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£3bn in the UK’s Offshore Football League

Manchester City tops the UK Offshore League

Today, The Offshore Game published the first edition of the Offshore Football League. The league ranks football clubs in the UK’s professional football leagues on an index based on the amount of finance they received from offshore and the secrecy of the finance they receive. The full report can be downloaded here:

In total the offshore league team found £3bn in loans and shares owned by companies based offshore in the UK’s professional leagues. This finance was found in 34 teams – 25% of British professional football clubs. 

All levels of football were represented, from giants Manchester United to League 2 Shrewsbury Town, although clubs more heavily reliant on offshore finance tended to be in the English Championship and Premiership.

The total finance figure breaks down into £1.1bn in debt and £1.8bn in equity. However, the equity figure is vastly dependent on three teams, Arsenal, Manchester United and Manchester City who between them have £1.5bn in equity held by offshore vehicles. Without these three teams the debt to equity ratio is reversed to approximately £900m debt to £400m equity. 

Manchester United had the most offshore finance, accounting for third of the value of the league with just over £1bn. That was made up of £882,922,000 in shareholder funds at Red Football Limited, the largest company in their UK structure to present consolidated accounts. Red Football Limited is eventually owned by Manchester United PLC registered in the Cayman Islands. A further £171,497,000 in debt was issued by their finance subsidiary MU Finance PLC. The loans come in the form of loan notes listed on the Luxembourg Stock Exchange

However, not all offshore pounds are equal. To create the Offshore League the team also looked at the secrecy of offshore financial centres from where their money came from. To do this we used the Financial Secrecy Index developed by the Tax Justice Network.

 When we add secrecy it is Man U’s rivals Manchester City that top the Offshore League. Manchester City has £445,770,264 in finance coming from the United Arab Emirates. This is in the form of £435,262,000 in equity owned by Abu Dhabi United Group Investment & Development Limited. A further £10,900,000 has been loaned by Abu Dhabi United Group to Brookshaw Developments, one of Manchester City Football Club Limited’s subsidiary companies. The United Arab Emirates have a significantly higher secrecy score than both the Cayman Islands and Luxembourg (themselves no beacons of transparency).

After Man City follows Bolton, Bournemouth and Spurs. Bolton and Spurs are owned by companies in Bermuda and the Bahamas. Bournemouth appears so far up the table because we were entirely unable to determine the jurisdiction where their parent company, AFCB Enterprises Limited was registered, never mind starting to assess its transparency.

 TeamOffshore holdingJurisdictionTotal Finance OffshoreProportion Finance from OffshoreScore
Totals and Averages£2,956,752,55242%455
1Man CityAbu Dhabi United Group Investment and DevelopmentAbu Dhabi UAE£445,770,26469%683
2BoltonFildraw Private Trust Company LimitedBermuda£151,305,00170%646
3BournemouthAFCB Enterprises LimitedUnknown£20,815,39459%644
4SpursENIC InternationalBahamas£116,661,25051%636
5Man UtdManchester United PLCCayman Islands£1,054,419,00066%614
6SunderlandDrumaville LimitedJersey£47,030,00021%575
7FulhamBig Cat Holdings LtdBermuda£13,439,00019%570
8CelticLine nomineesGibraltar£16,426,38920%570
9RangersBlue Pitch HoldingsUnknown£5,732,4467%569
10QPRTune QPR SND BHDMalaysia£165,684,00180%551
11Coventry CitySconset LPCayman Islands£43,976,55393%535
12ArsenalKSE UK IncUSA£242,919,26633%512
13Preston North EndWordon LimitedIoM£30,406,00073%501
14Dundee Football ClubFootball Partnership ScotlandUnknown£277,25328%479
15LiverpoolUKSV I LLCUSA£127,924,00041%470
16Albion RoversClifton Ordinary SuspenseUnknown£214,09719%469
17DumbartonGranada Enterprises LimitedBelize£643,60457%465
18Aston VillaReform Acquisitions LLCUSA£94,627,28340%463
19Cheltenham TownCTFC InvestmentsUnknown£180,1536%462
20WolvesBridgemere InvestmentsGuernsey£7,486,50017%461
21BirminghamBirmingham International HoldingsCayman Islands£3,847,00112%460
22Southend UnitedMezcal InvestmentsBVI£4,584,41039%440
23Shrewsbury TownJafreen HoldingsBVI£3,370,49524%431
24DerbyGeneral Sports Derby Partners LLCUSA£26,706,66546%431
25MillwallChestnut Hill Ventures LLCUSA£18,213,00169%421
26Sheffield WednesdayUK Football Investments LLCUSA£13,224,00053%413
27Blackburn RoversVenkateshwara Hatcheries Pvt LtdIndia£38,997,44451%349
28CharltonStaprix NVBelgium£20,559,00048%329
29WatfordHornets Management SARLLuxembourg£24,0770%294
30LeicesterKing Power InternationalThailand£117,761,00190%258
31IpswichMarcus Evans Investments LtdBermuda£75,437,00179%167
32Sheffield United LtdUTB LLCWest indies£10%84
33Hartlepool UnitedDove EnergyBVI£1066

