Yahoo Finance What Everton fans should know about 777 Partners’ ownership of Vasco da Gama
Everton’s prospective owner, 777 Partners, has rapidly amassed a network of football clubs, including Vasco da Gama in Brazil, where questionable loans, a transfer ban and a narrow escape from relegation have raised concerns among some fans.
After Vasco da Gama lost to Flamengo in March 2022, 777 Partners chief executive Josh Wander told Brazilian media that, within a year, the club from Rio de Janeiro would match the budget of their big-spending rivals.
Now, as the private equity firm awaits approval from the Financial Conduct Authority and the Premier League for its takeover of Everton, Wander has promised fans of the Merseyside club that 777 “will instil a culture that demands and inspires two things: effort and accountability”.
But some Vasco fans have lost confidence in 777, as promises have appeared to go unfulfilled.
Club member Sergio Frias believes they cannot be held accountable if the terms of their deal remain undisclosed. “Any talk of transparency is inaccurate. Without transparency, everything [they do] causes distrust,” he said.
A Fifa transfer ban, late payments and curious loans have raised questions about the majority ownership, providing Everton fans with a test case in what to expect of 777 Partners.
777 Partners’ takeover
After consultation with members at Vasco, 777 Partners completed its takeover of the club in August 2022.
The multi-club ownership group bought 70 per cent of the football club’s shares for R$700m (£112m). This figure would be broken down into instalments and paid over four years.
The remaining shares in the football club would be held by Vasco’s civil association, which is made up of club members and administrators.
Control of the club’s debts totalling R$700m would also be assumed by the new owners.
Much of 777 Partners’ first instalment of R$190m (£30m) in 2022 went towards interest payments to creditors.
R$70m (£11m) of the investors’ first instalment was loaned to the club before the sale was completed.
The process bears some similarity to the proposed takeover of Everton, who have received more than £100m in loans from 777 Partners.
Using a portion of the loans provided by the Miami-based firm, Vasco signed Chilean midfielder Carlos Palacios. He was their only signing that year and left the club in early 2023.
The takeover was largely welcomed by fans, given their financial difficulty at the time. But some, including former Vasco and Real Madrid manager Vanderlei Luxemburgo, said the deal was too cheap and a “mistake”.
Unusual loans
Irregularities began to emerge by the end of 2022.
An unusual loan of $5m (£3.9m) from Vasco’s football club to F3EA Holding, a lender also owned by 777 Partners, made in November 2022 led to strong condemnation by Vasco members at a meeting in mid-2023.
Paulo Fonseca, the president of one of Vasco’s advisory committees, called it an “abuse of power” for the owners to use the club’s finances to fund other businesses it owned when the club was already under significant financial pressure.
While most of the loan was repaid to Vasco by July 2023, in the meantime the club was turning to lenders itself. One loan of €6m, in March this year, came from German bank Oldenburgische Landesbank Arktiengesellscaft.
Another loan of around R$12,000 (£1,900) was provided by Brazilian bank BMG two months earlier at a high interest rate of 22.4 per cent.
Eurico Brandao, a Vasco member and the son of a popular former club president, said that 777 had not been transparent.
“The owners are having a difficult time because they hit things, they don’t open up to fans about what has been done. This is a problem that needs to be resolved,” he said in July.
It is understood that 777 does not consider the loan to F3EA to be uncommon practice, and that Vasco received the money back with interest.
Late payments
Following their promotion to Brazil’s top league in late 2022, Vasco bought players including Léo Jardim from French club Lille and Puma Rodriguez from Uruguay’s Club Nacional.
But before the end of the year, Vasco were handed a transfer ban after Fifa found the club had not met payment deadlines for three signings.
The agent of Chelsea midfielder Andrey Santos, who mediated the midfielder’s multi-million pound transfer to the Premier League and a short-term loan back to Vasco, threatened to sue Vasco over delayed payments. The dispute was eventually settled in September this year.
777 Partners also failed to meet a September payment deadline for an instalment of R$120m (£19.4m) as part of the takeover agreed the previous year. The owners eventually paid it a month late. In 2024, 777 Partners is due to pay Vasco R$270m (£43.5m), and a further R$120m in 2025.
It has been reported that the Everton deal has not been completed as the Premier League wants guarantees of 777 Partners’ financial commitment. The Times also reported that the firm’s late payments to the British Basketball League, which it co-owns, put the competition at risk of administration.
What’s next for Vasco and 777 Partners?
Vasco were minutes away from being relegated from Brazil’s top division this month but managed to narrowly escape as Santos, the club which Pelé and Neymar played for, went down for the first time in the club’s history.
Days before the last game of the season, Vasco sacked their sporting director Paulo Bracks. He had joined the club shortly after 777 Partners’ takeover.
The club have appointed Alexandre Mattos as his replacement. Mattos joined from Atletico Paranaense where he oversaw the club’s development as they became one of Brazil’s best performing clubs.
The civil association is also reforming its historic statutes, adding protective layers which prevent 777 Partners from buying more shares in the club without approval from club members.
A new football department to oversee the investment firm’s ownership of the club has also been created.
Meanwhile, Vasco are embroiled in a long-running dispute with rivals Fluminense and Flamengo over their rights to play games at Rio’s iconic Maracana stadium.
There have also been long-running discussions between 777 Partners and Vasco on how the redevelopment of their own São Januário stadium may proceed.
Vasco fans will be closely watching how Everton’s takeover develops.
They may have also heard how 777 Partners have fared at sister clubs Standard Liège and Hertha Berlin, where fans have protested against the owners following poor results. Hertha Berlin now play in Germany’s second division following relegation last season.
“Until they prove otherwise, I have a lot of distrust in the company that bought Vasco,” former Brazil and Vasco star Edmundo said in a recent podcast. “When these late payments happen, it’s natural for Vasco fans to be worried.”
Sources close to 777 argue that the owners have invested in excess of $60m into Vasco since the takeover, more than the majority of teams in Brazil’s top division.
A spokesperson for 777 said: “We have more than fulfilled our contractual commitments to Vasco da Gama, and the club has made substantial progress both on and off the pitch over the past 18 months.
“Under 777’s stewardship, Vasco was promoted to and now remains in Serie A, one of the world’s most competitive leagues, while off the pitch the club is on a strong path towards financial sustainability, something very few clubs in Brazil can say.”
