M&G: Why football clubs are largely poor investments

Stefan Isaacs, a fund manager in M&G's bond team, dissects Liverpool's current turmoil and explains why football clubs remain an unattractive proposition for most debt investors.

Travelling back from Sunday's draw between Liverpool & Arsenal (it was never a sending off), I noted Liverpool Football Club had again made the business pages for all of the wrong reasons (see here). The current battle between RBS, the principal creditor to LFC, and its owners Tom Hicks and George Gillett continues to highlight the dangers of utilising leverage to buyout companies in certain industries. LFC was bought by the American pair for £219m in 2007, including debt. Back in April of this year, and unable to re-finance the current £237m of bank debt, Hicks & Gillett effectively ...