What does Usmanov assets freeze mean to Everton?

Ian King
Everton sponsor Alisher Usmanov with Vladimir Putin in 2017.

Everton sponsor Alisher Usmanov has had his assets frozen by the European Union; what might this mean for a club already struggling on several fronts?

 

If the previous few days had brought considerable attention upon Roman Abramovich, the announcement of sanctions is now also shining a light on a name which may be half-remembered by many football fans. Alisher Usmanov has been keeping a relatively low profile in English football, but he’s been involved here for a decade and a half, even if the arrangements in place since he became involved at Everton have been somewhat unusual. But now he’s been sanctioned by the EU, what might this mean for Everton?

Usmanov was born and raised in Uzbekistan, but left for Moscow with the intention of starting a career in diplomacy. He returned to Tashkent, the Uzbeki capital, in 1976 with – somewhat ironically, considering recent events – a degree in international law to take a position as director of the Foreign Economic Association of the Soviet Peace Committee, an organisation which co-ordinated peace protests against wars or acts of militarisation by Western countries, but in 1980 he was convicted of fraud and ‘theft of socialist property’ and subsequently served six years of an eight-year prison sentence. This conviction was quashed in July 2000, nine years after the dissolution of the Soviet Union, by the Supreme Court of Uzbekistan.

In the late 1990s, he became General Director of Gazprom Invest Holdings, the investment-holding subsidiary of Gazprom, and managed it for more than a decade before leaving the company in 2014. Throughout the first years of this century, he moved into steel, copper mining, mobile phones and media, amongst many other things.

His involvement in sport is long-standing, and his arrival into the Premier League came in August 2007 when – together with business partner Farhad Moshiri – he bought a 14.58% share in Arsenal through his company, Red & White Holdings. Within weeks they were the second-biggest shareholders in the club, but the other directors resisted his further involvement, preventing them from getting to the 30% shareholding point, at which point he would have been required to launch a formal takeover bid for the club. His hopes of taking over completely at Arsenal were dashed when Stan Kroenke increased his shareholding in the club to 62%. He eventually sold his shareholding to Kroenke for £550m in 2018.

Moshiri sold his half of the shareholding that they jointly held in Arsenal to Usmanov early in 2016, in order to fund his purchase of a 49.9% shareholding in Everton, but although Usmanov’s name has come to be associated with the club since he sold up to Kroenke, he holds no formal position beyond that of being its major sponsor. In January 2017, Usmanov’s holding company USM entered into a five-year deal with Everton for the naming rights of the club’s training ground, Finch Farm.

In 2019 the mobile phone company that he co-owns, Megafon, became Everton’s sleeve sponsor and their official ‘matchday presenting partner’, which offered ‘significantly increased presence on matchdays at Goodison Park for companies within the Group’. In 2020, Usmanov also purchased the exclusive naming rights for Everton’s proposed new stadium at Bramley-Moore Dock, while MegaFon became sponsors of the Everton women’s team.

The financial issues at Goodison Park have been common knowledge for some time. Although Everton haven’t been close to insolvency, they did drastically overspend over several transfer windows. Premier League FFP rules limited clubs to a combined loss over a three-year period of £105m, and Everton posted losses of £13.1 million, £111.8 million and £139 million in 2018, 2019 and 2020 respectively.

They did get a little lucky when the Premier League postponed the March 2020 assessment. Instead, the March 2021 appraisal was amended to cover a four-year period — 2017/18, 2018/19, 2019/20 and 2020/21, with the last two periods being assessed as an average of the two seasons. This was all reflected in the club’s lack of activity in the summer 2021 transfer window, but as recently as January of this year Moshiri increased his stake in the club to 94%, putting in a further £100m. The accounts for the 2020/21 season are due at the end of March, and these will give a considerably clearer picture on whether the club has managed to clear its FFP mess.

Farhad Moshiri is not Russian. He has born in Iran, with his family moving to England shortly before the 1979 revolution there. Between 2006 and 2013, he served as the chairman of Usmanov’s mining company Metalloinvest, following which he was appointed as chairman of USM Holdings, the overall holding company which controls Usmanov’s other business interests. He is understood to be worth considerably less than Usmanov (£2bn, according to the Sunday Times 2021 Rich List, compared to Usmanov’s £13bn), but won’t be subject to sanctions over the Russian invasion of Ukraine.

The situation at Chelsea is complicated by the fact that Roman Abramovich owns the company that owns Chelsea, while Chelsea are indebted to the tune of £1.5bn to him. The situation is different at Everton, as Usmanov is not a director or shareholder in the club, preferring to remain no more than a ‘sponsor’. But all of this still throws Everton into a state of uncertainty.

Whether the move to Bramley-Moore Dock has to be considered in jeopardy is debatable. The cost of the new stadium is estimated at around £500m, and although Moshiri and Usmanov were never – either alone or between them – going to fund that entirely, Moshiri has committed to £100m, and financing the remainder of the project is unlikely to become easier as a result of the last few days’ publicity.  More concerning is that a further hole could be blown in the club’s finances, should they be relegated from the Premier League at the end of this season. They’re one place and one point above the bottom three at the moment.

It bears repeating that Everton are a symptom here, rather than a cause. English football really needs a period of reflection over what it’s been doing to itself for the last 20 or 30 years. Its moral barometer went out the window years ago in comparison with the ever-escalating arms race of spiralling wages and the growth of sportswashing, and it remains an industry that seems to have forgotten that it’s a sport.

The unforgiving spotlight currently being shone on the Russian oligarchs and the unspeakable behaviour of the Russian leader should result in uncomfortable questions being asked about the extent to which this country embroiled itself with such a despot. Who knows, it might even lead to meaningful reform. But none of that will be much of a comfort to Everton supporters as they survey the latest news. It may be that none of this ends up having a serious effect upon their club, but the feeling of uncertainty remains.