The sports investment firm that has been in talks with Everton over acquiring a potential stake have a very clear idea of how they approach their deals.
New York-based MSP Sports Capital have, as first reported by Bloomberg, been in early discussions with Farhad Moshiri over taking a potential stake in the club, a move that would aid the efforts to lift some of the financial burden for completing the £500m-plus stadium development at Bramley-Moore Dock from the Everton owner.
During the Blues' chastening 2-1 home reverse to Southampton earlier this month, there were interested spectators sitting in the stands at Goodison Park as MSP co-founder and chairman Jahm Najafi, co-founder and CEO Jeff Moorad, and vice-president Pete Taylor, were all in attendance.
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Moshiri, Everton owner since 2016, last week denied reports that the club was for sale when speaking to the ECHO, and during a meeting with the Everton Fan Advisory Board (FAB) in the week leading up to the defeat at West Ham United, he stated that investment in the stadium was "close".
MSP's sporting investments are varied but they already have put down roots in football through their link up with Crystal Palace shareholder David Blitzer, co-founder of sports investment company Harris Blitzer Sports & Entertainment, and the creation of Bolt Football Holdings. The football investments that MSP currently have include German side FC Augsburg, G.D. Estoril Praia in Portugal, Spain’s AD Alcorcon and Belgian side SK Beveren. They also have a controlling stake in the extreme sports event X Games and a significant minority investment in the McLaren Formula One racing team, where Najafi, who is privately the second largest shareholder in the Phoenix Suns NBA team, serves as vice-chairman.
MSP co-founder Moorad, a former sports agent whose time representing clients in North American sport was part of the inspiration for the 1996 Hollywood movie 'Jerry Maguire' starring Tom Cruise, has given some clues to what kind of investor that they could be in Everton if any kind of deal was struck between themselves and Moshiri.
Speaking in a guest editorial for US sports business website Sportico in March of last year, Moorad wrote: "At MSP Sports Capital, we only pursue investments with operational control or significant influence.
"Fundamentally, investors are attracted to the disproportionate annualised returns available in sports, with limited relative downside risk. In order to achieve favourable risk-adjusted returns, investing discipline remains critical in an industry where emotion can easily take hold of the uninitiated. We believe it’s critical to evaluate both macro dynamics (trajectory of the sport, league management, league competition, regulatory environment) and micro dynamics specific to the asset (management team, brand power and digital presence, fan/sponsor loyalty, local market dynamics and real estate opportunities).
"We’re thrilled to be building a global soccer platform with partners David Blitzer and Bolt Football Holdings. We’re also fortunate to have a law firm like Morgan Lewis (a firm where Moorad has a roles as partner and chairman of the firm's global sports practice) on retainer—there is a premium on having the right professionals in place to be able to strike when a deal is hot."
In sports there are passive and active investors. Some choose to place capital into a team and bank on the continued rising of value of the asset until such time they want to pull their money out at a strong profit for their investors, while for active investors, they play a part in helping to put in place strategy and leadership to maximise opportunities and grow the value of the business using their own expertise and that of those around them.
MSP Sports Capital, based upon Moorad's comments and the leadership positions that have been taken up in some of their investments, notably Najafi's at McLaren Racing, points to them being in the latter of those two camps.
Both Najafi and Moorad have experience of sports team ownership, with Najafi the second largest shareholder of the Suns, a team who are currently the subject of a $4bn takeover deal by billionaire Matt Ishbia. Moorad has previously held minority ownership stakes in both the San Diego Padres and Arizona Diamondbacks Major League Baseball franchises.
Talks between MSP Sports Capital and the Blues are said to be at an early stage, but given the background of the group and the experience they possess they are comfortably the most credible interest to have arrived during the search for investment thus far.
Whether the talks manifest into a deal remains to be seen but, with a new stadium on the way and a club with global appeal, Everton are something of understandable interest. However, with the spectre of potential relegation looming over the Blues, who are now under the stewardship of new manager Sean Dyche, the potential risk to the value of the club as an investment should they go down won't be lost on interested parties. How team fare in the coming weeks under Dyche may play some part in the appetite to move any talks along at a swifter or slower pace.
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