CHAPTER 1:
2014: BILL KENWRIGHT AND FARHAD MOSHIRI BEGIN TALKS
Bill Kenwright and Farhad Moshiri. Two men from very different backgrounds, whose paths would cross in 2014, and whose aims would centre around Everton Football Club.
According to Joe Strange, writing for The MailOnline in July 2016, “Moshiri first met Bill Kenwright towards the end of 2014 and expressed an interest in buying a stake in the club.”
Kenwright, a successful actor and theatre impresario, had been on the Board of Everton since 1989 and held the post of chairman since 2004. For years, he had made no secret of his wish to find a wealthy individual or investment group to take over at the club.
“Once again, try as I might, I was unable to accomplish the task which has dominated my life for these past few years – finding the man, or the institution, with the finances to move us forward. Hopefully the day will come soon when I happily – even enthusiastically – hand over control of our beloved Club to a substantially wealthy individual or well funded investment group.” – Bill Kenwright, Everton Annual Report & Accounts, 2011
Moshiri, then 60, an Iranian-born financier, was the long-term business partner of one of the world’s richest men, Alisher Usmanov. Moshiri had spent two decades advising and supporting Usmanov and, since 2007, they had each owned shares in Arsenal Football Club with ambitions to win seats on the Arsenal board before pushing through a complete takeover. For that plan to succeed, they would have to persuade majority shareholder, Stan Kroenke, to sell out to them. But Kroenke, the American magnate, had other ideas, and was determined not to sell to the Russian oligarch and his friend. It was this impasse in North London which prompted Moshiri to sell his shares to Usmanov and look for opportunities elsewhere.
Moshiri had entered the world of football as a financier with an accountancy background, rather than as a football fan, but his involvement at Arsenal had whetted his appetite for being around the Premier League. It was a space he and Usmanov could see had good investment potential.
The investment in Arsenal by Usmanov and Moshiri, and Bill Kenwright’s search for a mega-rich investor, came on the back of a major change in the preferred ownership model in the English Premier League, triggered in 2003 by the actions of another Russian oligarch, Roman Abramovich.
“Looking back, it is hard not to regard the Abramovich takeover as the most significant single development in the Premier League era. Not in terms of what happened on the pitch, in a direct sense, but in terms of what it represented, both economically and culturally, for English football. ‘We all knew,’ [Sir John] Hall [formerly of Newcastle United] said. ‘Doug Ellis at Aston Villa, Bill Kenwright at Everton, even the owners of Liverpool, Manchester United and Arsenal. We’d all put our money in, but the oligarch took everything to a new level. A billionaire came in at Chelsea and, overnight, there was no way we could compete financially.’ – Oliver Kay, The Athletic, July 2023
In 2014/15, so-called “Chelski”, backed by their Russian billionaire owner had romped away with the league.
Behind them, were Abu-Dhabi owned Manchester City, followed by Arsenal, Manchester United, Tottenham Hotspur and Liverpool. The “Top-6” seemed like a cartel.
Why not a Top-7, including Everton, the team which had played more games in the top-flight than all the others?
Kenwright argued to all potential investors that his club was a sound proposition. All it needed was more investment in players and facilities, to cement its place back among the elite of Premier League clubs.
If Chelsea and Manchester City could do it, why couldn’t Everton?
The potential investment upside in Everton FC was enticing, and Moshiri knew it. He had taken counsel from David Dein, a close friend of Kenwright’s and former vice-chairman of Arsenal between 1983 and 2007. When Moshiri began his due diligence process in 2014, on a potential investment in Arsenal’s oldest rivals, it was only natural he would turn to Dein for advice.
David Dein had joined the Arsenal board when he bought a 16.6% stake in the club for £292,000 from Peter Hill-Wood, Arsenal’s chairman. Hill-Wood described Dein as “crazy” to invest his money in the club, stating that, “to all intents and purposes, it’s dead money.”
Dein had built up his shares until, by 1991, he owned 42% of the club. Over the next decade, debts incurred forced him to sell just short of a 30% stake to co-director Danny Fiszman for approximately £11 million. By 2007, his remaining shares were worth around £60 million.
Alongside Philip Carter of Everton, Dein had been one of the architects of the Premier League in 1992, who reshaped the structure and finances of English football.
“I felt football was really a sleeping giant and had a long way to go,” Dein said. “After seeing how the Americans operated their sport, particularly American football and baseball and basketball, I felt we were light years behind. We had so much more to give as an attraction.”
Greg Dyke, later the chairman of the FA, stressed the central role of Dein in the Premier League’s creation, saying “David Dein was the most revolutionary bloke I’ve met in football. David Dein created the Premier League. It was his idea.”
During his time at Arsenal, Dein had an active role in transferring players and contract negotiations, including Ian Wright from Crystal Palace for £2.5 million and Dutch international Dennis Bergkamp for £7.5 million from Internazionale. He had been behind the appointment of the little-known Arsène Wenger for the manager’s job in 1996. Under Wenger, Arsenal won the Premier League three times and the FA Cup seven times, and Dein strongly backed him and his transfer plans.
Dein had also been influential in the transformation of Highbury into an all-seater stadium. Following the Hillsborough disaster, the Taylor Report required Premier League clubs to introduce all-seater stadiums. Dein was behind introducing a bond scheme, which proved unpopular with the fans, to finance the redevelopment of Highbury’s North Bank and Clock End terraces into all-seater stands.
He also helped Arsenal’s entry into the group of major European football clubs in 2002 and became President of the G-14 in October 2006. He was also President of Arsenal Ladies Football Club, while Arsenal vice-chairman.
