Last month, Nottingham Forest became the latest in a line of Premier League clubs to take on high-interest debt from American private equity.
In this case, as first reported by The Financial Times, Forest had made the decision to take out an £80m loan from New York-based fund Apollo Management, a company co-founded by Crystal Palace co-owner Josh Harris, with the loan reported to be over three years, as per corporate filings, at a borrowing rate of 8.75% per year.
In recent years, clubs have borrowed from a number of lenders, from some rather opaque ones such as Rights and Media Funding Limited, who had loaned Everton hundreds of millions until that debt was addressed through new ownership recently, while Australian bank Macquarie have been a go-to for a number of middle-to-lower-table Premier League clubs.
So what is the reason for Forest making this £80m move, and what might it mean going forward?
Forest find themselves in a stronger position financially than they were a few seasons back. They challenged for Champions League football last season, have ambitious owners who are ready to invest in both the team and the infrastructure, with the City Ground set for considerable development under Evangelos Marinakis’ stewardship, and they have European football to come this season and are viewed now as an established Premier League team.
That makes going to market to raise debt a little easier, and while the loan from Apollo may be pricey against what some of the biggest clubs can achieve when borrowing, it is with a respected institution that is providing a loan at below the cost of borrowing what was held with RMF, with that loan having been due for repayment at the end of July.
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The main purpose of the loan was to tidy up the balance sheet and reduce interest payments, with £55m of the loan used to refinance that debt, with the remainder to be used for working capital.
The summer can be an expensive time for clubs, but it does coincide with drops of cash from season ticket sales for the new season and a share of the Premier League broadcast money. But with transfer debt obligations to pay, as well as large payroll and the day to day expenses that come with running a football business that turns over hundreds of millions per year, cash flow is important.
That working capital could be put to work for some of the work that is required to move forward the City Ground redevelopment as well as meeting some transfer debt obligations that may arise in the short term, i.e within the next 12 months, this financial year.
Forest can extend the loan from Apollo for another two years if both parties agree, but it isn’t without risk. Forest secured the debt against club assets including the stadium, making it senior debt. What that means is that in the unlikely event of the club facing bankruptcy, then the New York firm would be at the front of the queue of creditors. Securing debt against tangible club assets is commonplace in football.
While the RMF loan has been cleared, more debt has been added, but given the lower cost of borrowing achieved, which has been locked in for three years, the actual increase for an additional £25m would only add some £600,000 to the interest payable. That makes the borrowing far more attractive to the club.
Of course, every debt must be repaid at some stage, and while there is the ability to extend for a further two years beyond 2027 they could refinance debt at a later stage if they can find cheaper rates of interest from different lenders.
Forest are ambitious and are making moves to try and drive forward revenues for the club above and beyond what they earn from prize money. Missing out on Champions League in that sense was impactful for the coming season, although there would have been no budgeting for such success at the start of last season, and money from European competition, which is set to be the Europa League barring a successful Crystal Palace appeal at the Court of Arbitration for Sport, is a welcome boon.
Get your Nottingham Forest pre-season supplement
Nottingham Forest pre-season supplement
It promises to be an exciting season ahead for Nottingham Forest.
The 2024/25 campaign proved to be a special one for Nuno Espirito Santo’s side. But it could get even better for the Reds this time around.
European football will be coming to the City Ground for the first time in three decades. It will be a whole new continental adventure for Forest, and they will be eager to give it a good go.
It all means there is a lot to look forward to this coming season. With that in mind, we have produced our Nottingham Forest 2025/26 Kick-Off special, our brilliant guide to the new season.
Our reporter Sarah Clapson will waltz you through what to expect from the Reds this coming season, turn the spotlight on Nuno, run the rule over one of Forest’s key men and take a look at the club’s transfer business. Our club-by-club guide will give you the lowdown on Forest’s Premier League rivals, while you will also be able to test your knowledge with our Premier League quiz.
We will also take a look at the summer’s biggest signings in the division, check out each ground and study the managers - new and old. With a full fixture list, Nottingham Forest 2025/26 Kick-Off will get you in perfect match shape in time for the Reds’ opening day curtain-raiser at home to Brentford on August 17.
Priced £3.50, pre-order your copy now from our online store and get it delivered direct to your door.