Leagues can borrow for smaller clubs

It’s hard to imagine CVC Capital Partners, the Luxembourg-based private equity firm, lending to any individual club in the Spanish second-division. But Javier Tebas, president of Spain’s La Liga, negotiated a deal this month that will see roughly €2bn from CVC redistributed to clubs across the top two tiers in the form of interest-free loans in exchange for a slice of La Liga’s TV money.

In recent months European football leagues have shown that they can borrow on behalf of clubs to obtain finance that smaller teams would struggle to obtain from mainstream lenders.

The investment management arm of US insurer MetLife was willing to provide a £117.5m borrowing facility to the English Football League, which runs the Championship and two other divisions below the elite Premier League, allowing clubs to meet certain tax liabilities.

 “As a collective, the security within football is a lot stronger than it is on an individual case by case business,” said Ian Clayden, a partner at consultancy BDO. “It is what a number of clubs are telling us, they would welcome the opportunity to access some sort of growth or development fund.”

But some club executives and advisers are cautious. They say deeper reforms are needed to change the behaviour — overspending on players to win games — that left clubs ill-prepared for the coronavirus cash crunch.