Financial expert provides update on Sheffield United ‘payday loan equivalent’ deal with ‘vampire bank’


What at first glance sounds like some pretty boring legal jargon was actually rather intriguing, as the 38-page document detailed United’s arrangement with the London branch of the Macquarie Group; the Australian bank which provides the Blades with an undisclosed, secure cash amount on their Premier League parachute payments.

This is certainly nothing new – The Star first reported that United were doing business with Macquarie and had a loan facility in place in 2019 – but with the bank known as ‘Vampire Kangaroo’ due to his ruthless focus on profits, some Blades fans have little worried about the club’s financial future.

So we spoke with football finance expert Kieran Maguire, lecturer at the University of Liverpool and author of the book The Price of Football, to try to understand everything …

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What are we dealing with here?

It is in fact a reversal or renewal of the relationship United have with Macquarie Bank. Parachute payments come in lump sums over a period of time, just like Premier League money.

And all that says is Sheffield United are awaiting their next Premier League payout and could be content with a little cash now. So Macquarie said, “We’re going to give you the money now.”

It’s a bit more sophisticated, but it’s broadly equivalent to a payday loan. If you have cash flow problems today and you have the money guaranteed in a month or a few months, then the banks will lend you on the basis that when you get that money guaranteed it gets transferred to the bank.

Football financing expert Kieran Maguire

It’s a cash management problem, more than anything, and it’s very, very common in football. Even some so-called “blue chip” clubs are involved.

Manchester United have taken out an overdraft facility with some banks for £ 200million, Spurs have taken more than £ 630million in loans. How can you and I afford a house if we want to buy one? We get a mortgage.

Debt in itself is therefore not a problem. If there is a cheaper alternative, which could be for the owner to invest the money, then that’s fine, but it may not be feasible for a number of reasons. This could be the club structure, the owner can have his wealth tied to assets.

So this arrangement is common?

Sheffield United Bramall Lane Stadium – Tim Goode / PA

It is certainly quite common. Southampton, my club Brighton took a similar loan from Barclays, West Ham… a lot of clubs are involved. And remember, we are emerging from the biggest health crisis the world has faced in a century.

These provisions revolved around before Covid, but they have accelerated since the coronavirus in terms of clubs going to these third parties. Southampton, Derby, Sunderland have borrowed… if I went through the full list, it would be pretty big.

Why would a club go down this path?

It’s more a cash flow issue than anything else. Clubs are constantly budgeting and identifying when they need money for specific issues.

United will still owe money to other clubs for signings like Rhian Brewster – George Wood / Getty

Even though United had had a quiet transfer window, they had existing creditors of £ 95million in the accounts until July 2020. So some should have been paid and others would be linked to pending transfers, payments to players.

They signed a few players in the summer of 2020 and maybe paid half the fees then, and the rest over the next two years. We fans forget this because we tend to assume that if you sign a player for £ 23million you pay it all in one go.

But it’s the ongoing commitments that need to be factored in and create cash flow needs in these clubs, potentially requiring contacting an institution like Macquarie.

How much will it cost United?

The fees for clubs are interest charges. There was an article online recently which suggested that clubs pay an average of six to eight percent, which is not obscene.

It’s not cheap, but it’s not obscene. It could be that Macquarie has loaned United some of the payments they will receive over the next few years. After all, you don’t get a 100% bank mortgage on your house. So it could be £ 10million, £ 20million, £ 80million. We don’t know how much is involved.

United were the most profitable club in the Premier League in 2019/20. They had a fantastic season after leaving the league so the players would have had increases in their contracts but would not be on the amounts that many other players from other clubs would have been on.

Last season there were more raises and signings of players expecting Premier League salaries and the profits may have evaporated.

So, is there a reason Blades fans are worried?

You have to look at a club’s short term and long term financial needs, and I think those are short term cash flow issues. It is up to the management team to make sure that the debts can be paid.

Open invoices must be paid as they fall due, as is the case for all businesses and for all of us when it comes to our personal finances. Going forward, the club still have assets they can sell and I think some of the players who are still at the club were expected to be able to leave this summer. But they could leave in 12 months.

But there is no need to panic at first glance. I borrowed money when I had to in the past, and I’m still here.


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