build Bramley Moore Dock from the 🎉PSR calculation.

Infrastructure costs (i.e., the cost of building a new stadium) 𝄹are ▨exempt from PSR, but the Premier League argue that interest accrued on infrastructure debt is not.

An 𒐪indepen🥀dent tribunal will rule on that issue later this year.

It’s a big deal for Eveꦏrton, who have nine-figure stadium debt, meaning int༺erest payments being included in the calculation could conceivably tip them over the edge.

It’s all very complicated, soul-sapping stuff that makes you long for simpler times, when ‘superst𝓀ar’ lawyers and grey-faced executives hadn’t drained the life ✤force out of English football.

But for worse or for worse, this is the hellscape that Dan Friedkin must navig💞ate if he wants to be a success on Merseyside.

It has been a baptism of fire for the Hollywood financier turned sports investor, juggling seismic decisionꦆs on personnel and debt as well as PSR.

• READ MORE: Everton and Crystal Pal🐻ace b✨oth trying to sign rapid England Under-21 star

Dan Friedkin exploring £300m J.P. Morgan deal

In David Moyes, who has s𝐆igned a 𒊎two-and-half-year deal at Goodison Park, Everton have🍸 a familiar face to lead them into a new age in their history.

However, Everton are still very much a fixer-upper as far as the Friedkin Group are concerned, particularly 🦹in terms 𝄹of their stadium debt.

Friedkin largely cleared the decks at Everton, r🌄efinancing over £600m worth of high-interest debt in his company’s name, easing the burden on the club itself.

Now, report that, as well as a private loan to the Friedkin Group of around £130♛m, J.P. Morgan are in talks with investors about refinancing £300m worth of debt from the Bramley Moore Dock project.

Essentially, Friedkin is looking to reduce Everton’s debt ser𒁏vicing costs in the short to medium term and give th🅘e new regime more breathing space.

“We’ve seen at Everton that there’s been £684m worth of shares issued,” said Liverpool University football finance lecturer Kieran Maguire, speaking exclusively to TBR Football about the debt negotiations.

“Part of that will be the conversion of Farhad Moshiri’s quasi-debt into genuine shares, even though they were being treated as shares anyway as far as the accounts were concerned.

“There is going to be some fresh capital there as well, but in addition, it looks as though there is going to be £300m of funding arranged by JP Morgan on behalf of Friedkin.

“The reason that it is being done this way is because no one individual bank wants to be exposed to this amount of money.

“What JP Morgan will do is act as the agent putting together a consortium of lenders. This helps to spread the risk.

“Friedkin has relatively low credit concerns, so he will be able to borrow money at a cheaper rate.”

• READ MORE: West Ham and Everton target wins Golden Boot as Ronaldo prai෴ses 31-goal star

Kieran Maguire predicts Everton’s PSR status and January transfer spending

After such lean years in the recrꦆuitment and retention department, Friedkin’s coronation ౠat Everton has inspired optimism in the January transfer window.

And with David Moyes taking charge of a side wi🐻th barely any grace in this season’s relegation dogfight, there is a ge🐲nuine need for reinforcements this month.

Position	Team	Played MP	Won W	Drawn D	Lost L	For GF	Against GA	Diff GD	Points Pts
11	BrentfordBrentford	20	8	3	9	38	35	3	27
12	TottenhamTottenham	20	7	3	10	42	30	12	24
13	Man UtdManchester United	20	6	5	9	23	28	-5	23
14	West HamWest Ham	20	6	5	9	24	39	-15	23
15	Crystal PalaceCrystal Palace	20	4	9	7	21	28	-7	21
16	EvertonEverton	19	3	8	8	15	25	-10	17
17	WolvesWolves	20	4	4	12	31	45	-14	16
18	IpswichIpswich	20	3	7	10	20	35	-15	16
19	LeicesterLeicester	20	3	5	12	23	44	-21	14
20	SouthamptonSouthampton	20	1	3	16	12	44	-32	6

But do they have the wriggle room to spend and, significantly, could they also have to 🅘contend with retroactive punishment for the 2023-24 PSR assessment window?

“While the focus from the fans will be on the transfer market, I think that’s a bit of a red herring,” said Maguire, author of the Price of Football.

“Everton’s capacity to buy players in this window is very much dictated by PSR rather than the size of its credit card. That will be the main driver.

“We are currently in the position whereby Everton have had to submit their accounts for 2023-24 by the end of last year. Now, we will hear whether there are going to be any charges.

“My gut reaction is that Everton are probably just on the right side of the line, but there isn’t much capacity to spend there.”