TheChek News Flow

Lenders plan to take security over receivables from future player sales in novel ‘squad-value financing’ deals

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.

Discussions over so-called squad-value financing are picking up among English clubs and their lenders, according to several specialist football advisers. 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, the people said.

London-based sports finance firm 23 Capital, which was wound down during the Covid-19 pandemic, has relaunched with squad-value loans as a core part of its offering, according to people familiar with matter.

“We’re definitely seeing more [interest],” said one leading football finance adviser. “People are getting their heads round it.”

Club takeovers by private capital firms and US investors have opened the door for lenders to pitch more complex financing options, which already routinely include borrowing against receivables due from players who have been sold.

Clubs in Spain, Portugal, Italy, France and Belgium have already borrowed money via squad-value loans, one of the people said. Along with their stadiums, players are typically a football club’s main asset.

The growing financialisation of football comes as the game’s independent regulator warned this week that widening losses and rising debts were putting English football “on the edge of financial disaster”.

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.

Six of the top 10 clubs by squad value are English, according to estimates from Transfermarkt. English clubs outside the top flight spent €453mn this summer, up from €310mn year earlier.

While the exact structure of squad value loans is still being worked out, people close to the talks said that a lender with security over hypothetical receivables would not be able to force a club to sell a player. But at the point the club does sell a player, the lender would have first call over some of the future receivables, two of the people said.

Lenders are comfortable with their position because they believe clubs will be forced to sell players if they run into financial difficulty, the people added.

Tifosy and private capital manager Fasanara have pioneered squad-value financing in Europe over the past few years, extending loans equivalent to about a quarter of the value of clubs’ playing squads, said two of the people.

“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,” said Fasanara chief executive officer Francesco Filia.

One football executive said a club would be more likely to take out such a loan to finance a player acquisition during the January transfer window and then pay it off using funds received from sales in the summer window.

Second-tier side Burnley, owned by American investment firm ALK Capital, is one of the only English clubs to have used structures in which loan sizes are partially determined by player values. The loans are also backed by a broader pool of assets, according to people familiar with the matter.

23 Capital declined to comment.

Irenic Capital takes 4% stake in FTSE 250 real estate group and joins Ancora in lobbying for a sale

An activist hedge fund run by an Elliott Management alumnus has taken a significant stake in Big Yellow Group, heaping more pressure on the UK self-storage company to put itself up for sale.

Irenic Capital Management, which has built a roughly 4 per cent holding in Big Yellow, has been engaging with the London-listed group’s board of directors for months, arguing that its shares are undervalued and it should explore a sale, according to people familiar with the matter.

Irenic’s emergence on Big Yellow’s shareholder register comes in the same week that fellow activist investor Ancora Holdings disclosed a 4 per cent stake in the self-storage group.

Shares in the FTSE 250 company have fallen by 25 per cent over the past year amid a sluggish UK property market. The stock jumped 5 per cent on Wednesday after Ancora went public with its stake, giving it a market value of £1.65bn. The activists are now among Big Yellow’s largest shareholders.

Big Yellow received takeover interest in October last year from private capital group Blackstone but the talks eventually collapsed. The company could draw interest from private equity groups as well as strategic buyers in a formal sale process, the people said.

Ancora, which is best known for campaigns at US rail operator Norfolk Southern and US Steel, also called for Big Yellow to explore strategic options including a sale at an investor conference on Tuesday.

In response to Ancora’s demands, Big Yellow reaffirmed in a statement on Thursday that last year’s takeover offer “was not at a level that reflected the full potential of the company”. But the company added that it “continually evaluates all options for maximising shareholder value”.

A wave of consolidation has swept over the UK’s listed real estate market. Warehouse and data centre owner Segro is being acquired by larger US rival Prologis in a £14bn deal, while NHS landlord Assura is combining with rival Primary Health Properties in a £1.8bn deal.

Big Yellow did not immediately respond to a request for comment about Irenic’s stake. Irenic declined to comment.

Since being founded by former Elliott investor Adam Katz and Indaba Capital portfolio manager Andy Dodge in 2021, Irenic has been making a name for itself as one of the most successful nascent activists. It had $2.5bn of assets under management as of the start of this year.

Irenic has been active in the UK, previously successfully pushing for the £506mn sale of Wagamama owner The Restaurant Group to Apollo. It is also currently invested in Upper Crust owner SSP Group, which it has touted for sale to private equity groups, and in UK aerospace manufacturer Melrose Industries.

UK companies across sectors have been targeted in recent years by international buyers, attracted by relatively cheap valuations.

Big Yellow’s shares are trading near a six-year low, despite posting solid annual results earlier this year — with net asset value, an important metric for real estate landlords, rising by 1 per cent to £13.70 a share.

Zohran Mamdani, New York City’s mayor, set off a firestorm of criticism Wednesday morning with a social media post ostensibly intended to commemorate the Oct. 7, 2023, massacre of Israelis. It devoted a brief paragraph to condemning Hamas and commiserating with its victims. The rest was a much longer denunciation of Israel’s “ongoing genocide in Gaza,” a “world in which occupation and apartheid continue” and a situation in which “our federal government continues its complicity with every arms shipment.”

