Key Takeaways
- • Private credit funds are exploring loans to English football clubs secured against the value of their playing squads, according to a Financial Times report.
- • Loans in these squad-value structures have typically represented around a quarter of a club's squad value, per the report.
- • Proposed structures would give lenders security over receivables from potential future player sales, while lenders could not force a sale but would hold priority over a portion of proceeds if a transfer occurs.
- • London-based sports finance firm 23 Capital, wound down during the Covid-19 pandemic, has reportedly relaunched with squad-value lending as a core offering.
- • Clubs in Spain, Portugal, Italy, France and Belgium have already used squad-value financing, while Burnley, owned by US firm ALK Capital, is reportedly among the few English clubs to have used such loans.
Summary
Private credit funds are exploring lending to English football clubs using the value of their playing squads as a basis for loans, according to a Financial Times report. The report says discussions over so-called "squad-value financing" are increasing among clubs and lenders, based on accounts from specialist football advisers.
The proposed structures differ from established football finance, which is typically backed by payments already owed for completed player transfers. Under the structures described, some lenders would take security over receivables from potential future player sales. Lenders could not compel a sale, but would have priority over a portion of the proceeds if a transfer took place. Loans have typically represented around a quarter of a club's squad value, according to the report.
The market is not new on the Continent. Tifosy and private capital manager Fasanara have developed similar arrangements across Europe in recent years, and clubs in Spain, Portugal, Italy, France and Belgium have already used squad-value financing. In England, adoption appears limited. Burnley, owned by US investment firm ALK Capital, is reportedly among the few English clubs to have used loans sized partly against player valuations, though those facilities are also secured against a broader asset pool.
According to people familiar with the matter, London-based sports finance firm 23 Capital has relaunched with squad-value lending as a core offering. The firm had been wound down during the Covid-19 pandemic. For institutional lenders, the development signals a widening of private credit into asset-backed football finance, a segment where security is tied to player contract values and transfer receivables rather than solely to club revenues.
The proposed structures differ from established football finance, which is typically backed by payments already owed for completed player transfers. Under the structures described, some lenders would take security over receivables from potential future player sales. Lenders could not compel a sale, but would have priority over a portion of the proceeds if a transfer took place. Loans have typically represented around a quarter of a club's squad value, according to the report.
The market is not new on the Continent. Tifosy and private capital manager Fasanara have developed similar arrangements across Europe in recent years, and clubs in Spain, Portugal, Italy, France and Belgium have already used squad-value financing. In England, adoption appears limited. Burnley, owned by US investment firm ALK Capital, is reportedly among the few English clubs to have used loans sized partly against player valuations, though those facilities are also secured against a broader asset pool.
According to people familiar with the matter, London-based sports finance firm 23 Capital has relaunched with squad-value lending as a core offering. The firm had been wound down during the Covid-19 pandemic. For institutional lenders, the development signals a widening of private credit into asset-backed football finance, a segment where security is tied to player contract values and transfer receivables rather than solely to club revenues.
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