Football finance expert Kieran Maguire delivers his verdict on Burnley's new loan

An expert in football finance says Burnley fans shouldn’t be too concerned about a fresh loan the club has taken out.
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Documents submitted to Companies House on June 6 show the Clarets have borrowed an as yet unknown amount from Australian firm Macquarie Bank.

It’s not the first time Alan Pace and ALK Capital have gone down this road following their leveraged buyout of the club in 2020. As part of that deal ALK borrowed £65million from MSD Holdings and a significant chunk of that had to be repaid following the club’s relegation to the Championship last year.

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According to the documents, the cash from the new loan is secured against Turf Moor and the club’s Barnfield training ground, as well as future payments from the Premier League.

Not a great deal else is known about the deal, so the Burnley Express spoke with Kieran Maguire, a senior teacher in accountancy at the University of Liverpool who also runs the Price of Football podcast, to find out more.

What do we know so far?

“We don’t know the sums involved at this stage.

A general view of Turf Moor, home of BurnleyA general view of Turf Moor, home of Burnley
A general view of Turf Moor, home of Burnley

“Burnley had to repay some money last season under the terms of the deal they had with Macquarie.

“What I think they’ve probably done is say ‘right, we’re back in the Premier League, can we sort of reverse that situation?’

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“That will help Vincent Kompany over the summer, it could be that ALK Capital have some commitments themselves…but we don’t know the exact details.”

Is this anything to be concerned about?

The Burnley Express spoke with Kieran Maguire, an expert in football financeThe Burnley Express spoke with Kieran Maguire, an expert in football finance
The Burnley Express spoke with Kieran Maguire, an expert in football finance

“I’m pretty relaxed about it.

"It was a high risk position Burnley were in last season. If they hadn't been promoted, I think they would have been in a challenging position but they were promoted, so it’s a bit like when you’re playing blackjack and you twist on 19 and you get an ace or a two and you come up well.

“They recruited well in terms of their manager and players (last year), which is why they are where they are today, so I don’t see too much to worry about.

“They will get additional money from the Premier League and they’ve now got two more years of guaranteed parachutes if the worst happens and they go straight back down again.

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“That puts them in a strong position, depending on how much they borrowed from Macquarie. That’s the big unknown as far as this transaction is concerned.

“We’ll find out in the accounts (how much that is), but that won’t be until next March/April.”

Is this quite a common thing among football clubs?

“This type of thing happens all the time now. Macquarie are very much into this and the likes of West Brom, Southampton and Leicester have all done it.

“Macquarie are one of the big players as far as the football owners market is concerned. The reason for this is that Barclays, HSBC, Lloyd’s, they won’t touch football clubs.”

What are the risks involved in Burnley are relegated and don’t come straight back up?

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“It’s a potential risk, but Burnley as a club has always been run very well.

“If they’ve got players they can sell, then I don’t perceive a problem. If they go down and sell a couple of players for £40m, then I don’t think the loans are going to be much more than that.

“The last time they went down it was what, £60m or £70m? And they repaid some of it. They sold (Dwight) McNeil and they got some other players off the payroll, which saw them through.

“Provided they’ve got players that will be coveted by other clubs…it’s not ideal because you don’t want to lose your best players, but it’s part of the business. It’s a factor of getting relegated.”

Do you suspect this money will be for summer signings? Or cash flow?

“It will be a bit of both.

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“You do get money fairly early on from the Premier League to allow you to compete in the transfer market.

“It could also be that they’ve got other financial obligations that we’re not aware of because Alan Pace and co effectively borrowed money to buy Burnley in the first place.”