Everton FC’s Russian Connections Could Hurt The Club And Its Owner

The impact of Vladimir Putin’s invasion of Ukraine has shaken up one Premier League club, Chelsea FC, which is now exploring a potential sale. Could Everton FC be facing similar scrutiny?

It’s a question supporters of the Liverpool-based club may have to consider if majority owner Farhad Moshiri’s Russian connections, specifically his relationship with recently sanctioned, Uzbekistan-born billionaire Alisher Usmanov, attract attention from the British government. Since meeting in the 1990s, Moshiri, an Iranian-born British billionaire with a net worth of $2.9 billion prior to the Russian invasion, has worked closely with Usmanov, serving as a minority partner on multiple projects. A former accountant who worked at Ernst & Young and Deloitte, he has invested in several Russian companies through Usmanov’s holding company USM, including mining and steel manufacturer Metalloinvest and wireless communications outfit MegaFon. The pair also invested in Arsenal FC before Moshiri divested to purchase Everton in 2016.

Throughout last week, Usmanov has been sanctioned by the European Union, U.S. and U.K. Thanks to his alleged ties to Putin, the 68-year-old Usmanov, who Forbes last estimated was worth over $16 billion, is facing asset freezes and travel bans. His villa in northern Sardinia was reportedly frozen by Italian authorities on Friday, and his 512-foot mega-yacht, the Dilbar, remains in limbo. Usmanov isn’t the only Russian billionaire facing political pressure. On Wednesday, Roman Abramovich said he would sell Chelsea and donate the proceeds to benefit victims of Russia’s war in Ukraine as the threat of potential sanctions loom. Billionaires Hansjoerg Wyss and Todd Boehly, a minority stakeholder of the Los Angeles Lakers and Dodgers, have reportedly made an offer.

Moshiri and his club are distancing themselves from his longtime partner. Everton on Wednesday released a statement confirming that it had ”suspended with immediate effect all commercial sponsorship arrangements with the Russian companies USM, MegaFon and Yota.” That same day, Moshiri resigned his position as chairman of the board of USM. It is unclear whether he will divest his remaining share in the group, which he reduced to 5% in the past 18 months. USM declined to comment. Everton also did not respond to requests for comment.

“I think if this invasion continues, [authorities will] go down deeper into that network and it’s possible that they could identify [Moshiri] as an issue and ask him to step aside as well,” says Andy Appleby, chairman and CEO of General Sports & Entertainment. “Again, I think everything that we’re talking about is so unprecedented.”

Meanwhile, Everton is a money losing enterprise, having hemorrhaged roughly $350 million during the last three fiscal years (its 2020-21 report has yet to be released) and has stayed afloat largely due to the deep pockets of its owner. Since taking over in 2016, Moshiri has doled out a handful of interest-free loans and, as of Everton’s 2019-20 annual report, the club owed him a balance of roughly $460 million (his stake at the time was listed at 77.2%). Earlier this year, The Athletic reported that Moshiri injected another $130 million and raised his stake to 94.1%.

Complicating matters is just how intertwined Everton’s business has been with Usmanov. Moshiri’s former partner is not known to have any shares in the club—Everton lists 4.6% as “other shareholders.” But key holdings USM and MegaFon contributed to Everton’s record $84 million in sponsorship revenue during the 2019-20 fiscal year. Roughly $40 million of that came from USM purchasing a first-rights option to name Everton’s new stadium at Bramley-Moore Dock. Usmanov also reportedly brokered a deal to bring former manager Carlo Ancelotti to Goodison Park in late 2019, according to the Financial Times.

Everton isn’t the only Premier League club to kick out Russian sponsors. Last week, Manchester United dropped its $53 million deal with airline Aeroflot. However, with Usmanov and his business connections out of the picture, the lost revenue could be a critical blow.

Short of any government intervention, Moshiri’s personal finances aren’t in any immediate danger. He has a sizable cash pile on top of his equity in Everton (Forbes valued the club at $658 million in April).

“No matter how wealthy people are, they don’t want to lose money,” Appleby says. “And there might come a time where if you have no money coming in, you might not be able to continue to have this great prize asset, like a team like Everton or Chelsea.”

With additional reporting from David Dawkins and Forbes Russia.

The exchange rate of Great British Pounds to U.S. dollars on March 6, 2022 was $1.32 per £1.