NEW WAYS OF FUNDING TRANSFER DEALS

AS CREDIT CRUNCH FORCES CLUBS TO DO FINANCIAL ENGINEERING


We are in a credit crunch and an impending global economic slump where even the most solid businesses are having a hard time acquiring credit to fund their operations so it call for innovative ways for the spend-crazy premiership clubs to sustain their business model.One of such inventions is BESPOKE FINANCING. this is where a transaction is financed using tailor-made financial instruments.- a sort of a custom-made financing arrangement.
The January transfer window was marked by the increased use of bespoke loan facilities and debt trades to make deals happen. Spurs have struck lucky and have been the primary beneficiaries of 'debt forgiveness' meaning that their spending is closer to £20m than the reported figure of £49m. In Robbie Keane's case Liverpool still owed Tottenham around £11m of the initial £19m fee they agreed last summer, meaning his £12m move to White Hart Lane was completed with less than £1m in cash travelling in the other direction. Defoe's return did have a net cost to Spurs who notionally paid £15.75m for a player they sold for £9.2m last January, but with Portsmouth still owing outstanding fees for Defoe, Younes Kaboul and Pedro Mendes, only £6m in cash changed hands.

While Spurs have benefited from specific circumstances, the now-commonplace payment of transfer fees in instalments has seen an increase in the use of football-specific facilities to keep the transfer market moving. These niche products have boomed in the last year, driven by changes in the way that transfer deals are done and the pressure on cash flows. Where once deals were done on fairly straightforward cash terms, the size of modern transfer fees - there were six worth more than £10m in January alone - have left even the largest clubs having to pay in tranches. With selling clubs keen to get their hands on all the money up front, a small number of banks, specialist football finance houses and at least one player agency have developed bespoke loan products for football. Banks are increasingly being asked to provide facilities that allow the selling club to receive the full transfer fee up front, with the debt effectively being repaid by the buying club.
This could be explored here in Ghana even though our transfer market is not even matured and we don't need to reinvent the wheel.it fosters a less acrimonius relationship among our clubs and works to the benefit of club owners