The footballing behemoth offered a breather by Ares
If there has ever been a sign of credit risk, an annual interest rate of 22 per cent is it.
That’s what Ares is charging Eagle Football Group, the prolific football investor and owner of Olympique Lyonnais, for part of the $450mn it’s owed.
Eagle Football was founded by John Textor, a former professional skateboarder who subsequently went into tech investing.
But the group has struggled with a heavy debt burden and the FT revealed this week that it’s long been in default on hundreds of millions of dollars of debt.
In June 2023, Eagle Football triggered a technical default by failing to provide Ares with adequate financial information “on a timely basis”, according to long-delayed accounts filed last weekend at UK Companies House.
Altogether, Eagle Football owes Ares about $300mn of ‘payment in kind’ debt with annual interest rates of 16 per cent, another $135mn at a rate of 18 per cent, and a final $27mn facility costing 22 per cent.
Not wanting to disturb the peace though, Ares has let the former minority owner of Crystal Palace off the hook.
The private capital group has been piling into European sports investments in recent years. Yet it decided against seizing Eagle Football’s assets and taking control of the clubs it owns.
Last week it told Textor’s group it wouldn’t seek repayment for a further 12 months. You might think that magnanimous, but Ares is starting to get its pound of flesh.
In July, Eagle Football sold its 45 per cent stake in Crystal Palace to New York Jets owner Robert “Woody” Johnson.
And it was none other than Ares that pocketed the vast majority of the £190mn proceeds from the sale.