FogBlueInSanFran
Well-Known Member
As an American who studies the housing market closely and lived through the crisis of 2008, this looks suspiciously like TARP -- the program by which the Treasury and Fed put capital injections into banks in the form of preferred stock with a coupon in order to bail out certain banks on the verge of collapse. In that case, the stronger banks received capital injections whether they needed them or not, because if they refused, the market would devour the banks that did accept and needed the injections. So the stronger banks provided "cover" for the weaker ones, just as the better capitalized clubs provided cover for Real Madrid and (I assume) Juve and Barcelona.
The injections were duly repaid and structured as non-voting preferred stock. In this case, though, are we sure that JP Morgan had an equity stake, at the outset or through a convertible note? If it's just straight debt, then this simply looked like a debt consolidation loan, not unlike those ads you see for "fix your credit" companies we see regularly over here. I understand the security was the future broadcast rights, and JPM are no dummies normally (i.e. they aren't Deutsche Bank), so I figure there was some kicker to them if the league performed well.
And do we know who holds the ESL members' debt? I know it was at one point a lot of hedge funds at Utd some time ago, and if I recall right, Roman has equity and debt investments at Chelsea.
Either way I agree completely with you and @domalino that this really comes down to Real Madrid being in deep financial trouble, and they trying to lean on stronger clubs (financially or via their brands) to get a slice of a newly made up synthetic pie. Greed in the case of those other clubs; desperation in the case of RM.
