Author: Paul Quinn

The Premier League and US Private Credit Influence

The financing landscape of the English Premier League (EPL) has undergone a profound transformation, moving rapidly from traditional banking relationships and high-net-worth individual ownership to complex structures dominated by global alternative asset managers, primarily based in the United States. 

US private capital—encompassing private equity (PE), venture capital (VC), and private debt is no longer peripheral, but systemically embedded within the game. Currently, US investors are responsible for approximately 40% of multi-club ownership (MCO) structures across Europe’s Big Five leagues, and US private capital backs over one-third of clubs in these top divisions, with the EPL exhibiting the highest density of participation.

The exposure of EPL clubs to the US private credit market is bifurcated, reflecting the differing credit quality and asset bases of the borrowers. Highly stable, top-tier clubs, distinguished by diverse and global revenue streams, utilise the US Private Placement market to secure low-cost, long-term debt, exemplorised by Tottenham Hotspur’s extraordinary stadium financing at rates as low as 2.66%. 

Conversely, mid-to-lower tier clubs and those requiring urgent working capital turn to direct US private credit funds for bespoke, high-yield senior loans, exemplified by Nottingham Forest’s facility from Apollo Global Management at a high 8.75% interest rate.

Owner exposure is inextricably linked to the financial instruments used for acquisition and expansion. Owners of clubs such as Manchester United (via the legacy leveraged buyout model) and Chelsea (BlueCo) have secured club value or financed new growth using debt/hybrid instruments heavily reliant on US institutional or credit capital, thereby transferring substantial, long-term financial obligations onto the club entity itself.

Future growth in private credit leverage will be constrained by the impending UK Football Governance Bill. This legislation introduces the Acquisition Leverage Test, which explicitly prohibits new fully leveraged buyouts, forcing future US private equity sponsors and credit providers to structure transactions with significantly more upfront equity, mitigating the high-leverage risk that has historically characterized certain US-led acquisitions.

 The overall influence of US private credit is therefore shifting from acquisition leverage to strategic asset financing and short-term liquidity provision, often at a high cost, serving as a necessary stabiliser in an environment defined by rapid revenue growth but pervasive structural unprofitability.

The European Football Funding Gap and Structural Unprofitability

The financial dynamism of European football presents a relatively unique investment paradox: record-breaking revenue generation alongside structural unprofitability. The overall European football market reached a record €38 billion in the 2023/24 season, with the ‘Big Five’ leagues surpassing €20 billion in combined revenue for the first time.

 This growth is spearheaded by the Premier League, where clubs generated £6.3 billion in revenue, with commercial income exceeding £2 billion.

However, these substantial income streams are consistently outpaced by funding needs driven by an intense arms race for on-pitch talent”. This leads to high cost inflation, primarily through escalating player wages and transfer fees, resulting in significant net losses. 

English clubs, despite leading in revenue, contributed 73% of the entire European net losses reported in 2023 (€1.2 billion net loss across Europe’s top division), necessitating constant capital infusion.

Traditional banking institutions have become increasingly cautious in providing extensive leveraged financing to football clubs, often due to strict internal guidelines, regulatory restrictions, and the inherent volatility associated with the sport, particularly the risk of relegation.

 This hesitation has created a significant funding gap. US alternative asset managers, including specialised private equity and credit funds, are uniquely positioned to fill this vacuum. These firms specialise in pricing bespoke risk and navigating complex, regulated industries, providing capital where traditional lenders decline, often at high interest rates. This suggests that the engagement of private credit is not merely an opportunistic pursuit of high returns but a systemic necessity for clubs to bridge the competitive spending gap, even if the resulting high-interest debt exacerbates the underlying financial fragility.

The ecosystem of US capital in football encompasses sophisticated, multi-faceted financing structures. Large US alternative asset managers such as Ares Management, Apollo Global Management, and Oaktree Capital (which recently took control of Inter Milan) are now prominent players across Europe.

