Sports as an Asset Class: How Private Credit and Private Equity Are Reshaping Football and Implications for Large Commercial Law Firms

Private credit and private equity investments are reshaping the football industry. From stadium financing to equity stakes in clubs, these funding mechanisms are driving a new wave of expansion funded by private capital. Private lenders have become influential in the industry as traditional banks have become hesitant since Covid-19, while private equity firms increasingly view sports as high-growth, high-profile assets. A new wave of private capital investors have recently emerged alongside traditional club owners, like high-net-worth individuals and families. This surge of capital is not simply influencing the decision-making behind how sports are played or consumed; it represents a major shift in the deal landscape in football.

For large commercial law firms, this trend presents a new playing field of opportunity and challenges. The complexity of these private credit and private equity transactions requires law firms to be adept and innovative in drafting bespoke contractual agreements and evaluating non-traditional risks tailored to the investment of private capital in sport.

What do ‘private credit’ and ‘private equity’ mean?

Notorious for causing confusion, private credit and private equity carry different meanings, albeit there is a similarity between the two since both represent alternative investments and both constitute private capital.

In a nutshell, ‘private equity’ refers to a form of alternative investment where firms raise capital to acquire and manage private companies, or take listed companies private, with the end goal of selling them for a profit. These investments typically require significant capital commitments from outside investors, which are placed in a fund, usually supplemented by debt (of which private capital falls into this bracket).

Also considered an alternative investment, ‘private credit’, however, does not involve taking an ownership stake in a company but simply represents a loan. In this context, ‘credit’ simply refers to a loan that a borrower repays a lender with interest, and ‘private’ indicates this is a privately negotiated loan between a borrower and a non-bank lender. Because private credit bypasses the strict regulation governing traditional bank financing, it often carries higher risk. To compensate for that risk, lenders typically charge higher interest rates.

A private equity firm may also be a private credit lender. Blackstone, Apollo, and KKR – a triarchy of private equity magnates – all run both private equity and private credit arms.

Private Credit in Football

As sports has transformed into an asset class, private credit and alternative lenders have emerged as critical capital sources in global football.  

COVID-19 accelerated the growth of private credit into European football: revenues from matchday attendance plunged, traditional global banks retreated, and clubs turned to private lenders. MSD Partners (now BDT & MSD Partners), backed by Michael Dell, was the first mover. In English football, MSD’s notable loans have included nearly £80 million for Premier League team Southampton, £60 million for the leveraged buyout of Burnley Football Club, and a £20 million distressed loan for Derby County.

These private credit loans can be divided into four categories, each reshaping modified traditional patterns of lending in football finance.  

Firstly, stadium and infrastructure loans, which consist of long-term loans to build and upgrade stadiums and facilities. These loans are often secured against stadiums, real estate (RE), and venue income streams like tickets, naming rights, and hospitality. A good example is GDA Luma Capital $150 million loan offering to Everton Football Club to finance the completion of their new stadium at Bramley-Moore Dock.

Secondly, broadcast rights factoring, which involves loans provided to clubs against future broadcast revenues to plug immediate cash flow gaps. This is a form of lower-risk lending favoured by infra-focused credit funds such as the Rights and Media Funding (RMF), a key provider of £3+ billion in loans to clubs such as Everton Football Club, West Ham United F.C., and Nottingham Forest.

Thirdly, transfer fee factoring centres on selling clubs, having agreed to receive a player’s transfer fee in instalments, pledging those future payments to lenders in exchange for immediate cash. This provides selling clubs with upfront cash through pledging transfer instalments. Most prominently, Macquarie lends billions to Premier League clubs, including Wolves, Leicester City F.C., and Crystal Palace Football Club.

Finally, preferred or minority equity stakes provide capital without the repayment pressure. Here, investors rely on club growth and valuation. For example, Ares

Management Corporation provided a $500 million redeemable preferred equity following the acquisition of Chelsea Football Club. Such loans tend to provide private equity equivalent returns mixed with governance rights.  

Ultimately, private credit is no longer a crisis fix; it has become a cornerstone of football finance, which has developed its own credit practices to bridge the gaps left wide open by traditional banks.

Private Equity in Football

The other half of the private capital walnut is private equity.

Fundamentally, football clubs appeal to private equity for several reasons, including an industry offering guaranteed revenue streams, high fan loyalty, and apparent insulation from recessions. By the close of 2023, over 35 per cent of European football clubs were funded via private capital from private equity, venture capital, or other private consortia. The result of private equity’s injection of capital into club acquisitions and media infrastructure projects has been the reshaping of European football’s financial and competitive landscape.

