Yep, investors act a lot like bank loaning money to a club

they can make money charging interest on the money they loan to a club. They look to secure their loans against the equity in assets (often the stadium and training ground).

They will also look to use other peoples money rather than their own so for example they will borrow money from X then loan that money to the club. They can make money acting as a middleman - borrowing at a lower interest rate than they charge to the club.

The more money the club owes the investors the more money the investors can make so you can end-up with clubs owing enormous debts but it risks the whole thing going pop if the club surfers a sudden loss of income and can't afford the interest repayments etc.

Posted By: Larry Hagman, Jan 21, 10:48:50