It is essential to distinguish between the primary capital models. Private Equity (PE) involves taking an ownership stake, typically aiming for control or influence (e.g., Clearlake Capital’s acquisition of Chelsea, Silver Lake’s 10% stake in City Football Group). This equity investment is often supplemented by debt, usually through a leveraged buyout (LBO) structure.

 In contrast, Private Credit is defined as purely a loan structure, which may include instruments ranging from high-yield senior loans (Alternative Lending, often with 5 to 7 year maturities) to long-dated Public Bond and Private Placement debt (3 to 25 year maturities).

The spectrum of private credit instruments deployed is wide, reflecting the diverse needs of clubs:

• Alternative Lending/Direct Loans: These are term loans provided by credit funds to finance strategic ventures or acquisitions, such as Apollo’s financing for Nottingham Forest.
• Structured Private Capital: Hybrid debt and quasi-equity instruments, such as preferred shares or preferred equity, which offer debt-like repayment priority but can sometimes be structured to resemble equity for regulatory compliance purposes.
• Factoring: Selling transfer or broadcasting receivables to lenders to manage working capital needs, typically involving short maturities of less than three years.

The presence of highly sophisticated US financial sponsors suggests that their expertise in structured finance allows owners to optimise capital deployment and remain ostensibly compliant with UEFA and Premier League profitability and sustainability regulations (PSR). These firms are adept at structuring financing to maximise non-operational spending (e.g., infrastructure), which is often exempted from PSR loss calculations, illustrating a critical function of US private capital in regulatory arbitrage.

Density and Velocity of Deals in the Premier League

The Premier League remains the primary target for US investment due to its unparalleled global commercial reach and revenue streams. The EPL exhibits the highest concentration of US investor participation and multi-club ownership (MCO) activity among the ‘Big Five’ European leagues. The most active MCOs tend to be US investors, which now make up approximately 40% of Europe’s top leagues.

The MCO model, resembling a private equity buy-and-build strategy, is rapidly becoming the dominant organisational structure in elite European football, encompassing nearly 48% of the Big Five clubs by the 2025-2026 season. This expansion often requires external financing, frequently supplied by US private credit. For instance, the capital injection secured by Chelsea’s owner (BlueCo) from Ares Management was explicitly earmarked for expensive stadium improvements and the acquisition of stakes in more football clubs as part of their MCO strategy.

The scale of commitment by US private capital is substantial, indicating a deep structural shift in ownership models.

Key EPL Club Exposure to US Private Credit and Capital

Direct Club Exposure: Institutional Stadium and Infrastructure Financing

The US Private Placement (USPP) Model: Tottenham Hotspur Case Study

The US Private Placement (USPP) market has proven to be a cornerstone of infrastructure financing for the EPL elite, providing a model of long-term financial stability. Tottenham Hotspur provides the quintessential example, having refinanced a substantial portion of its new stadium debt through a bond issuance in the US private placement market.

The club raised $655 million by refinancing an initial $795 million construction loan. The USPP notes specifically totaled £525 million (approximately $659 million). This deal was facilitated by Bank of America Merrill Lynch (BAML) and HSBC and leveraged the club’s ability to secure a strong investment-grade credit rating. The ability of a sports entity to access this institutional debt market on such favorable terms is unique, allowing the club to monetize its predictable, globally-derived revenue streams including media rights and matchday income into long-term, fixed-asset financing.

The financial terms achieved were exceptionally advantageous, providing maturities extending up to 30 years, with the longest debt tranche having a bullet repayment in 2051. Furthermore, the weighted average coupon on the refinanced bonds was remarkably low at 2.66%. This fixed, low-cost debt is highly competitive with conventional corporate finance and is crucial for maintaining financial security, serving as a benchmark for how the highest-quality EPL assets can utilize private institutional debt (often insurance and pension funds) to manage long-term capital expenditure.

 Preferred Equity and Hybrid Financing: The Chelsea FC/Ares Management Facility

In contrast to the structured institutional bonds used for standard stadium debt, US private credit funds often employ complex, hybrid instruments to finance both infrastructure and strategic expansion. Chelsea FC, controlled by the US-led consortium including Clearlake Capital and Todd Boehly (BlueCo), secured a $500 million capital injection from Ares Management, a major US alternative asset manager.