RedBird Capital Partners’ €1.2 billion acquisition of AC Milan in 2022 is a model of how private equity firms can boost a club’s global brand. RedBird’s focus includes producing a pioneering stadium to drive match-day revenue, aligning Milan’s commercial strategies to tap into worldwide markets, and deploying analytics and technology to improve on-field performance. Here, RedBird’s leverages earlier investment expertise in Toulouse F.C. and Fenway Sports Group (Liverpool F.C. owners). At Toulouse, the club achieved promotion to Ligue 1 and financial stability, demonstrating the replicability of RedBird’s investment model.

Another case study is Silver Lake’s stake in City Football Group (CFG) – a holding company behind Manchester City and network of international clubs, illustrating how private equity can scale operations globally. CFG’s multiclub model emphasises a centralised talent scouting and development, unified commercial strategies for sponsorships and partnerships, and advanced analytics to optimise player performance and fan engagement. The CFG’s valuation, exceeding $5 billion, highlights the scalability and profitability of its multi-club model, while Silver Lake’s role demonstrates how private equity can support global expansion and bolster competitive performance.

One recent headline involved American private equity giant Apollo Global Management, Inc., which is in the throes of talks to invest €2.5 billion into Club Atlético de Madrid. Apollo is poised to purchase a significant stake in the club, in a deal that would also fund the club’s existing debt and its €800 million sport and leisure project around its Metropolitano Stadium in Madrid.

The transaction would be structured through a capital increase in Atletico Holdco, the entity that controls around 70 per cent of the club and whose current shareholders are Gil Marin (51 per cent), Ares Management (34 per cent), and club president Enrique Cerezo (15 per cent).

Separately, Quantum Pacific holds a direct 28 per cent stake in the club. This proposed structured transaction would mirror the route that Ares Management took during its entry after the pandemic in 2021 and provide a significant investment boost to Spain’s third-largest football club.

Private equity’s expansion into European football proves that the sport no longer remains the domain of quirky billionaire businessmen and sheikhs. The buying spree of US alternative asset managers is unlikely to end soon.

Implications for Large Commercial Law Firms

The shifting landscape has significant implications for large commercial law firms. Private credit and private equity are rewriting the rules in football financing and acquisitions – and large commercial law firms have an opportunity to be at the centre of these developments.

The surge of private credit into football has created a new complexity in financing structures that law firms must actively navigate. Unlike standard bank loans, these deals are bespoke and hybrid in nature: stadium-backed term loans with step-in rights for lenders, broadcast rights factored through securitisation vehicles, or transfer-fee receivables packaged for institutional investors.

Drafting here goes beyond conventional loan agreements – firms are now tailoring security packages around unique football cash flows, building covenants linked to player trading behaviour, and modelling repayment waterfalls tied to UEFA competition qualification or relegation risk. For example, in the Sevilla F.C. media-rights refinancing, where DLA Piper advised institutional investors, counsel had to balance lender protections with La Liga’s centralised rights framework – a negotiation that demanded both structured-finance and sports-regulatory expertise.

On the private equity side, the shift is even more pronounced. Traditional M&A templates do not translate neatly into football club acquisitions or league-level partnerships. Lawyers must embed governance mechanisms that reflect the sensitivities of fan ownership, league approval rights, and political oversight. In CVC’s investments in LaLiga, advised by Latham & Watkins, drafting shareholder agreements required novel exit provisions and controls over the use of commercial revenues – issues seldom encountered in standard corporate transactions.

Similarly, in RedBird’s €1.2 billion acquisition of AC Milan, where Davis Polk acted for Elliott, counsel had to build contractual protections around stadium redevelopment projects and brand monetisation strategies, rather than focusing solely on on-field performance.

Moreover, risk assessment has shifted. Law firms now evaluate non-traditional risks:

• Regulatory: UEFA’s Financial Fair Play, league-level salary caps, and broadcasting regulations affect cash flow forecasts. 

• Reputational: High-profile ownership disputes or fan backlash can depress club valuations and trigger political scrutiny. 

• Operational: Player-transfer markets, relegation clauses, and sponsorship fragility must be stress-tested in due diligence and reflected in covenants.

Law firms are expected not just to “paper the deal” but to provide integrated solutions to these obstacles. The firms that thrive will be those able to design contracts that internalise the sport’s volatility, while still enabling private capital to achieve its target returns.

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