Usmanov exit leaves £300m black hole
Everton must cut their cloth as sanctions bite
EVERTON face a black hole of up to £300million in their playing budget in the coming years due to the sanctioning of oligarch Alisher Usmanov, The Mail on Sunday can reveal.
Usmanov was due to sign a naming rights deal for the club’s ambitious new BramleyMoore Dock Stadium via his USM firm.
A ‘heads of terms’ agreement is understood to have been agreed with options that would give USM a minimum 10-year deal, extendable to 20 years, at a minimum cost of £8m per year, increasing under certain circumstances to £15m a year.
Had a 20-year deal unfolded at the highest price payable, Everton would have benefitted by £300m, and this was envisaged to be spent on players.
But Usmanov has now been sanctioned by both the EU and the UK for his closeness to Vladimir Putin, who is waging war on Ukraine. So Everton have ditched three commercial deals with Russian firms linked to Usmanov — USM, MegaFon and Yota — and cannot now go ahead with the naming rights contract. In another blow to the club, as the prices of steel and energy soar, the new stadium is having modifications made to keep costs down. Plans for a multi-storey car park have been ditched to save money while cheaper materials are being used, a source says. Parts of the stadium are also being prefabricated off site to save money.
While construction of the stadium is under way and financing remains possible via JP Morgan and other lenders, Everton will now find it harder to both repay their construction loans and fund players. A club source acknowledges that the cancelled naming rights deal will mean spending less on players.
Usmanov, 68, worth an estimated £14.75bn, made a one-off £30m payment to Everton via his USM firm in early 2020 to give USM first refusal on a long-term naming rights deal for the new state-of-theart ground. The ‘heads of terms’ contract shows a further maximum of £300m would follow for a multiyear naming rights deal for the 52,888-capacity venue.
But on Thursday the Government added Usmanov to their sanctions list of Russians who will have their British assets seized or frozen.
Usmanov is an Uzbek-born Russian citizen who made his money after the collapse of the Soviet Union, largely from metals and mining. He has now formally been deemed a close ally of Russian president Putin by the EU and the UK.
Everton’s cancellation of the USM, MegaFon and Yota deals won’t hurt Everton hugely in themselves; the club have already banked around £48m of their total combined value of £60m.
But the loss of Usmanov’s future naming rights cash plus the massive escalation in cost of materials are what will be causing concern to Everton owner Farhad Moshiri, a friend and close business associate of Usmanov. Moshiri has stepped down from his role on the board of USM in the wake of the EU and UK sanctions on Usmanov.
The mathematical conundrum for Moshiri is that the stadium was envisaged to cost £505m — and club sources say it still will. But in order to stay within that budget, the Bramley-Moore Dock project, due to be completed in 2024, will be different to the original scheme.
Official Government statistics show the cost of steel has risen by 56 per cent since 2017, while global supply uncertainties and rising energy prices continue to add costs to the overall bill.
A source close to the construction, who has also worked on other major British stadium projects in recent years, told The Mail on
Sunday: ‘Everton are struggling on construction budget… there are a raft of issues and risks for this project around supply chain, industry capacity and increased construction costs.’
Another source added: ‘The suspension of the [Usmanov] deals is a blow, but what will hurt going forward are the sanctions imposed on Usmanov, as he was a man with very deep pockets in the background.
‘Usmanov was helping the club to press ahead. His absence may impact on the Everton’s ability to service the debts from the stadium construction.’
Everton’s performances in the Premier League this season are an added concern to Moshiri as they remain embroiled in a relegation battle.
They began the weekend in 17th place in the table, just one point above the relegation zone ahead of their trip to Tottenham tomorrow.
Everton have played in England’s top division continuously since 1954. Demotion to the Championship would be a financial catastrophe given their spiralling football costs in recent times and their imminent indebtedness relating to the new stadium.
In six years of Moshiri’s ownership, Everton have spent almost £300m net on new players and splashed close to £1bn in wages, while faltering season after season as they have burned through managers such as Ronald Koeman, Sam Allardyce, Marco Silva, Carlo Ancelotti and Rafa Benitez before the current incumbent Frank Lampard.