THE ARGUMENT IN 20 SECONDS
Football clubs should be allowed to borrow money to build themselves.
They should not be required to carry financial risk because somebody wants to buy them.
Manchester United showed the long-term cost. Liverpool showed how badly it can unravel. Burnley shows why the question still matters.
The owner should finance the purchase. The football club should not finance the owner.
There is something wonderfully ridiculous about modern football finance.
You can apparently be wealthy enough to buy a football club without actually having enough money to buy the football club.
You borrow the money.
You use the club’s assets, revenues or balance sheet to support some of that borrowing.
Then the football club spends years dealing with the financial consequences of somebody else purchasing it.
Brilliant.
For the buyer.
Not always quite so brilliant for the football club.
Here is my rule:
YOU SHOULD NOT BE ALLOWED TO BUY A FOOTBALL CLUB WITH THE FOOTBALL CLUB’S OWN MONEY.
If you want Burnley, Manchester United, Liverpool or Accrington Stanley, find the money.
Your money.
Your investors’ equity.
Your risk.
Not the stadium.
Not tomorrow’s broadcasting income.
Not future transfer instalments.
And certainly not cash already sitting inside the football club before you arrived.
Because if you need the football club’s financial strength to finance your purchase of the football club, I have a fairly obvious question:
Could you actually afford to buy it?
THIS ISN’T AN ARGUMENT AGAINST DEBT
Before somebody from private equity starts hyperventilating into his Patagonia gilet, let me make something clear.
Debt itself isn’t evil.
Businesses borrow money.
Football clubs should sometimes borrow money.
Borrow £50m to build a training ground that will serve the club for 30 years?
Fine.
Borrow to expand a stadium and create sustainable new revenues?
Potentially sensible.
Use short-term finance to manage genuine working-capital requirements?
Normal business.
The issue is acquisition debt.
Debt created not because the football club needs something, but because somebody wants to own the football club.
Those are entirely different things.
If Manchester United borrows £200m to rebuild Old Trafford, Manchester United receives an improved stadium.
If somebody borrows £200m to purchase shares in Manchester United and Manchester United ultimately services that debt, what did Manchester United receive?
A new owner.
And an invoice.
That is the distinction football should care about.
MANCHESTER UNITED: THE WARNING WE IGNORED
English football has already conducted this experiment.
We don’t need a theoretical model.
We have Manchester United.
When the Glazer family completed its £790m takeover in 2005, the deal was predominantly financed using borrowed money.
Manchester United had gross borrowings of around £50m before the takeover.
By the following year, gross debt had risen to around £604m.
Twenty years later, BBC Verify calculated that £1.187bn had left Manchester United between 2005 and 2024 through debt interest, net debt repayments, dividends and Glazer-related management and administration fees. (BBC)
Think about that.
More than a billion pounds.
Manchester United generated the revenues.
Supporters filled Old Trafford.
Broadcasters paid Manchester United.
Sponsors paid Manchester United.
Millions of people bought shirts because they supported Manchester United.
Yet an enormous amount of the club’s economic power was consumed servicing or rewarding a financial structure connected with its ownership.
What did Manchester United receive for the acquisition debt?
Not a £604m stadium redevelopment.
Not £604m of academy facilities.
Not £604m handed to Sir Alex Ferguson.
The owners got the shares.
The football club got the debt.
That should have changed English football regulation there and then.
It didn’t.
THEN LIVERPOOL SHOWED US AGAIN
Liverpool supporters know the story.
George Gillett and Tom Hicks bought Liverpool in 2007 using substantial borrowing.
Supporters were originally reassured that Liverpool would not become another Manchester United.
Then came refinancing.
Interest.
Pressure from the banks.
Arguments between owners.
Arguments about the club’s future.
And the promised new stadium never materialised.
By 2010, when the club changed hands, John W Henry said approximately £200m of acquisition debt loaded onto Liverpool during the Hicks and Gillett ownership had been repaid. The Guardian reported that Liverpool’s earnings had previously been used to service the interest on those takeover loans. (The Guardian)
Liverpool survived.
Obviously.
But survival isn’t the test.
Great football clubs are extraordinarily resilient.
Supporters keep going.
Broadcasters keep paying.
Sponsors keep paying.
The badge continues generating money.
That resilience should be protected.
It should not be treated as spare borrowing capacity.
AND NOW BURNLEY
This is where the argument comes home to Lancashire.
Before ALK Capital acquired control of Burnley in December 2020, Burnley was almost the opposite of the modern leveraged football business.
It wasn’t glamorous.
It wasn’t financially exciting.
It had something much less fashionable.
Cash.
Burnley had spent years operating conservatively.
Its most recently published accounts before the transaction showed £42m in the bank and no borrowings.