The Gunners had invested heavily in the development of their new stadium, which meant the club needed new revenue to service the heavy debts they had incurred as a result. The other board members allegedly signed a contractual agreement that they would not sell their shares for a year, and they jointly expressed their intention to keep their shares in the longer term. Dein, however, was in favour of a takeover of Arsenal by an external investor, and on 18 April 2007, he left the club due to “irreconcilable differences” between himself and the rest of the board.
In August 2007, and this is where it gets really interesting, David Dein sold his 9,072 shares (14.58%) in the club for £75million to Red & White Holdings, an investment vehicle owned by Russian metal billionaire Alisher Usmanov and his business partner, Farhad Moshiri.
Usmanov and Moshiri appointed Dein as chairman of Red & White, which was at the time the largest shareholder in the club outside of members of the board of directors. In September 2008, he resigned as chairman of Red & White, with The Times suggesting it was to improve relations between Arsenal and Red & White.
But six years later, in 2014, relations between Red & White Holdings and the Arsenal board had gone from bad to worse.
With Arsenal still in a state of impasse, it was time for David Dein’s close friend, Bill Kenwright, to enter the scene. Kenwright had been looking “24/7” for a ‘messiah owner’ to whom to sell Everton, and with it, some or all of his 26% shareholding in the club.
The relationships between Dein and Red & White, and between Dein and Kenwright, provided the green light for Kenwright and the Everton board to open discussions with Moshiri. It also opened the door to a potentially tantalising future deal with one of the world’s richest men, should Alisher Usmanov ever sell his shares in Arsenal.
At the time talks began between Bill Kenwright and Farhad Moshiri, few people outside of Moshiri’s circle of acquaintances knew much about him. An article published under the headline: Iranian Moshiri Becomes Billionaire Helping Russia’s Richest Man, provided some of the backstory:
“In 1989, Farhad Moshiri was an emigre in London pulling a pay check at Deloitte & Touche when he met Alisher Usmanov. Now, after a two-decade alliance with Russia’s current richest man, the Iranian-born accountant is a billionaire himself.
“Moshiri who owns 5 percent of Usmanov’s Metalloinvest Holding, Russia’s largest miner of iron ore, and 15 percent of Arsenal Football Club, is worth at least $1.1 billion, according to data compiled by Bloomberg.
“Usmanov, 58, rewarded Moshiri, [then] 56, for years of service as an adviser and confidant in 2008, granting him a 10 percent stake in Gallagher Holdings, through which Usmanov controls Metalloinvest. ‘He was consulting me for decades on different deals and exercised his option, fairly getting the stake,’ Usmanov said in a telephone interview from Moscow. Usmanov and Moshiri both declined to elaborate on the terms of the option.
“Metalloinvest accounts for the bulk of Usmanov’s fortune, which has swelled to more than $20 billion through timely bets on tech companies, including Facebook. Metalloinvest is worth at least $16 billion, valuing Moshiri’s share at a minimum of $800 million. The company values itself at as much as $20 billion, chief executive Eduard Potapov said in February.
“For Moshiri, the road to riches started with a revolution. ‘My parents fled Iran in February 1979, just before the Iranian Revolution,’ Moshiri, now a British citizen, said by e-mail. ‘My father was an army doctor who trained as a pathologist and later became a senior military judge. My mother came from Iran’s leading publishing house, Kayhan, which is now based in London.’
“The billionaire studied accounting at the University of London and worked at Ernst & Young and Pannell Kerr Forster before joining Deloitte & Touche. He said he met Usmanov through a mutual friend, Masoud Alikhani, when Usmanov was in London as part of a ‘high-level delegation’ seeking ways of setting up a political-risk insurance company to encourage foreign investment in the Soviet Union.
“‘I was very taken at the time by his intelligence and the speed at which he absorbed complex ideas,’ Moshiri said.
“The feeling was mutual, said Usmanov, who was born in the former Soviet republic of Uzbekistan, which, like Iran, borders Afghanistan.
“‘We became friends almost at once,’ Usmanov said.
“‘With time, Moshiri actually became my financial mentor,’ Usmanov said in the telephone interview. ‘I appreciate his honesty and his encyclopaedic knowledge of finance and investments, although some of my most successful investments I did contrary to his opinion.’
“Moshiri has been chairman of Metalloinvest since 2006 and represents Usmanov on the boards of some of the other companies Usmanov owns shares in, including Norilsk Nickel, Russia’s largest mining company, and MegaFon, the second-largest mobile-phone operator in the country.
“Not all of Moshiri’s investments involve Usmanov. He bought 9.9 percent in 2007 of Panmure Gordon, one of Britain’s oldest stockbrokers, without Usmanov’s help. Now he holds 4.99 percent in the company.
“Still, the partners share a love of soccer, particularly Arsenal. Their Red and White [Holdings] venture bought 15 percent of the London club in 2007 and have since increased that stake to 30 percent, worth about $238 million, based on the April 3 closing price on the London Stock Exchange.
“Moshiri is an equal partner in the investment, according to Arsenal’s website. A 15 percent stake in the club has a market value ‘I love Arsenal, that’s why I’m a shareholder,’ Usmanov said in an interview last year.
“Moshiri said he was attracted to Arsenal’s ‘position as a top London club’ that had just moved into a ‘purpose-built’ stadium that can seat 65,000 fans.
“It’s one asset they may never sell. ‘We’re keen to invest further to secure the future success of the club on the playing field,’ Moshiri said.”
Ultimately, Farhad Moshiri’s time at Arsenal was frustrating. Yet, he had gained knowledge and contacts which could be put to good use. The possibility of taking control of another Premier League club was opening up before him. Was this the time to strike out on his own?