Everton paid £30m in interest to lender linked to tax exile
Everton Football Club has incurred around £30 million in interest fees to a lending entity linked to a tax exile, according to corporate documents.
The accumulated interest charges have reportedly averaged around £438,000 weekly, as indicated by Everton’s latest financial reports. This amount significantly surpasses over threefold the salary of Everton and England’s goalkeeper, Jordan Pickford.
However, a notable portion of these financial outflows has been omitted from Everton’s recent profit and loss statement due to a contentious modification in their accounting practices. This change has resulted in the presentation of reduced financial losses and could potentially lead to further penalties from the Premier League due to possible points deductions.
Amid heightened examination of its financial management by the Premier League, Everton recently faced point deductions for the second time this season for violations of profitability and sustainability regulations.
Furthermore, the club’s auditors have expressed concerns regarding “material uncertainty” about future funding. This situation casts doubt on the club’s financial stability and its capacity to continue operating. Amid these financial uncertainties, 777 Partners, an interested purchaser, has been attempting to secure the necessary funds to finalize its acquisition of the club for the past six months.
Everton, a historic founding member of both the Football League and the Premier League, reportedly has debts exceeding £500 million to various third-party lenders. A significant portion of these interest charges, detailed in the annual report, relate to approximately £225 million of debt accumulated with the club’s principal lender, Rights & Media Funding (RMF). In the last fiscal year, Everton paid about £23 million in interest, with an additional £7 million paid in the two preceding years.
RMF, based in Cheshire and operating without any employees, sources its capital from opaque offshore companies to lend to football clubs. Notably, around 70% of RMF’s loans have been allocated to Everton, as per the latest filings available with Companies House.
Investigations into separate offshore jurisdictions indicate that the trail of Everton’s debt through RMF leads to Michael Tabor, a businessman based in Monaco and Barbados. Tabor began his career in the gambling industry, eventually selling his chain of betting shops to Coral in 1995, and later profiting from investments in the fitness industry. He is currently involved in various businesses including ownership of the media company Global, the BetVictor gambling brand, and numerous racehorses. His net worth is listed as over £600 million by last year’s Sunday Times Rich List.
Documents also show that RMF’s funding has recently come from two entities: Galloway (Cyprus) and Carroch (Bahamas), with further records indicating that Galloway is owned through another company based in the British Virgin Islands, which is identified as being owned by Tabor. However, Tabor did not respond to inquiries regarding his involvement.
The ownership of Carroch (Bahamas) remains unclear, although Tabor has previously been associated with similar financial activities.
The handling of such high interest charges is particularly sensitive at Everton due to recent breaches of financial regulations, which penalize clubs for excessive financial losses as part of the Premier League’s sustainability efforts.
Everton’s latest financial disclosures reveal a strategic shift in accounting methods that excluded £19 million of interest charges from its 2023 profit and loss account, also retroactively adjusting the 2021 and 2022 financial statements to omit an additional £6 million in interest expenses, effectively reducing its reported losses. This decision was justified on the grounds that the interest pertained to the construction of the new Bramley-Moore Dock stadium, categorizing it as an investment. This is in contrast to previous statements from the club, asserting that RMF funds were not used for stadium financing.
The RMF debt currently incurs interest charges at 5% above the Bank of England’s base rate, translating to an interest rate of 10.25% for Everton. Had the club’s accountants maintained previous accounting practices, the financial losses for the recent fiscal year would have exceeded £100 million, rather than the reported £89.1 million.