The transaction was structured as a “preferred equity deal,” a financial instrument that blurs the lines between pure equity and debt. While labeled as equity, preferred instruments typically carry fixed, mandatory returns, often structured as Payment-in-Kind (PIK) interest, which accrues rather than being paid in cash. Market sources estimate the cost of this capital to be high, with an approximate PIK interest rate of 12%.

This financial engineering serves a strategic dual purpose. Firstly, the capital will fund expensive infrastructure projects at Stamford Bridge. Secondly, it supports the expansion of BlueCo’s Multi-Club Ownership (MCO) structure, which has included the acquisition of a stake in Strasbourg and links to other clubs like Sporting Lisbon. By utilising a preferred equity structure, the owners are able to inject capital for major, long-term projects and MCO expansion – key strategic goals – while potentially minimising the visible impact on conventional senior debt metrics and FFP/PSR operational leverage calculations. This sophisticated approach demonstrates how US private credit facilitates the maximisation of long-term asset value and MCO strategy under restrictive financial regulations.

The Role of Bank Lending vs. Private Credit for Operational Refinancing

While private credit has surged, traditional bank lending retains some presence, often secured against stable revenue streams. For instance, Wolverhampton Wanderers secured a £115 million bank loan from Macquarie Bank, explicitly collateralised against the club’s future Premier League television rights income.

However, banks have generally tightened guidelines and regulatory restrictions, limiting capital availability and acceptable leverage levels for sports franchises, thereby creating a funding gap that pushes many clubs toward bespoke private credit solutions. The private credit market is often leveraged to replace existing high-interest facilities. For example, some clubs, such as Everton, have sought to replace expensive high-interest loans (historically ranging from 11% to 12%) with more favorable long-term institutional debt to ease the burden of Profitability and Sustainability Rules (PSR) compliance, demonstrating a critical function of the alternative finance market in optimizing capital structure.

 The overall trend indicates that for infrastructure projects requiring long-term, low-rate stability, the USPP model is preferred, while for flexible, high-leverage operational or expansion capital, high-yield private credit funds are the primary recourse.

High-Yield and Specialist Private Credit: Working Capital and Receivables

 The Apollo/Nottingham Forest Loan: Terms, Collateral, and Risk Pricing

For clubs that lack the stable, investment-grade revenue base of the elite, US private credit provides necessary, albeit expensive, working capital and refinancing solutions. The £80 million, three-year loan secured by Nottingham Forest from US firm Apollo Global Management in December 2023 serves as a clear illustration of the pricing of football volatility.

The loan carried anl interest rate of 8.75%. This funding was specifically used to refinance a previous facility with Rights and Media Funding and to acquire additional working capital, crucial after the club’s promotion to the Premier League. The significant difference between this 8.75% rate and the 2.66% coupon achieved by Tottenham Hotspur precisely quantifies the risk premium that US private credit funds demand when lending to clubs exposed to major operational risks, notably relegation. It also reflects the timing of deals.

This high-cost debt is often a calculated risk, necessary to fund the player investment required to remain competitive and avoid relegation, which would trigger a massive collapse in broadcast revenue. In this context, private credit serves as a high-risk/high-reward lifeline, funding existential sporting risk in the pursuit of Premier League survival.

Player Transfer Receivables Factoring: Mechanics and Regulatory Constraints

A specialised and growing area of private credit exposure involves the factoring of future revenue streams, particularly player transfer fees and broadcasting rights. Factoring allows clubs to immediately unlock cash by selling their rights to future income.

 This approach is highly attractive in football because certain revenues, such as central broadcasting income and contracted transfer fee installments, are relatively predictable and constitute fixed receivables.

Private credit funds, including large US firms like Ares, and specialised managers like Fasanara Capital (which aims for a $500 million fund dedicated to sport receivables), are drawn to these transactions. Transfer fee installments are viewed as “hard collateral” because global regulators, specifically FIFA and UEFA, strictly enforce obligations between clubs, reducing the risk of counterparty default. In the EPL, the “football creditors” rule adds additional security, although my personal belief is that this increases the chances of a systemic collapse.

