Management Consulting

In the realm of sports finance, Aon has identified and addressed specific challenges faced by football clubs in securing funding for player transfers and other financial needs. As clubs increasingly seek to leverage their growing TV earnings and sponsorship rights, they have turned to institutional lenders for accelerated access to cash flows. However, the traditional lending process often involves deferred payment terms, which can hinder clubs' immediate financial flexibility. Aon has tailored its solutions to facilitate upfront transfer fees, allowing clubs to access funds sooner. Aon’s approach involves working closely with banks and credit insurers to cover credit risk associated with player transfers and media sponsorships. In a typical transaction, when a club sells a player on deferred payment terms, Aon helps the bank advance the transfer fee upfront, taking assignment of future receivables. This arrangement not only provides immediate liquidity to the selling club but also mitigates the bank's risk through credit insurance, which protects against potential non-payment by the buying club. Additionally, Aon has established working capital facilities that enable clubs to access capital based on their future media cash flows, further enhancing their financial stability. The quantifiable impact of Aon's solutions is significant. By utilizing credit insurance, banks can optimize their capital allocation, allowing them to extend more credit to clubs. Aon’s recent report indicates that the total bank credit exposure covered by credit insurance across all sectors is approximately $300 billion. This increased lending capacity is crucial for clubs aiming to invest in player acquisitions and infrastructure development. Notably, Aon has successfully facilitated over 100 transactions in this niche market without encountering any losses, demonstrating the effectiveness of their risk management strategies. This innovative approach not only supports the financial health of football clubs but also contributes to the overall growth of the sports finance sector.