Kaneing It: How Are Footballer Transfers Financed?

Earlier in August, German Bundesliga club Bayern Munich announced that it had signed England Captain Harry Kane from Tottenham Hotspur for a reported €116 million. Kane was signed with Spurs until 2024, and the club reportedly had no plans to sell him, but Spurs owner Joe Lewis was apparently keen to sell the player before his current contract drew to a close, leaving him free to transfer clubs for no fee

For his part, Kane was reportedly eager to transfer from, Spurs despite the team supposedly open to offering him a similar compensation package to the one he will receive in Munich. His motivation for a move was seemingly not financial (Kane has played for Spurs since 2004, playing only for other clubs on loan). Instead, his interest in a transfer was thought to come from his desire to play for a team that would give him a shot at winning big-league championship titles - something that seemed increasingly improbable with Tottenham. The negotiations for the transfer were protracted and mired with challenges, with Kane reportedly blocked from leaving the UK to sign the deal with Bayern at the 11th hour as final aspects of the contract were reworked (the exact details of which are not available). 

Most Expensive Transfers

Kane's transfer price apparently consists of his actual transfer fee plus various add-ons, which are thought to amount to a further €10-16 million. Despite his astronomical price tag, Kane only comes in around 15th place for the most expensive player transfers in history. The record for the most expensive transfer still sits with the infamous Neymar, who signed with Paris Saint Germain (PSG) in 2017 for €222. The second most expensive transfer is Kylian Mbappe, who also signed for PSG the same year for a little under €200 million

Financing Big-Ticket Transfers

Player transfers are exceptionally technical and often fraught with complications, given the number of parties involved (club owners, coaches, players, footballer's agents, the club's analysis, shareholders etc). Negotiations will start at the highest level (essentially between two interested clubs) and then filter down to the player and their team. Depending on the player's current contract, either side can back out of the transfer if they aren't happy with the conditions or terms they have the right to veto on. There are many reasons why this may happen, but it will usually be based on price, contractual terms (which include sell-on clauses), rights, salary, the player's personal motivations and so on.

The world's biggest football clubs are businesses, but even though transfers are commonplace, the club won't usually have millions of pounds of cash on hand ready to pay for player transfers - the sums in the current world of transfers are just too significant. As a result, they will often use debt to finance transfers.

The club will usually consider the players it wants that might be available for transfer long in advance of the transfer window, allowing them to accrue at least some of the capital they need to pay the transfer fee. The buying club will usually assess how valuable they think the player is and what they are prepared to pay for them. The player's track record, age, skill (talent, speed), playing style, injury record, contract length, demand from other clubs and other factors will determine what price a player's current club can set for a player - and what a purchasing club will end up paying if the transfer goes ahead. With technological advances, player valuation is increasingly analytical and data-backed. Still, there are unquantifiable elements to a transfer, which may include how well the player is expected to integrate into their new team, how they will affect their new team’s morale, sportsmanship, and their ability to adapt to the teams' style of play or work under a particular manager, adapt to life in a new country (if applicable) and so on.


Football clubs don't usually raise debt to finance football transfers directly (even the world's best footballers can't be collateral for a loan), and so a club will be able to use various corporate facilities and debt secured against the club's assets or cash flow. 

When a club raises debt, how loan capital can be used is negotiated from the outset between clubs and lenders and can include that capital used for specific requirements, including transfers, usually as a pre-defined percentage of the total facility. Clubs will typically raise debt through relatively conventional corporate facilities like cash flow loans, allowing the club to save funds which it can then use to buy players. In this sense, the club will effectively pay for the player primarily using their own cash reserves, albeit having raised debt through other facilities: one scenario often can't exist without the other.  

As with any corporate debt, the club will need to have a solid business plan in place that showcases the strength of its current financial position. A player transfer that will bolster the club's coffers with wins, more fan engagement, viewing rights, and popularity (which may translate to increased merchandise sales) can, of course, play a part in the club's future earnings. However, lenders will be looking at projections carefully. Any loan that can allows the club to finance a portion of a player (or player's) transfer(s) is exceptionally carefully underwritten by a lender. The amount that the lender can use for this is likely to be relatively small, essentially acting as a 'top-up' loan to facilite cash flow and optimise financial planning, even if the overall facility is much larger. 

The views and opinions expressed in this piece are those of the author, and do not constitute advise or a recommendation, nor do they necessarily reflect the official policy or position of Enness. Views and opinions are not intended to indicate any market or industry viewpoints, or those of other industry professionals.