This high security, combined with the general absence of traditional bank financing for smaller teams that need to finance working capital between transfer windows, allows private credit funds to demand highly lucrative terms, often generating double-digit returns and relatively robust security packages. Structuring these deals requires careful navigation of regulatory rules, as the Premier League and EFL restrict the assignment of receivables to certain entities and FIFA prohibits third-party ownership of players’ economic rights. Nevertheless, focusing on reliable, contractual cash flows allows US private credit funds to gain exposure to the football market with lower inherent operational risk compared to highly leveraged acquisitions.

Quantifying Security: Leveraging Future Broadcasting Revenue

Lenders require strong collateral given the unpredictable nature of sporting success. One of the most critical assets used to secure private credit in the EPL is the right to future central distributions, primarily broadcasting revenue.

EPL and EFL rules provide clubs with flexibility to assign future entitlements to central funds as part of an all-assets security package, including to funders not classified as traditional Financial Institutions. However, it does require a regulated entity..

 This practice effectively grants private credit providers access to highly predictable, high-volume income streams. This mechanism is widely established, as seen in the £115 million bank loan provided to Wolverhampton Wanderers, which was explicitly secured against the club’s future Premier League television rights income. By securing loans against these central funds, which are paid out reliably regardless of match attendance or short-term sponsorship volatility, US lenders substantially mitigate their exposure to the operational and sporting failures of the club.

Owner and Financer Exposure: Structural and Legacy Leverage

 Detailed Analysis of the Manchester United LBO: Debt Structure and Institutional Holders

The highest profile and most contentious exposure of an EPL club to US finance is the legacy debt structure of Manchester United, stemming from the Glazer family’s 2005 Leveraged Buyout (LBO). The Glazers financed the acquisition by securing £600 million in loans against the club’s own assets.

A significant portion of the original debt was supplied by US financial institutions, including three American hedge funds: Citadel, Och-Ziff Capital Management, and Perry Capital, which provided £540 million, with £265 million to £275 million secured directly against Manchester United’s assets. This strategy meant that the club entity was forced to shoulder the financial burden of its own takeover, incurring annual interest payments of approximately £60 million.

In the LBO model, the financial exposure rests heavily on the club’s cash flows, creating an asymmetry where the owner is insulated and primarily focuses on value extraction (through dividends and eventual sale profits). While the debt has been repeatedly restructured and refinanced through global bond issuances, institutional debt holders, including private credit and hedge funds, remain exposed to the long-term solvency of the club. However, the club’s diversified global revenue streams, which allow it to service the debt while remaining compliant with PSR, have, to date, mitigated the operational risk for these financers. As of June 2025, Manchester United’s total debt stood at a substantial $0.88 Billion USD. This debt structure is the defining example of US leveraged finance in English football and served as the primary catalyst for impending regulatory reform.

Impact of Financial Fair Play (FFP) and PSR on Capital Mix and Debt Utilisation

The framework of Financial Fair Play (FFP) and the Premier League’s Profitability and Sustainability Rules (PSR) significantly influence how owners and credit providers structure financing.3 PSR restricts operational losses over a three-year period, forcing clubs to strategically utilise debt for exempt expenditures.

The exclusion of infrastructure capital expenditure from PSR loss calculations provides a critical incentive for clubs to finance new stadiums or training facilities using non-shareholder debt, often through USPP or high-value private credit. This deliberate strategy allows clubs to leverage significant external capital for long-term growth while maintaining an appearance of regulatory compliance in operational spending.

Furthermore, the prevalence of owner-creditor hybrid models is common, particularly for US-owned clubs. For example, Arsenal’s debt to Kroenke Sports & Entertainment (KSE) stood at £324.1 million. While KSE’s loans provide financial stability without resorting to expensive third-party debt, this structure still represents significant leverage. A key mechanism used to manage PSR compliance when facing financial strain is the conversion of shareholder loans into equity. This improves the club’s balance sheet by eliminating debt liability. 

