'Looks like a very good deal for 777' - a view of prospective Everton owners from Melbourne Victory

ECHO Everton reporter Chris Beesley speaks to freelance journalist Joey Lynch who covers Melbourne Victory about 777 Partners' investment in the Australian club

When announcing that Farhad Moshiri had agreed to sell all his shares to 777 Partners, Everton insisted the transaction strengthened the club’s balance sheet but does the Miami-based private investment firm’s deal with Melbourne Victory suggest they could be taking advantage of cash-strapped clubs?

Kieran Maguire, senior teacher in accounting and finance at the University of Liverpool Management School has branded the Blues’ prospective new owners as being a “Vampire Lender” but if so, is their bite going to prove the sharp shock this venerable but troubled football institution needs or just condemning them to becoming a next ‘victim.’ Melbourne-based freelance journalist Joey Lynch, who covers Victory, explains 777’s ventures ‘Down Under’ following the approval of their purchase of the A-League club in February this year.

Lynch told the ECHO: “Victory’s shareholders approved a proposal at an EGM earlier this year that would allow 777 Partners to take on up to a 70% stake in the club in return for a series of investments up the value of AU $30m over the course of four to five years.

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“During this process, the group can opt to walk away from the deal while being refunded their investments (only the additional investments, not the initial one that secured a 19.9% stake in the club) at a compounding interest rate of 10% per year.

“Given how favourable these terms were, even with the clarification that 777 Partners can’t recoup that initial AU $8.7m outlay, it has raised significant eyebrows and led to Kieran Maguire labelling them a “Vampire Lender” on The Price of Football Podcast. It certainly looks like a very good deal for 777 Partners.

“An independent analysis provided to shareholders at the time of the vote on 777’s stake determined that the deal was ‘not fair but reasonable’ to non-associated shareholders and a former director, Richard Wilson, who left the board in 2021 over disagreements over the club’s direction, said that it ‘wipes the value of the shares.’

“I have asked Victory managing director Caroline Carnegie if the club would be able to absorb 777 Partners opting to walk away on those terms and she was insistent they would be.”

Even though the Americans came on board when Victory were at a low ebb, supporters have also had to swallow their pride with 777’s purchase given that they were previously critical of local rivals Melbourne Heart being rebranded as Melbourne City in 2014 when joining the City Football Group that also join Manchester City. Lynch said: “There was some relief amongst Victory’s supporters at 777 Partners’ arrival as it prevented the club from potentially facing existential peril. Of course, that has since been joined by an increased trepidation as they learn more about the group and wonder what it might mean for their club.

“Influential fan podcast ‘For Vucks Sake’ recently did a podcast with Josimar journalist Paul Brown to discuss the group and the resulting episode did not paint the group in a good light at all. Even without the controversy surrounding 777 Partners, Victory’s fans have always prided themselves on being a Melbourne club that was owned and run by Melburnians and now that part of their identity has taken a hit.

“Given that their main local rivals Melbourne City are part of the City Football Group, sections of Victory fans have also spoken against multi-club ownership – once unveiling banners saying CFG was a disease on football – but now they too find themselves in, or at least minority owned by, a multi-club group.”

He added: “Historically, especially in times of adverse results, Victory’s supporters have also taken issue with an administration that they perceive as more worried about networking, corporate lunches/dinners, and commercialisation than an actual football club – former chair Anthony Di Pietro was often met by chants to ‘get out of our club – meaning that Josh Wander’s recent economist interview where he talks about clubs needing to monetise fans has also raised eyebrows.

“On the field, the club looks like it will be better than it was last season and will likely push to play finals football thanks to a combination of their improvement and a sizable number of other teams in the A-League Men getting worse. Director of football John Didulica, men’s coach Tony Popovic, women’s coach Jeff Hopkins, and academy director Joe Palatsides – all three of the best-credentialled in their respective fields at an Australian level – were all in place prior to 777 Partners arrival and Hopkins did visit the women’s side of 777 Partners-owned Standard Liege in the offseason.”

Seven months into the project then with a considerable part of 777’s strategy revolving around making clubs more sustainable and deploying their fanbases around spin-off products, how are things looking in Melbourne? Lynch said: “Given that we’re less than a year into 777 Partners’ involvement with Melbourne Victory and, at present, they only possess a 19.9% stake in the club there are relatively few definite things we can definitively point to as being something that wouldn’t have happened without the involvement of 777.

“The biggest tangible impact we can say the group has definitely made thus far has been their initial AU $8.7m investment in the club which secured them that minority stake and a place for Don Dransfield, the chief executive of 777 Partners’ football group, on the board. This helped sure up Victory’s parlous books after four straight years of losses, including an AU $6.7m loss in the 2021-22 financial year thanks to high expenditures (in an A-Leagues context) and COVID-hit income streams.

“It’s likely too early to say what kind of impact 777 Partners’ presence will have on the club’s footballing products, beyond their initial infusion of capital to help steady the ship. Those within the football department were in place prior to the group’s arrival and there are no real indications that the group’s presence has thus far played a sizable impact in any recruitment – if there has been, the club has not shared that.

“It is more likely that the offseason following the 2023-24 season will be much more telling given that at that point 777 Partners may have increased their stake in the club and Popovic will be coming to the end of his lucrative three-year deal.”

Although 777 Partners insist they treat their clubs equally, some are always ‘more equal’ than others and given that Everton are operating in the Premier League in England – world football’s toughest and most-lucrative domestic division, they would have to become the group’s marquee asset and placed at the other end of the scale to Melbourne Victory. In terms of a potential message to Blues from Australia, Lynch said: “It’s still too early to say what long-term impact 777 Partners will have on Melbourne Victory and the differences between the A-League club and Everton are stark. Everton, if approved, is being majority purchased, Victory is already settled into a stadium and doesn’t need a new one, and Everton, as a Premier League club, will almost certainly become the centrepiece of the 777 Football Group if they are acquired.”