Then came the takeover.
ALK acquired an 84% controlling stake.
Contemporary reporting based on sources familiar with the transaction said approximately £60m was borrowed from MSD UK Holdings to part-finance the initial purchase and that between £30m and £40m of Burnley’s own existing cash reserves was also used in payments to the selling shareholders. The MSD borrowing was secured against the club and Turf Moor. ALK maintained that its financial approach was sustainable. (The Guardian)
Read that carefully.
Burnley had accumulated money through years of running Burnley Football Club carefully.
Some of that money then helped finance somebody else’s purchase of Burnley Football Club.
That is where football governance loses me.
Because however sophisticated the corporate structure becomes, the principle is extraordinarily simple.
The company being bought helped finance its own purchase.
WHAT HAPPENED NEXT IS MORE COMPLICATED
This distinction matters.
Burnley’s borrowing today is not simply the original MSD takeover loan sitting untouched five years later.
The financing has evolved.
Facilities have been refinanced.
Different lenders have appeared.
Player receivables have been factored.
Burnley has been relegated.
Promoted.
Relegated.
Promoted again.
Players have been bought.
Players have been sold.
Transfer instalments have moved backwards and forwards.
Football revenues have swung dramatically depending on which division Burnley was playing in.
So I am not going to make the lazy argument that every pound of Burnley’s current debt is somehow the original 2020 takeover borrowing.
It isn’t.
Burnley’s current balance sheet is the product of five years of operating decisions, football results, recruitment, refinancing and player trading.
But that does not make the original structure irrelevant.
Quite the opposite.
The takeover changed Burnley’s financial starting point.
Everything afterwards happened from that new starting line.
THREE NUMBERS
You can disappear down an accounting rabbit hole with Burnley.
I have.
So let’s simplify it.
The club’s audited 2024/25 accounts give us three numbers worth understanding.
£142.372 MILLION
Burnley FC Holdings’ total bank loans and factored debt at 31 July 2025.
That comprised:
£105.343m of bank loans
and
£37.029m of factored debts.
The accounts state that the bank loans carried fixed interest rates between 7.25% and 12%, while the factored debts carried rates between 8.5% and 12.75%. The factoring facilities were secured against the player-transfer receivables to which they related. (CTF Assets)
Then there is another number.
£80.986 MILLION
That is the outstanding debtor balance due from Velocity Capital (UK) Holdings Ltd, Burnley FC Holdings’ immediate parent company.
The accounts state explicitly that the balance arose in relation to the acquisition of Burnley FC Holdings Limited.
It is unsecured.
The accounts also state that amounts owed by group undertakings are interest free and repayable on demand.
However, the directors say they do not anticipate recovering the £80.986m in cash within twelve months and explain that the balance could potentially be settled through various means over time. (CTF Assets)
That last bit matters.
Before anyone reaches for a calculator and says:
“£142m minus £81m — easy.”
No.
It does not work like that.
The £80.986m receivable and Burnley’s external loans involve different legal counterparties, different security arrangements, different repayment mechanisms and different cash flows.
An asset on Burnley’s balance sheet cannot simply be netted against money Burnley owes completely different external lenders.
Nobody sensible is arguing that Burnley can press a button tomorrow and convert the entire £80.986m into £80.986m of debt repayment.
But that does not make the contrast uninteresting.
It makes it more interesting.
Because the football group simultaneously has:
substantial external borrowing carrying significant interest costs
and
a substantial interest-free, unsecured receivable from the ownership structure above it.
That does not prove wrongdoing.
It does not prove mismanagement.
It does not prove the receivable is unrecoverable.
But supporters are perfectly entitled to ask:
Why does this structure make sense for Burnley Football Club?
That is not conspiracy.
That is governance.
AND YES, ALK HAVE SPENT MONEY
This matters.
If you want people to listen when you criticise something, you have to acknowledge evidence that cuts the other way.
There is a popular argument that ALK simply sold Burnley’s players and pocketed the proceeds.
The accounts do not support that simplistic version of events.
Burnley have invested heavily in playing registrations during the ALK period.
So bin the lazy argument.
The more interesting question is whether substantial player investment, promotion and relegation volatility, dependence on player trading and expensive financing have combined to create a more financially fragile model.
That is a serious argument.
“They sold everyone and pocketed everything” isn’t.
If we expect owners to be transparent, supporters should be intellectually honest too.
THIS IS NOT A PREDICTION THAT BURNLEY WILL FAIL
I want to draw another line clearly.
This is not a prediction that Burnley Football Club is about to collapse.
It is not a complete going-concern analysis of Burnley.
Burnley’s finances today reflect far more than the circumstances of the 2020 takeover.
Relegations matter.
Promotions matter.