Examples include Fosun International (Wolves) converting £79 million of loans into equity, and the refinancing of Everton’s debt, where loans, including those from former owner Moshiri, are converted to equity as part of a restructuring to ensure PSR compliance. This dynamic interaction between shareholder debt, external private credit, and regulatory compliance is central to modern EPL financial strategy.

Financial Mechanisms Employed by EPL Clubs and Associated Private Credit Risks

Risk Architecture and Credit Protection for US Lenders

Maintenance Covenants and EBITDA Metrics in Football Finance

Private credit lenders, particularly US funds, structure highly bespoke agreements to protect their capital in the volatile sports market. Unlike the often cov-lite nature of broadly syndicated loans (BSL), private credit deals generally require the inclusion of financial maintenance covenants.

These covenants are crucial for measuring a borrower’s earnings capacity and safeguarding against deterioration in financial health. Typical covenants utilised in football financing include cash flow covenants, often measuring the club’s debt relative to its operational metrics, such as EBITDA. Specific clauses, such as the total debt to total capital ratio or net worth covenants, are also employed.

A major challenge for lenders in this sector is the volatile nature of revenue tied to sporting performance. Lenders must exercise extreme vigilance regarding provisions that allow borrowers flexibility, such as high-water mark provisions. These clauses lock in fixed dollar debt baskets based on peak EBITDA achieved at any point during the loan term, potentially disregarding subsequent declines in club performance and revenue, thereby exposing lenders to unexpected risk if the club’s operating earnings deteriorate.

To mitigate default risk, loan agreements generally include “cure rights,” allowing shareholders to inject fresh equity to remedy a covenant breach, maintaining the club’s liquidity and protecting the lender’s position.

 Contractual Adjustments and Security Enhancement

Relegation is arguably the most significant non-financial risk in European football, deemed a defining credit factor that can materially affect cash flows and refinancing capacity due to the enormous drop in broadcasting revenue. Private credit funds must explicitly price this volatility into their agreements.

Loan agreements universally include explicit provisions that trigger adjustments upon a change in league status. These contractual mitigants serve to immediately de-risk the lender’s exposure:

1. Increased Interest Rates: The coupon rate automatically increases to compensate for the sudden loss of high-value Premier League broadcasting income.
2. Accelerated Repayment: The club may be required to make partial, accelerated principal repayments to reduce the outstanding exposure, often based on a pre-agreed schedule derived from reduced Championship revenues.
3. Enhanced Collateral: Lenders may demand that previously unencumbered assets be charged, providing additional security to offset the diminished quality of the underlying revenue streams.

 The Priority Status of “Football Creditors”

A unique regulatory complexity facing US private credit lenders is the enforcement of the Football Creditor Rule. This rule, maintained by the EPL and EFL, mandates that football-related debts, specifically, payments owed to other clubs (transfer fees), players (wages), and certain football-related service providers, must be repaid in full in the event of insolvency or non-payment, potentially taking priority over secured commercial lenders.

The FCR introduces considerable complexity for structuring security packages, particularly as US private credit funds often view transfer receivables and broadcasting rights as reliable collateral.

 While FCR ensures the stability of the football ecosystem, it can subordinate the security interests of external commercial lenders. Consequently, private credit providers must structure their loans to ensure their security packages focus on tangible assets (stadiums and training grounds) or explicitly assign non-football specific revenues where their priority is unambiguous. However, reliance on tangible assets as collateral is often viewed cautiously, as the market value of a stadium is inextricably linked to its use as a football venue, and enforcing a charge against it carries high reputational risk.

The Independent Football Regulator (IFR) and the Prohibition of LBOs

The UK government’s introduction of the Football Governance Bill and the establishment of an Independent Football Regulator (IFR) represent the most significant headwind to historical US private credit practices in the EPL. The IFR’s core mandate is to enhance the financial resilience and long-term sustainability of the English football pyramid, a direct response to historical club failures and the financially extractive nature of certain ownership models.

