Private Credit's Next Frontier: 'Squad-Value Financing' for English Football Clubs

Private Credit's Next Frontier: 'Squad-Value Financing' for English Football Clubs

Private credit is pushing into collateral banks won't touch — the transfer value of footballers. The FT (Alexandra Heal, Josh Noble, Euan Healy): "Private credit funds are targeting football's biggest transfer market with a push to extend loans to English clubs based on the value of their players, as increasingly exotic financing filters into the sport." The structure is novel even by private credit standards: "The novel loans are sized according to the value of a club's playing squad and sometimes involve the lender only taking security over hypothetical receivables from potential player sales.¹"

Tifosy and private capital manager Fasanara "have pioneered squad-value financing in Europe, extending loans equivalent to about a quarter of the value of clubs' playing squads." Fasanara CEO Francesco Filia: "Football clubs need capital on a timetable that does not always match when revenues arrive. Our sports receivables and squad-backed financing strategy aims to bridge that gap." London-based sports finance firm 23 Capital, wound down during the pandemic, "has relaunched with squad-value loans as a core part of its offering." Clubs in Spain, Portugal, Italy, France and Belgium have already borrowed this way; second-tier Burnley (owned by ALK Capital) is notable among English clubs.

The market context: "Globally, football clubs spent a record €10.8bn on player transfers this summer, according to sports advisory firm Tifosy, with Premier League clubs accounting for 38 per cent of that spending," and six of the top 10 clubs by squad value are English (Transfermarkt). The push comes as the game's independent regulator warned that widening losses and rising debts were putting English football "on the edge of financial disaster."

What it means: This is the expansion-of-collateral frontier in its purest form — lending against "hypothetical receivables" from player sales that haven't happened, sized off squad valuations that are themselves model-based estimates. It extends private credit's migration from corporate direct lending into specialized asset-backed niches (see also Benefit Street's $480M Encina asset-backed liftout this week), and it imports the sector's defining vulnerability — mark-to-model collateral — into a new asset class with no observable market prices. One football executive's expected use case is tellingly cyclical: borrow in the January window to buy a player, repay from summer-window sales. That is bridge-lending logic applied to an asset whose value can gap 50% on relegation.