A Guide To Financing Football Clubs: Part 1 – Debt Finance
Finance is a key aspect of football today. Increased professionalism, competition and regulatory requirements have encouraged clubs and leagues to source finance to survive and thrive. However, the pandemic has squeezed already tight balance sheets and forced clubs to find increasingly complex methods to protect their financial health.
This article series explores investment and finance in football. It is split into three parts, which will examine in turn: (1) debt finance, (2) equity finance and ownership models, and (3) future trends in football finance.
Part 1, below, begins with a brief discussion on why clubs raise finance and who the investors are, to frame the substantive parts. It then examines debt finance through:
Working Capital Facility - For example, Southampton’s long-term corporate finance with MSD Holdings, secured by a debenture over the business;
Receivables - For example AFC Bournemouth using the £12,000,000 instalments due from Aston Villa in relation to the transfer of Tyrone Mings, as security for a term loan from Macquarie.
Part 2 – Equity finance and Ownership Models, is available here.
Part 3 - Future trends in financing of football clubs, is available here.
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- Tags: Articles | Commercial Law | Corporate Law | Covid-19 | Debentures | FIFA Regulation on Status and Transfer of Players | Finance | Football | Insolvency Act 1986 | Mergers and Acquisitions | Premier League | Regulation & Governance | Russia | Sports | Takeovers | UK Business Contract Terms (Assignment of Receivables) Regulations 2018 | United Kingdom (UK)
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Michael is a Solicitor in the Asset Finance practice at Watson, Farley & Williams LLP. He specializes in advising clients in relation to sports finance including: loan finance, financing of broadcasting and ticket revenues and the player transfer finance.
Stuart is an associate in the Assets & Structured Finance group, based in Dubai. Stuart predominately advises investment banks on complex cross-border asset finance transactions in the aviation sector, and also practises sports finance and general corporate banking.
Since starting with Watson Farley & Williams as a trainee in 2016, Stuart has worked in London, Hamburg and Dubai.