US investor Josh Wander is building a football empire
In just 18 months, Josh Wander, representing 777 Partners, has amassed seven football-related investments, with the recent acquisition of a majority stake in the Premier League club FC Everton marking a notable milestone. Because anyone who plays in the British League with its enormous revenues has truly arrived at the top of the international football landscape.
Josh Wander, overseeing the football investments within the Miami-based holding company he co-founded with Steven Pasko in 2015, is the public face of the investor. 777 Partners pursues a somewhat daring strategy that underscores a deep understanding of capital markets. Their approach involves acquiring stakes in clubs that have encountered recent challenges, both in terms of performance on the field and financial viability, with the goal of unlocking their potential for a turnaround.
Recognizing opportunities and seizing them
A prime illustration are the investments made in Hertha BSC and Everton. During Farhad Moshiri's leadership, the British club experienced a period of mismanagement. Despite Moshiri's substantial investment of £750 million in the club, his disorganized approach led to a decrease in its value, falling to £470 million, as reported by "Football Benchmark." When Moshiri's negotiations with MPS Sports Capital fell through, Josh Wander and 777 Partners stepped in. Regarding the transaction, 777 Partners simply expressed their commitment to fortifying Everton's financial standing and ensuring the financing of the new "Bramley-Moore Dock" stadium in Liverpool.
Despite Everton's recent slump and relegation concerns following a home defeat to Arsenal London, Josh Wander remains undaunted. He firmly believes in the long-term potential stemming from the commercialization of sports. Recently, he heralded an era of "hyper-commercialization" in sports — a vision that is likely to prove accurate. The trend is fueled by the influx of substantial funds from Saudi Arabia, Qatar, and the UAE, leading to exorbitant player transfers and a continuously accelerating sports industry.
The vision for this football group is to not only sell fans hot dogs and beer but also insurance and other financial services.
Furthermore, investors such as 777 Partners consider it their responsibility to support clubs in their commercial endeavors. According to Wander, the Premier League has excelled in this aspect. His core belief is that "the overarching goal for this football consortium is to not just offer fans hot dogs and beer, but also to provide insurance and various financial services", as expressed by Wander in an interview with the Financial Times. He posits that the depth of the fan-club relationship implies a desire for monetization.
But what if they only want football-related services? The practical implementation of this theory still has some gaps, and the true potential is hard to quantify. Perhaps that's why Wander is also investing in adjacent sectors like ticketing and merchandising, as top stars often generate revenue through jersey sales.
Keeping Hertha afloat
That he possesses patience as an investor can be demonstrated by Josh Wander's commitment to Hertha BSC. Following the wreckage of Windhorst's involvement, the club was relegated to the Second Bundesliga, and continues to linger at the lower end of the table. Contractually, 777 Partners has committed to a total investment of €100 million – and only due to the prompt disbursement of the first two tranches, Hertha was able to receive a license. As reported by 'Kicker', 777 Partners will pay a total of €120 million in staggered payments to Tennor Holding for the acquisition of its KG shares (64.7%). Furthermore, Hertha plans to build a new stadium, which could strengthen future cash flows and aligns with 777 Partners' goals. However, the time frame for achieveing a return on investment is prolonged.
The man often seen in a cap-to-suit ensemble, blending both a touch of grassroots and professionalism, must adeptly navigate all these ventures. During the introduction of the Hertha involvement in the spring, he exuded a relaxed yet professional demeanor, a quintessential American investor. However, along with the increasing success of larger club investments, a story from his past resurfaced: In 2003, Josh Wander received probation for his involvement in cocaine trafficking, which he characterized as a "foolish college incident".
This history doesn't seem to harm his access to investors. 777 Partners is in the process of bolstering the holding with several hundred million euros in equity and debt capital. The industry-experienced boutique Tifosy Capital is overseeing the transaction. According to Wander, the holding, which is also active in aviation, has nearly $10 billion in assets under management and a balance sheet of almost $4 billion in the insurance business. Thus far, the 42-year-old claims that only $250 million in capital has been raised.
There were attempts to negotiate with the Saudi sovereign wealth fund, but as stated by Wander, they didn't yield any results. Nonetheless, their football portfolio is already quite impressive, including their initial investment in FC Sevilla (Spain) in 2018, along with CFC Genoa (Italy), Vasco da Gama (Brazil), Standard Liege (Belgium), the French third-division club Red Star FC Paris, Melbourne Victory (Australia), as well as Hertha BSC and FC Everton. Their strategy aims to leverage synergies, like player transfers, effectively turning some of these clubs into feeder teams for larger clubs. This arrangement has faced increasing scrutiny from football governing bodies. Additionally, there's mounting pressure to comply with Financial Fair Play regulations, although it hasn't had significant consequences for the owners so far.
Better positioned than Todd Boehly
Josh Wander, alongside Todd Boehly (Chelsea) and David Blitzer, who is involved with FC Augsburg, represents the growing cohort of US investors increasingly entering the world of football. While Boehly appears more impulsive with his transfer activities, Wander gives the impression of a more structured approach. Although not every bet is guaranteed to succeed, there is reason to be optimistic that Wander will lead his portfolio to success. The influx of oil wealth into the market is likely to have a net positive impact on 777 Partners.