Everton points deduction: Appeal board believes Farhad Moshiri left £200m stadium deal unsigned.

Everton cited a £200million financial black hole left by the loss of a £200million naming rights contract for their new stadium as a mitigating factor in the profit and sustainability breach but the appeal board argues that the club’s principal shareholder Farhad Moshiri did not sign the document.

Everton revealed in January 2020 that Alisher Usmanov’s holding company USM had paid the club £30m for the option of becoming the ground’s main sponsor and by March 14 that year – a week before lockdown for the coronavirus pandemic, another of the major mitigating factors flagged up by Goodison Park chiefs – the Daily Mail reported that the Blues had lined up a £200m naming rights deal for their future home at Bramley-Moore Dock with Usmanov, with sources close to the club telling them that a naming rights deal was “ready to go.”

In a portion of the appeal board’s entire written reasons dealing with Russian sanctions following Vladimir Putin’s invasion of Ukraine, it is stated: “Mr Moshiri’s evidence was that he hoped Mr Usmanov would invest heavily in an equity stake in the club. The club had already, on 7 January 2020, signed into an option and naming rights arrangement for the team’s training complex and new stadium with USM, Mr Usmanov’s company.

“This was to take effect from Season 2024/25, i.e. after the stadium had been opened; but, Mr Moshiri said, negotiations had reached an advanced stage to bring this forward to FY22, so that the naming rights sponsorship of £10m per season would commence during the construction phase in that financial year.

“The possibility of this revenue in FY22 was lost, he said, because of the sanctions imposed on Russian entities, including Mr Usmanov and USM, as a result of the invasion of Ukraine; which meant that the club had to withdraw from further negotiations with him. This loss of chance, it was contended, should have been taken into consideration by the Commission as mitigation.”

The report added: “However, in the Commission’s view, this was not a head of mitigation upon which the club could successfully rely to reduce the penalty. It did not diminish the club’s culpability because (i) the prospects of an agreement being concluded were uncertain, no documents having been adduced which showed that receipt of monies was probable (paragraph 124); and (ii) the loss of a proposed agreement, even if the agreement had been likely, was “no more than the type of event that businesses have to contend with as part of their daily life” (paragraph 125).

“As to (i), Mr Rabinowitz (the barrister leading Everton’s legal representation for the appeal) referred us to Board Minutes for both the club and Everton SDL in January 2022, which indicate that legal work had been done on the naming agreement, which it seems needed to be signed before third-party senior debt was obtained; and they were waiting for Mr Moshiri’s instruction. We know that Russia invaded Ukraine on 24 February 2022 and sanctions were placed immediately afterwards.

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