It will evidently take more than Coach Lasso to prop up the Premier League, as the group of English football’s twenty top clubs are reportedly seeking more than £1bn of financing.
As the league made showbiz headlines with its £500,000 licensing deal with Apple on Monday - giving Apple TV hit Ted Lasso the rights to use archive footage, logos, club kits and trophy – bigger business was afoot with club executives reportedly working on a centralised finance facility.
A centralised fund would seek to secure at least £1bn and up to £1.5bn in credit lines or debt financing, according to a report in the Financial Times.
It could replace some of the club-by-club borrowing, through so-called ‘factoring’ deals with private lenders. Such deals, not very much unlike payday loans, see clubs borrow against their future League payments under broadcast deals in order short term expenses (transfers, agents fees or wages for example) and smooth out cash flow.
These financing deals have been provided by the likes of Macquarie Bank and Close Brothers in recent years, the FT said, and the financial paper cited one club owner who had been offered interest rates starting at 7% for such a deal (typically, the big clubs see much lower rates than those battling against relegation at the foot of the league table).
Instead, some football executives now want the centralised source of funds, at much lower rates, as they believe the Premier League would be deemed ‘investment grade’ by debt financiers.
The biggest clubs including Manchester United and Liverpool already have access to their own lower-cost borrowing, via revolving credit, and the new initiative would mostly benefit the league’s smaller clubs, the FT noted.
It comes after Premier League clubs lost an estimated £2bn due to the pandemic which saw practically a whole season played without fans at stadiums.