Sep 27, 2022

The bank guarantees behind the world of sports

We take a look at how bank guarantees have played a significant role in the world of sports over the years.

'The Figo Affair: The Transfer That Changed Football’ is currently in the top 10 shows on Netflix, and an interesting anecdote from the documentary is the reference to a ‘500 million pesetas ($4.48m AUD) bank guarantee’ which would have appeased Luis Figo, keeping him at F.C. Barcelona back in 2000 with then-president Joan Gaspart.

Barcelona couldn’t produce the required bank guarantee, and Figo left to join arch-rivals Real Madrid after they paid his €64m release clause.

This smashed the world record fee paid for a footballer, and the failure to obtain a paper bank guarantee was a key domino in the background of the transfer. 

After watching the documentary, Lygon’s Marketing Manager Nicholas Farley took a deeper look in to how these instruments are involved in the world of sports and in some instances, working in the background behind some headline-making stories.

Diego Maradona’s move to Sevilla – 1992

One of the most famous footballers (or soccer players) of all time, and to many, the best to ever play the game, was often at the centre of controversy, but there was one occasion it was linked to a bank guarantee. 

In 1992, Maradona moved from Napoli to Sevilla for a fee of $7.5m USD. The transfer was so significant to the world of football that the involvement from FIFA and funding from Silvio Berlusconi’s Italian media company helped to ensure it went through.

With the 1994 World Cup fast approaching, FIFA were keen to get one of the world's marquee players into shape ahead of the tournament. Silvio Berlusconi also saw the value in Maradona, and his support came with the condition that Sevilla must commit to playing showpiece friendlies around the world. 

The transfer was riddled with disagreements from start to finish, but in November 1992, FIFA ruled that Sevilla should provide Napoli with a $4.5m USD bank guarantee for the remainder of the transfer fee. 

A month later, Napoli pushed for Maradona to be suspended until the remainder of the transfer fee was paid in cash. 

FIFA however, ruled that Sevilla’s bank guarantee was appropriate security to allow Maradona to play for Sevilla. 

Despite Napoli’s opposition, Maradona went on to play 26 times for Sevilla scoring 5 goals and made it to the 1994 World Cup.

Indian football team Hyderya Sports disqualified for a fake bank guarantee – 2021

India’s governing body for football, the All India Football Federation (AIFF), recently disqualified Hyderya Sports FC from participating in qualifiers for India’s top flight after a fake bank guarantee for the value of $46,000 AUD was discovered.  

As part of the application process to play in the I-League qualifiers, the AIFF required all interested clubs to submit a bank guarantee. 

It was reported that Hyderya Sports tried to duplicate the bank guarantee submitted by another team in the qualifiers for the I-League, Downtown Heroes.

Although denied by Hyderya Sports, condemning statements from the supposed issuing bank meant the ban was upheld, and Hyderya Sports were unable to take part in the 2021 - 2022 season.

Whilst this is a high-profile case of attempted bank guarantee fraud, it’s no secret that these instruments are prone to fraud, loss and damage.

Last year, a YouGov survey commissioned by Lygon found that over 66% of Australian SMEs have been hit by a lost, stolen or fraudulent bank guarantee or are worried it could occur. 

Former Newcastle Knights owner's expired bank guarantee - 2014

Hunter Sports Group, one-time owners of the Newcastle Knights, were required to provide surety to the club when they signed the takeover contract in 2011. 

In the terms and conditions of this contract, an active bank guarantee had to be in place for the first 10 years of the group’s ownership, which would be adjusted annually to reflect inflation.

in 2014 during one point in the tumultuous relationship, a temporary bank guarantee was approved on an interim basispreferred by Hunter Sports Group as a way to save money

However, the guarantee was allowed to expire, causing Newcastle Knights to operate without a bank guarantee in place to secure the club.

Hunter Sports Group were given an ultimatum by the Newcastle Knights Members Club – replace the bank guarantee within 6 days or lose the club for $1.

Although the club declared the issue had been resolved, the situation didn’t get any better.

After months of negotiations, Hunter Sports Group eventually relinquished control of the Newcastle Knights to the Members Club.

Whilst many other issues came to the surface during this ownership period, the lack of flexibility associated with paper bank guarantees placed unnecessary pressure on the National Rugby League club.

Figo’s transfer to Al-Ittihad falls through - 2007

A failure to obtain a bank guarantee stunted another move for Luis Figo, as the Saudi Professional League football club and the midfielder signed an 18-month contract in 2007. 

Luis Figo was now playing at Inter Milan and was approached to join the Saudi club at the twilight of his career.

If it went through, the move would have had him earning more than any other player in the whole of Asia at that time. 

However, despite numerous news articles on the confirmed deal, Figo failed to attend an unveiling ceremony in which he would be presented to press from around the world. 

The reason for this is said to have been because Al Ittihad failed to provide a bank guarantee to Figo.

As a result, the move fell through and Figo stayed at Inter Milan for the remainder of his career, retiring in 2009.

Real Madrid president Florentino Perez deemed untouchable by €124m bank guarantee requirement – 2021

Real Madrid’s presidential elections take place every four years, and for the past 23 years, Florentino Perez has remained in charge of the world's most successful football club.

During the election period, any candidate who wants to challenge Florentino Perez’s presidency must submit a bank guarantee to the value of 15% of the club’s annual budget. This figure in 2021 amounted to €124m.

Although Real Madrid has had some of its most memorable moments under his leadership, it is widely believed that the enormity of the bank guarantee needed to challenge Perez means he is deemed untouchable. 

So much so, Perez won his bid for the presidency in 2021 without any opposition, meaning he will be in charge until at least 2025. 

This will make him one of the longest-serving presidents in football history, a feat that may not have been possible without the requirement to provide a bank guarantee. 


Bank guarantees are an essential part of the global financial services landscape used by all sizes of corporates and financial institutions around the world.

However, it is interesting to see them involved so heavily to support less traditional projects in the sporting world. 

It is also interesting to look at the above through the lens of digital bank guarantees, and how the introduction of these digital instruments may have changed the narrative in some of these stories. 

It begs the question… 

If Real Madrid had access to Lygon, would they have kept Luis Figo? 

Would Hunter Sports Group still have ownership of the Newcastle Knights if they could amend their guarantees digitally? 

Would Maradona have secured his move to Sevilla earlier if issuing times were reduced to as little as a day?

Finally, how many of these stories are there elsewhere in the world of business? 

To sign up for more information on digital bank guarantees, get in touch.

A display photo of Nicholas

Nicholas Farley

Marketing Manager

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