Financial expert gives insights into the agreement between Sheffield United and the “Vampire Bank”


What at first sounds like pretty boring legal jargon was actually pretty intriguing, as the 38-page document details United’s agreement with the Macquarie Group’s London office; the Australian bank which provides an undisclosed amount of cash to the blades upfront and is secured for their Premier League parachute payments.

It’s certainly nothing new – The Star first reported that United did business with Macquarie and set up a credit facility in 2019 – but with the bank known as the “Vampire Kangaroo” for its ruthless focus on profits, they did some Blades fans worry about the club’s financial future.

So we spoke to football finance expert Kieran Maguire, a professor at the University of Liverpool and author of The Price of Football, to get the whole picture …

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What are we dealing with here?

This is effectively an extension or renewal of United’s relationship with Macquarie Bank. Payments for the parachute are made in lump sums over a certain period of time, as is the money from the Premier League.

And all it says is Sheffield United is waiting for their next Premier League payment and could use some cash right now. So Macquarie said, “We’ll give you the money now.”

It’s a bit more sophisticated, but it’s broadly the same as a payday loan. If you are having cash flow problems today and there is guaranteed money coming in a month or a few months from now, the banks will lend you on the basis that when you get that guaranteed money, it will be passed on to the bank.

Football financial expert Kieran Maguire

It’s a cash flow management issue as much as anything, and it’s very, very common in football. Even some so-called “blue chip” clubs are involved.

Manchester United has taken out overdrafts of £ 200m with some banks, and Spurs has taken out £ 630m in loans. How can you and I afford a house if we want to buy one? We’re getting a mortgage.

So debt in itself is not an issue. If there is a cheaper alternative that may have the owner put money in it, that’s fine, but it may not be feasible for a number of reasons. It may be due to the structure of the association, the owner may have tied his assets in assets.

So this arrangement is a common one?

Bramall Lane Stadium from Sheffield United – Tim Goode / PA

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

These agreements were in place before Covid, but they have accelerated since the coronavirus in relation to clubs going to these third parties. Southampton, Derby, Sunderland have borrowed … if I went through the full list it would be pretty extensive.

Why should a club go this route?

It’s more of a cash flow problem than anything else. Clubs are constantly compiling budgets and determining when to need cash for specific issues.

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

Even if United had a quiet transfer window right now, they had £ 95million in existing creditors by July 2020. So some of it should have been paid for and some would relate to pending transfers and installments on players.

You signed a few players in the summer of 2020 and may have paid half the fee by that time and the rest in the next few years. We fans forget this because we assume that when you sign a player for £ 23m, you’ll pay all at once.

But it is the ongoing commitments that need to be addressed that are creating a cash flow requirement on these clubs that may require rapprochement with an institution like Macquarie.

What does it cost United?

The costs for the clubs are interest costs. There was an online article recently that suggested clubs pay between six and eight percent on average, which is not obscene.

It’s not cheap, but it’s not obscene. It could be that Macquarie United borrowed some of the payments they will receive over the next several years. After all, you can’t get a 100 percent bank mortgage on your home. So it could be £ 10 million, £ 20 million, £ 80 million. We don’t know the total.

United was the Premier League’s most profitable club in 2019/20. They had a fantastic season after coming out of the championship. The players would have had top-ups in their contracts, but would not have been at the level that many other players would have had at other clubs.

Last season there have been more promotions and signings from players expecting Premier League wages and profits may have evaporated.

So is there any cause for concern for Blades fans?

You have to look at a club’s financial needs in both the short and long term, and I think this is about short term cash flow problems. It is up to management to ensure that the debt can be paid off.

The ongoing bills are payable when they are due, as is the case for all businesses and for all of us in relation to our personal finances. Going forward, the club still has assets to sell and I think there was an expectation that some of the players who are still at the club may have moved on over the summer. But they could go in another 12 months.

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

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