It was an expensive summer in the world of soccer, and not only because of the obscenely price-gouged World Cup ticket prices. On the club level, FIFA has reported a record-breaking $9.89 billion spent on player transfer fees across more than 12,500 deals. Five moves entered the list of the most expensive transfers ever, together worth $775 million.
At the top of the summer’s rankings was Manchester City’s $169 million deal for Enzo Fernández, a fee that trails only the 2017 world-record transfer of Neymar to Paris Saint-Germain and Kylian Mbappé’s move to the same club later that summer. The transfer comes despite continuous tumult surrounding Fernández’s form and attitude in his final months at Stamford Bridge, but City seemingly didn’t care about the price tag. Like many other clubs, they understand the game can now be won by the highest bidder.
Yet with this declaration comes a question: Who the hell is paying for all this?
In some ways, the answer would also apply to the question of who is backing chain stores such as Barnes and Noble, Tatte and Guitar Center. It’s all private equity.
Market analysis reveals that over 36% of clubs in Europe’s “Top Five” leagues — the top flights in England, Spain, Germany, France and Italy — are backed by private equity, venture capital or private debt companies. The same is true for 11 of the 20 clubs in the English Premier League, the summer’s highest-spending division.
I am by no means an economist — in fact, I’ve never taken a single finance class — but this seems like an apt moment to attempt a basic breakdown of how private credit works. In reality, it is more of a blanket term, one that describes any institutional loans issued by non-banks. The financing for these loans comes from many places, including but not limited to insurance companies, pension funds and individual investors.
However, as the market for private lending has grown, so too has its volatility, and fears over major companies defaulting on their high-interest agreements have begun to push these systems to the precipice of catastrophe. In the second quarter of this year, investors’ withdrawal requests from private credit funds reached a total of $15.6 billion, up from $13.9 billion in the previous quarter. Most funds capped quarterly withdrawals at 5%, but if such requests continue at a similar pace, they may have no choice but to sell loans at a loss in order to pay back investors. Thus, the clubs in the world’s most prestigious — and least thrifty — leagues have found themselves involved with a financial system where doubt is growing by the day.
While it’s well publicized that clubs are looking to private lending as a Band-Aid fix for lack of liquidity in the transfer market, lesser-known cases of lending to fund club activities, such as infrastructural development and even equity purchases, also exist. These loans are usually borrowed against future revenue streams such as transfer payments, broadcast rights and season ticket income at yield rates that range from 8% to 9%. As revenue sources from media rights to transfer fees continue to increase, clubs — especially second-class teams — are being incentivized to make risky deals to stay in the game.
Here, the potential implications of negative on-field results cannot be overstated. Using the English Premiership structure as an example, if a team struggles and ends up getting relegated, their prize money for simply competing in league play drops from a minimum of about $145 million to a maximum of $15 million in the lower division. This financial blow is challenging for any club to bear, but for teams built on debt, the ramifications can be devastating.
Leicester City has become one of the premier examples of such misfortune. Leicester has been borrowing against its TV rights deals and other income through Australian investment fund Macquarie since 2021, but last season’s relegation to League One, the third tier of English soccer, could prove fatal if results don’t turn soon. Their story since the initial Macquarie deal has been one of tumult: a six-point deduction for breaching financial rules in February 2026, three relegations and a reported $96 million revenue loss in 2024–25. Leicester have unfortunately become illustrative of the pressure for immediate success leading a team to gamble on itself. In this case, it was a bet they lost.
The Leicester saga is simply bad business and poor play, but things can always be worse, and business can always be shadier. Take Olympique Lyonnais, seven-time champions of France’s Ligue 1, who went into administration and fell under the control of lender Ares Management after John Textor’s Eagle Football Holdings defaulted on payments last October. The club had racked up debts in excess of $600 million and was provisionally relegated to the second division before Michele Kang, the billionaire owner of the NWSL’s Washington Spirit, stepped in to buy the team for pennies on the dollar at just $30 million.
The fact that Textor’s loans from Ares were financed at rates from 16% to 20% exemplifies the issue at the core of modern soccer’s relationship with private lending: More and more clubs will be forced into deals that they can never repay in an attempt to cope with the rising price of doing business. Not every ownership group will decide to falsify transfer deals and borrow with impossible interest just to make ends meet, but more will continue to fail. In a game where every touch matters and margins are thin, especially for the little guys, one failed transfer, injury or patch of rough form could turn triumph into tragedy.
Teams at the top of the food chain — especially those with the deepest-pocketed owners — may find their advantage compounding even further.
As gambles made by their less-endowed competitors continue to fail, they’ll not only face less competition on the pitch but also enjoy increased opportunities to poach talented young players from clubs in desperate need of cash. Then, with virtually no limitations on spending in place — and even those that do exist seeming not to apply to clubs willing to spend enough to pay their way around the rules — we will be looking at a world where David’s chances against Goliath move from slim to none. If Leicester and Lyon are any indication, similarly positioned clubs may be better off finding another path to financing — if one exists — than risking a mistake that could sink them for good.