In response, Ammiel Hirsch, the president of the New York Board of Rabbis, said the statement was “so offensive to so many Jews that it is hard to describe how offensive it is.” In fact, it’s a moral obscenity. Let me count the ways.

It is obscene in the same way it would have been obscene if the mayor had commemorated the 25th anniversary of Sept. 11 last month with a perfunctory nod to the victims of the day, followed by a much longer denunciation of U.S. foreign policy in the Middle East. What happened on both Sept. 11 and Oct. 7 was undiluted evil, each an unprovoked visit of deliberate and maximalist violence on people who had done nothing to invite that violence other than being at the wrong place at the wrong time.

It is obscene because many of the Jews murdered on Oct. 7, living in kibbutzim with conspicuously left-leaning politics, had been at the forefront of the peace movement, volunteering, for example, to drive sick Palestinians for treatment at nearby Israeli hospitals. Hamas wasn’t just killing and terrorizing the innocent; it was eliminating the good.

It is obscene because Hamas didn’t just kill its victims in pursuit of a strategic objective. It tormented and slaughtered them like an army of serial killers who delight in the suffering of their victims. Corpses of Israeli women were described by one coroner as “shot in the crotch, intimate parts, vagina, or were shot in the breast.” Others appeared to have been raped so violently that their pelvises were broken. Parents were killed in front of their children; children were murdered in their beds. A fieldworker was beheaded with a garden hoe. I know this because Hamas filmed itself doing this and I forced myself to watch the film. I know because that same month, I visited the bedrooms where the kids had been murdered, their mattresses still soaked in blood.

Sign up for the Opinion Today newsletter Get expert analysis of the news and a guide to the big ideas shaping the world every weekday morning. Get it sent to your inbox.

It is obscene because, whatever else you may think of the war in Gaza, on the eve of Oct. 7 the border of Israel and Gaza was governed by a cease-fire. It was Hamas that chose to kick off the violence, just as the Japanese did in 1941 with the attack on Pearl Harbor. Whether in fistfights between people or wars between states, whoever throws the first punch forfeits the right to throw the last.

It is obscene because Mamdani is being misleading when he speaks as if his prime objection to Israel is what it did after Oct. 7. In fact, the mayor has been an anti-Israel zealot at least since his college days, when, as a leader of Students for Justice in Palestine, he broke off collaboration with the left-leaning Jewish group J Street, which advocates a Palestinian state, because it also recognizes the rights of a Jewish state. He’s written a rap professing “love” for five men convicted in a U.S. court of funneling money to Hamas. The day after Oct. 7, he issued a brief statement that said nothing about Hamas but immediately denounced Israel. Put simply, this is a mayor who first condemned Israel as guilty and then went about collecting evidence.

It is obscene because, however much the genocide allegation against Israel is mindlessly repeated by people too lazy or prejudiced to understand the difference between war and genocide, that allegation is as false as it is sinister. False, because genocide is about killing whole classes of people for who they are rather than for what they did — and if Israel wanted to kill Palestinians as Palestinians it never would have bothered mobilizing hundreds of thousands of its own soldiers for the war, and losing hundreds in high-intensity urban warfare. Sinister, because the political purpose of the genocide allegation is to trivialize, if not erase, the attacks of Oct. 7 by making them seem minor in comparison to the Palestinian casualties that tragically, but all but inevitably, followed.

It is obscene because Hamas’s intentions toward Israel really are genocidal. Its leaders have often and publicly vowed to perpetrate future Oct. 7s. Had the group not been stopped by force that day, there’s no reason to think it wouldn’t have kept up its orgy of slaughter on its way to Tel Aviv and other Israeli cities. Yet one searches in vain for anything from the mayor except perfunctory, pro forma condemnations of Hamas.

It is obscene because there’s an even more wretched purpose to the genocide charge against Israel, which long predates the recent war in Gaza. It is a specimen of Holocaust erasure: not the dumb kind, which seeks to deny Nazi Germany’s murder of six million Jews, but a more sophisticated version that accuses living Jews of genocide as a way of ending the historical Jewish claim to a long and ongoing history of persecution and near-annihilation that accounts for its need for a sovereign state capable of defending its people.

Finally, it is obscene because Mamdani is the mayor for about one million Jewish New Yorkers, many with close relatives in Israel, who deserve better on a day of grief than to be offered the equivalent of an “All Lives Matter” homily. This is yet another of the double standards through which modern-day Jew hatred manifests itself: Whenever antisemitism is mentioned in progressive circles, it is inevitably accompanied by nods about Islamophobia or other bigotries.

It would be better to have a mayor who, if only on Oct. 7, can say: Jewish Lives Matter. Israeli Lives Matter. Full stop. The lectures about Gaza can come some other day.