The move on European football is an extension of the growing dominance of US banks over their local banking rivals, advising Europe Inc. Europe’s top five investment banks by income are based in the United States, according to Dealogic.
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US banks have introduced financing options used in US sports that are seen as innovative in a region more accustomed to bread and butter loan deals. They are part of a larger group of financiers, including private equity funds, pension funds, insurance companies and other lenders, who target the yield market.
“The role of American banks in funding European football is huge and growing,” said Pedro Trengrouse, sports lawyer and coordinator of an international sports and football management program backed by FIFA, the governing body. world football.
There is also pressure on European clubs to increase their profitability by imitating the United States. In Europe, clubs run the risk of being demoted to an inferior, less lucrative league if they don’t play well.
Of the 12 clubs that have joined forces to create the American Super League, Liverpool, Manchester United,
Arsenal and AC Milan belong to the United States. At least four of the clubs that signed up for the league received funding from US banks, including JPMorgan, Goldman Sachs Group Inc.
and Bank of America Corp.
Kieran Maguire, a football finance professor at the University of Liverpool, said European banks face a higher risk of customer backlash if loans to football clubs go bad. They could be forced to tighten the financial screws of the teams, reducing their ability to spend on the pitch. American banks, he said, have more freedom of action because they are more detached from local communities. American banks do not have a strong retail presence in Europe.
Some European banks have also pulled out of football finance following the 2008 financial crisis that lasted for years in the region, said Greg Carey, head of sports finance at Goldman Sachs.
American banks also have a head start because of their experience in funding American sports stadiums and their relationships with the owners of some of the biggest teams.
Goldman Sachs created the so-called Mediaco structure in 2017 for Inter Milan and AS Roma, which allowed the two Italian teams to issue public bonds guaranteed by media and sponsorship rights, a structure they continue to use as a source of funding. The bank has committed a significant portion of its balance sheet to finance the sports sector, said Carey.
JPMorgan, which was due to provide the Super League with a loan of around 3.5 billion euros, equivalent to $ 4.2 billion, before the plan collapsed, has been involved in other big football deals European in recent years. In 2019, she and Bank of America led the structuring of a â¬ 575 million loan over 30 years to renovate Real Madrid’s Santiago BernabÃ©u stadium. Banco Santander in Europe HER
and Societe Generale HER
played secondary roles.
JPMorgan also advised Rocco Commisso, Italian-American owner of cable operator Mediacom Communications Corp. and New York football club Cosmos, when it bought Italian club ACF Fiorentina in 2019. He also advised American billionaire Dan Friedkin on his takeover of AS Roma last year. Goldman acted as an advisor to the owners of AS Roma in this deal.
In an earlier deal, JPMorgan, led by its banker Edward Woodward, advised the family of US billionaire Glazer to take control of Manchester United in 2005. Mr Woodward then moved on to the club, eventually becoming its executive vice president.
Following public outcry over the Super League, Mr Woodward has announced that he will be stepping down from his post at Manchester United at the end of the year.
âWe clearly misjudged how this deal would be viewed by the wider football community and how it might affect them in the future. We will learn from it, âa spokesperson for JPMorgan said on Friday.
As the stadium building boom in the United States began to slow about five years ago, Goldman Sachs turned to Europe. He led the bridge financing of the new $ 1.7 billion, 61,500-seat stadium for the Tottenham Hotspur in London. Bank of America and British company HSBC Holdings PLC were also lenders.
It is also participating in the renovation of the vast Camp Nou stadium in Barcelona. The bank is working on the 850 million euro project and has been involved in the design, engineering, economic feasibility and prospects for job creation, Mr Carey said.
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