Parachute payments matter.
Premier League broadcasting revenue matters.
Recruitment matters.
Player sales matter.
Refinancing matters.
Football clubs are living businesses.
Balance sheets change.
So my argument is not:
ALK used leverage in 2020, therefore Burnley is doomed in 2026.
That would be nonsense.
My argument is much more fundamental.
The purchase of a football club should not itself make the football club financially weaker.
Whatever happens afterwards, that should be the starting principle.
Burnley matters because it allows us to see that question unusually clearly.
A conservatively financed club with significant cash entered a leveraged acquisition.
Its financial starting position changed.
Everything that followed happened from there.
THE REAL PROBLEM WITH LEVERAGED OWNERSHIP
This is where the model bothers me most.
Look at how the incentives can work.
If the value of the football club doubles, who owns that increase in equity value?
The shareholders.
If commercial revenues rise dramatically?
The shareholders own a more valuable asset.
If somebody eventually buys the club for twice the acquisition price?
The shareholders can realise the capital gain.
Fair enough.
They own the shares.
But look at the other side.
What happens if the club gets relegated?
The club loses the revenue.
What happens if broadcasting income falls?
The club deals with it.
What happens if refinancing becomes considerably more expensive?
The club deals with it.
What happens if recruitment fails?
The club deals with it.
And if acquisition-related borrowing has been transferred into the football structure?
The club services that too.
That is the bit I struggle with.
The investor owns the equity upside.
Yet part of the risk attached to buying that equity can be transferred into the institution being acquired.
And who remains after every ownership cycle?
The supporters.
That doesn’t look like equal risk to me.
FOOTBALL CLUBS ARE NOT NORMAL COMPANIES
This is where conventional corporate finance misses something important.
A football club contains something nobody can properly put on a balance sheet:
Cultural permanence.
Owners are temporary.
Supporters aren’t.
Chairmen leave.
Funds exit.
Investors sell.
Football clubs remain.
Burnley Football Club was founded in 1882.
Manchester United traces its history to 1878.
Liverpool to 1892.
Today’s owners represent a microscopic fraction of those histories.
That is why I reject the idea that buying a football club should be treated exactly like buying any ordinary leveraged corporate asset.
Buy a chain of warehouses.
Leverage it.
Merge it.
Sell a site.
Move the head office.
Whatever.
Burnley Football Club cannot be moved because the spreadsheet says the yield is better somewhere else.
Its value is tied to a place.
A history.
Families.
Generations.
Memories.
It existed before its current owner arrived.
It should exist after that owner leaves.
Owners should therefore be regarded partly as custodians of institutions, not merely purchasers of companies.
The rules should reflect that.
FOOTBALL ALREADY KNOWS THERE IS A PROBLEM
To be fair, football has started moving.
This isn’t 2005 anymore.
In June 2023, Premier League clubs unanimously agreed to amend the Owners’ and Directors’ Test to prohibit fully leveraged buyouts. (Premier League)
That matters.
It demonstrates that even the Premier League accepts there is a point at which acquisition leverage becomes unacceptable.
Good.
About time.
But notice the wording:
Fully leveraged.
That still leaves the bigger policy question.
How much acquisition leverage should be acceptable?
Where should that debt sit?
What assets should be allowed to secure it?
Should pre-existing club cash ever help fund a change of ownership?
What happens when acquisition financing is later refinanced into different facilities?
How should holding-company structures be treated?
And how do you regulate arrangements that satisfy the literal wording of a rule while creating substantially similar economic risk?
Football finance is very good at finding another door after somebody closes the obvious one.
So I would make the principle much simpler.
ACQUISITION RISK BELONGS WITH THE BUYER.
THE MATCHMAKER RULES
Five rules.
No 400-page regulatory manual required.
RULE ONE: ACQUISITION DEBT BELONGS TO THE ACQUIRER
If you borrow money to buy shares in a football club, that is your debt.
Not the football club’s.
It should not subsequently be pushed into the club.
The football club should not be required to service the buyer’s acquisition debt.
The stadium should not become collateral simply because somebody wants the shares.
You wanted the football club.
You finance your purchase of it.
RULE TWO: YOU CANNOT USE THE CLUB’S EXISTING CASH TO BUY THE CLUB
This should barely require explanation.
Money already sitting inside the football club belongs to the football club.
Imagine buying a pub for £1m.
You discover £300,000 sitting in the pub’s bank account.
So you use that £300,000 to help pay the bloke selling you the pub.
Would anyone seriously describe you as bringing £1m into that business?
Of course not.
You partly bought the pub with the pub’s own money.
Football should simply prohibit that.
RULE THREE: OWNERS MUST BRING REAL EQUITY
If a football club costs £500m, tell me how much genuine investor capital is behind the purchase.
