When Elliott Management acquired AC Milan in 2018 they did so reluctantly.

A hedge fund management company based in New York, with no previous experience of running a football club, did not want to be owners of one of the most storied football clubs in the world, but it did so as it was the best course of action to take to protect its investment.

Paul Singer’s Elliott firm had provided the financing for the purchase of the club by the former owner, Chinese businessman Li Yonghong, who had succeeded Silvio Berlusconi as owner in 2016. Elliott provided €300m of loans.

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But in 2018, Li Yonhong defaulted on a €32m loan repayment due to Elliott Management, with the Wall Street firm, as part of its security on that debt, opting to acquire AC Milan as an asset.

Fast forward to late 2022 and AC Milan won their first Scudetto in 11 years, and Elliott sold the club to another American firm, New York-based RedBird Capital Partners, in a deal worth some €1.2bn, marking a significant return on the investment that Elliott initially made into the football club.

While the situation is not exactly the same at Everton, it has plenty of parallels.

This time it’s another New York investment firm (there are quite a few of them) who are the focus, with MSP Sports Capital having loaned Everton £158m last year to enable the club to forge ahead with the building of the new stadium at Bramley-Moore Dock, a development that will be a key, revenue-generating asset for the club for decades to come.

The initial plan had been for a 25% convertible debt deal, one that would see MSP provide a level of operational control by having some seats at board level. But, unhappy with the nature of the deal, the size of equity being given away for the price, and the potential for a dilution of its own security, another Everton lender, Rights and Media Funding Limited, opted to oppose the deal in its original form.

What followed was a straight financing deal, but one where the collateral for MSP was held on Blue Heaven Holdings, the company which Farhad Moshiri owns Everton through. In the event of a default on that loan repayment, which had a maturity date of April 15, MSP had the option to exercise its right to acquire a controlling stake in Everton.

But with 777 Partners having been the owners-in-waiting, anointed by Moshiri when the two parties shook on a deal for his 94.1% shareholding back in September of 2023, the growing concerns over the Miami-based firm’s credentials and financial muscle led to one of the Premier League’s conditions of approval for 777 being the repayment of the MSP loan in full.

MSP, reluctantly, allowed 777 some more time, ‘weeks not months’, to get its house in order and find the necessary capital to complete. But with more legal issues coming out of the woodwork, airlines they own in administration, claims of fraud, and access to key lines of capital being turned off, the chances of 777 now acquiring the club look very remote.

777 have provided some £200m in financing to Everton for working capital in recent months, with that coming through unsecured junior debt, placing them very last in the queue behind other major creditors such as MSP, Rights and Media Funding Limited, and Metro Bank.

With the lack of options apparent for Moshiri, and with 777 looking unlikely to complete, MSP are considering whether or not to take on the ownership of the club. If they do, like Elliott Management, they would likely be reluctant owners.

But Everton needs a clean up. It has been a football club that has lurched from one crisis to the next, almost on a weekly basis, and where any positivity over a new stadium that fans had has often been harpooned by the misery that surrounds the continued drama off the pitch.

Loading clubs with more debt, which was the 777 plan, when the business is cash flow negative is never usually a recipe for success. Businesses have to satisfy debt, and negative cash flow does not make that easy, nor is it a model that lends itself to growth prospects.

It needs a cold approach to allow for a reset. MSP may feel, given their footballing interests that exist through minority stakes in other European clubs, as well as their part-ownership of the McLaren Formula One team, that they have an idea about straightening out sports businesses.

If they do choose to exercise an option to take over Everton, or pay more to acquire all of Moshiri’s shareholding, then they likely aren’t the answer for the long-term. But they may provide Everton with what they need in the short to medium term, cleaning up the balance sheet, reducing liabilities and polishing the club up to be a compelling asset for purchase by someone who could take the club on, in a new stadium with huge potential, in 18 months or so.

It isn’t without precedent, and while for football fans this is an emotional part of their lives with deep meaning, for those who ultimately own the clubs it is most often a cold business decision. That might be what Everton need to start the recovery, someone able to clean up the mess that has been created and provide a springboard for growth.

If it isn’t to be MSP who take on that responsibility, whoever picks up the baton will need to take the same approach before any progress in the right direction, that is meaningful and long-lasting, can be made.