Glazer-style leveraged buyouts at Premier League clubs face crackdown under football reforms

Glazer-style leveraged buyouts of top clubs in the Premier League face tougher curbs under future takeover reforms being discussed by football authorities.

Mark Bullingham, the Football Association chief executive, said he had been working with England's top tier and the Football League on new limits that could be enforced by the incoming independent regulator.

Most of the capital used by the Glazer family to purchase Manchester United in 2005 came in the form of loans, the majority of which were secured against the club’s assets, prompting widespread protests from fans at the time. Supporter discontent against the owners has resurfaced in the last year, with demonstrations being held before United’s final three home games of this season.

However, the leveraged buy-out that transferred ownership of Burnley to Alan Pace’s ALK Capital group illustrates the scheme's potential dangers as the Clarets battle relegation.

A drop to the Championship would automatically force Burnley to pay back much of a £65million loan taken out under a repayment clause. Despite one of the league's lowest spenders on players over the past decade, the club’s cash reserves reduced from £80m to £50m, while Burnley have collected £102m of debt, in the latest accounts.

Bullingham revealed in a press briefing that he and the leagues would looking at controls as part of new system on ownership checks. The football chief, who expressed hope that the Chelsea takeover would be waved through by May 31, suggested he had no issue, in theory, with the involvement of venture capitalists in club purchases. However, he added that there needed to be "security" over how much debt a club can be loaded with during deals.

"I think the thing to look at in future ownership structures is the way in which the debt is structured to purchase a club and making sure there's enough security around that," he said.

The FA is hoping the new independent regulator, put forward as a result of a fan-led review last year, will fall under its umbrella. Two non-executive directors have been added recently and there is hope a change in their own governance will allow it to be considered by Government.

"We've been quite consistent in terms of agreeing with a lot of the issues identified in the fan-led review," he said.

Curbs on leveraged buyouts is an area that could be enforced by the new regulator, he added. "I think that absolutely is something that will be explored," Bullingham said. "I didn't say get rid of them completely. It's the extent to which the buyer has leveraged it is important."

ALK Capital took out the loan at Burnley from MSD Holdings to finance the buy out and currently pay only interest at eight per cent. The full amount is due to be repaid in 2025.

Bullingham had been speaking at the Uefa Congress in Vienna. Earlier, Aleksander Ceferin, president of the European football authority, revealed he had spoken to Liverpool boss Jurgen Klopp following the German’s criticism over how Champions League final tickets are allocated. Klopp gave his backing to Liverpool fans’ group Spirit of Shankly last week after the organisation accused Uefa of “ripping off” supporters wishing to attend the showpiece match against Real Madrid in Paris later this month.

However, Ceferin said of their subsequent call: “I explained it to him a bit more and took much more time because I went through every single number. From the revenues from the finals, Uefa gets 6.5 per cent and 93.5 per cent goes to the clubs. From the other matches 100 per cent of the revenues goes to the clubs."