GENEVA (AP) — A grounded airline in Australia. A lawsuit in a New York federal court alleging fraud in connection to a $600 million loan. And angry soccer fans in England resisting a takeover of Premier League club Everton.
These are troubled times for Miami-based 777 Partners, the investment group that recently joined the wave of American owners in European soccer but is facing mounting problems in both the business and sporting world.
777 Partners owns soccer clubs in Germany, Italy, Belgium and Brazil but has failed to get approval for its bid to buy storied English club Everton — and the opposition is just growing stronger after its recent legal turmoil.
The Everton FC Shareholders' Association issued a statement on Tuesday calling on the club's board to “recognize that 777 Partners are not at this time fit-and-proper prospective owners.”
Earlier Tuesday, financial administrators of the collapsed Australian airline Bonza — which is owned by 777 — confirmed that all flights are canceled for one more week. The administrator added that it was “not in a position to process or issue refunds (to customers) on behalf of the company at this time.”
Last week, a suit was filed against 777 owners Josh Wander and Steven Pasko, plus others, in the southern district of New York by a London-based asset management firm providing $600 million in financing.
The suit alleges that about $350 million of collateral for the loans was not controlled by 777 or was already used as security with other lenders, in a practice known as “double-pledging.”
The 82-page suit on behalf of Leadenhall Capital Partners claimed that the owners were “operating a giant shell game at best, and an outright Ponzi scheme at worst.”
777 is “declining to comment at this time,” the company said in an emailed reply Tuesday.
The group moved heavily into soccer in 2021, buying up some of the many distressed clubs recovering from playing in empty stadiums during the COVID-19 pandemic.
“There was a unique opportunity the past three years to kind of get in at a good price point,” Jonathan Lutzky, an operating partner at 777, has said.
Here's a look at how those ventures are going.
777 reached an agreement with Everton in September to buy out the 94.1% stake of the club’s majority shareholder, Farhad Moshiri, subject to the approval of English soccer authorities.
The deal was expected to be completed last year but still hasn’t been finalized, leaving Everton -- already in financial strife and hit with two separate points deductions this season for overspending -- unable to plan for the future.
When asked by a parliamentary committee about the delay to the Everton takeover, Premier League chief executive Richard Masters said in January that certain deals take longer “if we haven’t had satisfactory answers to the questions we have asked.”
The Everton FC Shareholders' Association said Tuesday of the prolonged takeover bid that it was disrespectful “to allow this farce to continue.”
At least Everton has guaranteed its top-flight survival, ensuring access to the league’s huge pot of cash from broadcasting deals and prize money for another year.
Standard Liege fans have regularly protested against the American investors this season, amid reports of players’ wages being delayed. When Newcastle midfielder Isaac Hayden ended his loan spell at Standard mid-season, he cited the late payment of wages as the main reason.
Belgian media reported on Monday that the club's former owner Bruno Venanzi and shareholders of the company holding the club’s stadium had requested the seizure of 777’s assets in Belgium, arguing that the private investment company had defaulted on two tranches of payment.
The Liege tribunal did not immediately respond to a request for comments from The Associated Press.
Hertha Berlin was hoping for a change in fortune when 777 Partners took a 78.8% stake in March 2023, but it was too late to stop the team’s relegation from the Bundesliga and the money has only serviced existing debts.
Hertha faced an anxious wait before getting its second-division license thanks to a restructured loan. The club made no major signings and was forced to offload players. A team of youngsters avoided another relegation to the third division this year.
777 promised Hertha a 100-million euro investment when it took over. So far, it has delivered about 75 million euros.
Italy’s oldest soccer club was bought by 777 in 2021 and has since had serious issues with tax authorities.
Genoa was relegated from Serie A after 777’s first season in charge but then earned promotion back into the top flight after only one season in Serie B – despite being deducted a point for failing to pay income taxes in September and October of 2022.
Currently 12th with three rounds remaining in Serie A, Genoa has also secured a spot in Serie A for next season.
Genoa chief executive Andres Blazquez Ceballos was fined 6,000 euros ($6,500) by the Italian soccer federation for the tax payment failures.
In Brazil, 777 took over top-tier club Vasco da Gama’s soccer department in 2022 in a business operation locals know as SAF -- creating public limited companies in clubs often on the brink of bankruptcy. The tactic separates the profitable soccer departments from the rest of the club, which remains under control of its members.
The team from Rio de Janeiro narrowly avoided relegation from last year’s national championship and a financial statement published in March showed debts remain too high and investment is low. The club’s debts were at 700 million Brazilian reals ($178 million) when 777 took over. Only 210 million Brazilian reals ($41 million) have been cut so far, a massive difference compared to other clubs that adopted the SAF business model, such as Botafogo and Cruzeiro.
Club executives repeatedly accused 777 of delaying payments and causing problems for the squad.
“We are sitting on a time bomb,” Vasco da Gama vice president Felipe Carregal Sztajnbok said in March. “The (777) management has failed to follow the key guidelines of the SAF business law. They lack professionalism, transparency. They do not properly invest in infrastructure.”
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AP Sports Writers Steve Douglas, Samuel Petrequin, Ciaran Fahey, Andrew Dampf and Mauricio Tavarese contributed.
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AP soccer: https://apnews.com/hub/soccer