To download the full offshore game report for free click here

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  • Marty

    Celtic’s ordinary shares are owned 35% by Dermot Desmond’s Line Nominees in Gibraltar. Your table says 20%!! He has control of Celtic and can convert his Convertible shares if anyone tries to buy up the ordinary shares. Any sale by Desmond would not incur UK Capital Gains Tax. Celtic score 570.
    Rangers have a shareholding by Blue Pitch Holdings of 4.91% and one by Magarita Funds Holdings Trust of 3.19%. Total 8.1%. No control but Rangers score 569.
    Figures and algorithm all over the place.

  • iain campbell

    This is interesting to read and must have taken a lot of work. But I’m not sure what it it adds up to. There’s a lot of words about potential for avoidance but nothing is ever set down, so I don’t see what avoidance has happened, if any. I think there have been enough examples of UK Directors acting badly, or even criminally, to show that overseas ownership or money is no worse than UK. I imagine you could also say the same thing about potential avoidance in a lot of areas – maybe it’s because the UK has so much money going in and out?
    There are two places where I think the Report gets a bit muddled. It analyses the accounts and finances using the conventional tools and says it makes no sense. But even on business lines isn’t it common in business for there to be lots of leverage, using borrowed money? Given that it seems to be money that gets players who get success then it might actually be sensible (inevitable?) to spend, spend, spend?
    But there are also criticisms that say that football clubs shouldn’t be acting like businesses. Nobody really sets out why this is so. Of course there might be lots of positives in adopting a supporters based model, or the German model, but is that likely in the UK? Changes to reporting might make things more open/transparent but how would you change the laws to make it not possible to borrow or invest from overseas, or to move to a different business model for clubs?
    The other (less important) area is around some of the notes on tax. I think there are some errors here and also a bit of xenophobia. It’s a bit misleading to say “If you have a foreign connection, it’s even easier to avoid tax”. Its tax on foreign income, not all tax, and I don’t think you get it with breakfast cereal boxes.
    That section then goes on to imply freeloading. “In the mean time you are free to live, work and use all of our public services in the UK just like any other UK citizen, but without paying any taxes on your foreign earnings.”
    Well, you still have to pay tax on your UK income, just like anyone else. And the words could apply just as much, if not more, to any tourists that come here, or students who cannot work here. Should we criticise them for not paying tax?
    “If you buy a business in the UK for £10 and sell it for £15 pounds, you pay a tax on your
    capital gain of £5.”
    This is a misunderstanding. If you’re a company then it’s easy to avoid any tax when you sell. You use the Substantial Shares Exemption. Guardian journalists should know this because the Guardian has done it.
    I’d be interested to read more ideas on how the basic structure could move to a more Continental model – bearing in mind that members clubs like Barcelona also seem to have engaged in tax shenanigans and have huge wage bills!

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