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Demystifying football transfers with Richard Price

When you’re watching your favourite winger (football or rugby) terrorising opposition defences, uppermost in your mind is unlikely to be the thought ‘I wonder what the structure of the deal was that brought them to the club?’. 

Richard Price

Yet, despite football, in particular, having grown into very big business, with countless millions spent every football transfer window and many clubs worth billions of pounds, player transfers still need to be funded. Not every club has a wealthy benefactor.

For the last two decades Richard Price, owner of New Century Finance has been working with Close Brothers Leasing on funding player transfers in football and rugby, and he occupies an almost unique space in sports finance.

“A typical deal could be, for example, Club A selling a player to Club B for a top line figure of £15m,” explains Richard. “It works on an instalment basis; on day one of the deal, Club B pays Club A £5m, with the remaining £10m paid back over two years (£5m / year).

“Club A will want that remaining money to buy players during the transfer window so we give them a discounted figure and we get our money back from Club B on the due dates.”

According to Richard, doing business on this basis means neither company has ever lost money or even chased a late payment on a deal because the documentation ties in Club A to pursue the football creditor in the unlikely event Club B doesn’t pay.

“Football runs a tighter ship than many people realise,” said Richard. “We’ve managed over 350 transactions representing £750m in financing and have completed transactions with over 60 different clubs in football across the UK, Europe and South America.”

“We like to keep deals confidential and don’t register any charges at Companies House unlike many other lenders because this alerts the media.”

A typical transfer deal may be worth between £500k and £40 million.

Setting a high bar

The bar has been set deliberately high for funders who want to enter the football transfer market, with a number of key criteria needing to be satisfied.

“Before Close Brothers Leasing could start lending back in 2007, they had to win approval from the English Premier League, the English Football League and the Football Association,” said Richard. “They had to be approved as a lender first, which wasn’t straightforward.

“In addition, the documentation for every deal also has to be approved by all parties.”

Exclusive relationship

NCF works with Close Brothers Leasing on an exclusive basis, giving the bank first refusal, and, if a club or their representative approaches Close Brothers Leasing directly, they’re referred to NCF.

“The reason we work this way is, foremost, because of trust,” said Richard. “We’ve been working together for many years and have an established relationship and way of working that suits everyone.

“And the reason our clients keep coming back to us is because we’re nice to deal with; our documentation is relatively simple; we’re very well known in the market and we’re able to sort out problems with other clubs because we know them and have done business with them.

“Also, we work quickly – we can get a quote, credit cleared, and paid out in 10 working days.”

To find out more about sport finance, visit NCF’s website or follow them on LinkedIn.