Not a daisy chain of companies.
Not tomorrow’s broadcasting income.
Not future football receivables packaged into purchasing power.
Actual capital.
Actual money at risk.
Owners talk endlessly about having skin in the game.
Fine.
Show us the skin.
If things go wrong, the owner’s equity should absorb the acquisition risk.
Not the football institution.
RULE FOUR: CLUB DEBT MUST HAVE A CLUB PURPOSE
Ask one question:
What does the football club receive in return for assuming this debt?
A stadium?
Training facilities?
Academy investment?
Infrastructure?
Something capable of creating sustainable revenue?
Judge those cases on their merits.
But financing somebody’s purchase of existing shares?
What operational asset did the football club receive?
Nothing.
Ownership changed hands.
That is fundamentally a transaction between buyer and seller.
The football club should not automatically become the financing vehicle for it.
RULE FIVE: RELATED-PARTY MONEY MUST BE TRANSPARENT
Management fees.
Advisory fees.
Arrangement fees.
Related-party loans.
Interest.
Payments to affiliated businesses.
Publish them clearly.
Not fifteen notes deep in accounts months after the money moved.
If millions of pounds leave a football club for services supplied by an affiliated entity, supporters should be able to establish who received the money and broadly what the club received in return.
That is not radical transparency.
It is basic governance.
“BUT YOU’LL REDUCE INVESTMENT”
Possibly.
Good.
Not all investment is good investment.
If somebody tells me:
“I’d love to buy this football club, but the only way I can afford it is by borrowing heavily against the football club…”
Maybe they shouldn’t own the football club.
Football has allowed access to leverage to masquerade as wealth.
They are not the same thing.
Being able to borrow £300m does not mean you possess £300m of financial strength.
It means somebody is willing to lend you £300m.
There is a difference.
And when the collateral is a football institution supporters have spent generations building, it is quite an important difference.
THE SIMPLE TEST
Every prospective owner should have to answer this.
How much does the football club cost?
£500m.
Fine.
How much genuine equity are you and your investors bringing?
If the answer starts:
“Well, the structure is quite sophisticated…”
My ears are already twitching.
If the next sentence involves borrowing hundreds of millions against the very club being purchased, we have discovered something important.
The buyer may have found a way to finance £500m.
That does not necessarily mean the buyer is bringing £500m of financial strength into the football club.
Those are not the same thing.
Because if you need Burnley Football Club’s financial strength to buy Burnley Football Club:
You are not bringing the money.
You are bringing the transaction.
THE QUESTION IS BIGGER THAN BURNLEY
This is why I don’t want this reduced to an argument about whether Alan Pace is a nice bloke or a bad owner.
That misses the point.
This isn’t fundamentally about Pace.
Or the Glazers.
Or Hicks and Gillett.
It is about a system.
Manchester United demonstrated what acquisition leverage can cost over decades.
Liverpool demonstrated how dangerous the model can become when refinancing pressure and ownership conflict collide.
Burnley gives us a modern case study of why the principle still deserves scrutiny.
The structures are different.
The circumstances are different.
The owners are different.
And Burnley’s present-day borrowing cannot simply be labelled “takeover debt.”
But one question survives every one of those distinctions:
WHY SHOULD A FOOTBALL CLUB TAKE FINANCIAL RISK SIMPLY BECAUSE SOMEBODY ELSE WANTS TO OWN IT?
That is the question.
Not whether every leveraged takeover fails.
They don’t.
Not whether all debt is bad.
It isn’t.
Not whether sophisticated finance has a place in football.
It does.
The question is where the acquisition risk should sit.
And my answer is simple.
With the buyer.
OWNERS COME AND GO
This is what football repeatedly forgets.
Owners come and go.
Burnley remains.
Manchester United remains.
Liverpool remains.
Blackburn Rovers remains.
Your club remains.
The current owner is not the club.
The chairman is not the club.
The private-equity fund is not the club.
The holding company sitting three levels above it is certainly not the club.
The club is the institution they temporarily control.
That distinction matters.
Because once you understand ownership as temporary stewardship rather than permanent possession, the financial argument becomes obvious.
If debt builds the football club, assess it.
If debt improves the football club, assess it.
If debt creates infrastructure or sustainable revenues for the football club, assess it.
But if debt exists principally because somebody wants to purchase the football club:
That risk belongs with the purchaser.
Not the badge.
Not the ground.
Not tomorrow’s television money.
Not the supporters.
If you want to own one of our football clubs:
BRING YOUR OWN MONEY.
Buy the shares.
Take the risk.
Own the debt.
The owner should finance the purchase.
THE FOOTBALL CLUB SHOULD NOT FINANCE THE OWNER.