"Absolutely ridiculous high" interest rates, a penalty clause, and "stranglehold loans": MSD Capital enters the lending market as Covid-19 increases risk

25 September 2020

GJ
Photo: PA Images A week ago, Southampton were reported to be on the verge of a takeover as their Chinese owner Gao Jisheng reportedly wants to sell the club, but sources believe a loan by MSD and a penalty clause could be a "poisoned chalice" for a potential takeover.

US funder MSD Capital has seriously entered European football and in the lending market people are raising their eyebrows.

Offthepitch.com has taken a look at MSD Capital and talked with multiple sources about the newcomer.

Cash flow issues caused by the coronavirus pandemic has ultimately led some to accept loans secured against all of their assets described as "stranglehold loans".

Offthepitch.com can also reveal that Southampton's £80 million loan with MSD includes a penalty clause to escape from the loan at 25 per cent.

Emil Gjerding Nielson and Mads Meisner nielson@offthepitch.com

Empty stands, turnstiles grinded to a halt and dust-collecting ticket offices. That has been the reality for English football since the coronavirus pandemic sent the UK into a lockdown and it is clear it will continue to be for the foreseeable future after the government ditched its plans for fans to return in October.

The past few months have been troublesome for most due to the complete absence of matchday revenue and the TV rebates clubs have been forced to issue as a result, ultimately leading to major cash flow issues from top to bottom of the English game. 

Do you want to read this article?

Get instant access by signing up for a 7-day free trial

No credit card, no commitments and it will expire automatically.

You will receive a link that activates your trial in an email.