The Bill introduces significant changes to ownership vetting, including the crucial Acquisition Leverage Test. This test is a direct legislative measure aimed at prohibiting fully leveraged buyouts (LBOs) of football clubs -the financial model pioneered by the Glazer family at Manchester United, which used club assets as collateral for the purchase debt.

This regulatory shift is expected to fundamentally alter how US private equity and credit funds structure future acquisition financing. The prohibition on high-leverage debt secured against the target company will necessarily force PE sponsors to commit significantly more equity upfront in any control transaction. This structural change is expected to compress the returns traditionally derived from high leverage ratios (MOIC), shifting the focus from debt-heavy acquisition finance to minority equity or highly secured, asset-backed lending.

The Bank of England’s Stance on Leveraged Lending in Non-Traditional Assets

While EPL debt generally does not pose a systemic risk to the broader UK financial system, the Bank of England (BoE) maintains a focus on the risks associated with global leveraged lending, monitoring the maturity profile and noting the increasing activity and compressed spreads in this market.

The BoE has previously drawn parallels between rising high-risk lending and the conditions preceding the 2008 financial crisis. The underlying concern relates to the potential for financial stress to be amplified if leveraged structures are rapidly unwound during periods of market instability, forcing a rush to sell assets. Since private credit deals in football are bespoke, high-yield, and often high-leverage, they fall under this general surveillance. The risks associated with relegation, which could trigger accelerated repayment clauses and sudden asset devaluation, are precisely the kind of financial shocks that concern regulators monitoring concentrated leveraged markets.

Conclusion

The degree of English Premier League financing exposed to the US private credit market is substantial and growing, primarily channeled through two distinct mechanisms: long-term, low-rate US Private Placements for infrastructure (elite clubs) and high-yield, specialized direct loans for operational liquidity and risk coverage (volatile clubs). The exposure of club owners and financers is characterised by high leverage at the holding company level (legacy LBOs) or complex hybrid debt structures (preferred equity) designed to maximize capital injection under PSR constraints.

In response to the evolving financial and regulatory environment, the following strategic conclusions and recommendations emerge:

Shift from Acquisition Leverage to Asset-Backed Finance: The impending IFR Acquisition Leverage Test mandates a departure from the extractive LBO model. Future US private credit deployment must prioritise segregated, high-quality, asset-backed deals. The IFR, by policing debt/equity ratios during acquisitions, effectively serves as a governance filter, and successful IFR approval will act as a non-contractual credit enhancement for lenders, signaling the club has met stringent solvency thresholds.

Focus on Predictable Revenue Securitisation: Private credit should emphasise financing that collateralises predictable income streams, specifically centrally managed media rights and transfer receivables, utilizing the robust enforcement mechanisms provided by FIFA and the EPL.

Mandatory Risk Pricing for Volatility: For non-elite clubs, lending terms must continue to explicitly quantify and price the systemic volatility of the league via high interest rates (e.g., above 8%) and rigorously enforced contractual provisions that trigger upon relegation (e.g., accelerated repayment and collateral enhancement).

Strategic Use of Hybrid Instruments: Continue utilising bespoke hybrid financial products (like preferred equity) that offer debt-like returns with equity-like regulatory flexibility, ensuring that the financial structure minimises adverse reporting under Premier League Profitability and Sustainability Rules.

Navigating the Football Creditor Rule (FCR): When structuring security, lenders must ensure their charges are secured against non-football-specific revenue streams or tangible assets where their priority is unambiguous, acknowledging the FCR’s potential to subordinate commercial claims in the event of severe financial distress.

To conclude, US private credit is transforming English football by providing essential capital where traditional sources are constrained. However, this access comes at a high cost and introduces heightened financial complexity, necessitating a sophisticated and highly technical approach to risk management and regulatory compliance by both the financers and the club ownership structures.

In addition to all of the above, a wider study of the US private credit market is a worthy exercise. It is a market not without growing problems and in a worse case scenario may have unintended consequences for English football.

The full report can be downloaded here: The Looming Difficulties in US Private Credit by Paul Quinn or accessed directly here