Football sold bonds for the first time

An English club has raised nearly 700,000 euros from its fans, which it will use to renovate its stadium.

Selling most shares of a football club to wealthier owners willing to invest in new players, stadiums, or training facilities has been the common story for many smaller English clubs in recent decades. However, Phil Wallace, owner of current fourth-tier side Stevenage FC, took a different approach. According to Reuters, he became the first in history to sell club bonds directly to fans. He used a crowdfunding platform to organize the sale online. The five-year bond sale brought the club nearly 700,000 euros. Stevenage plans to use the money to modernize and increase the capacity of its stadium, which currently holds just under 7,000 spectators. “Especially for smaller clubs, I see this as an advantageous way to raise capital. We will hear about this form more often,” said sports analyst and football agent Jozef Tokos for the Economic Daily.

The crowdfunding company Tifosy, which organized the issuance and sale of the bonds, is co-owned by former Italian international striker Gianluca Vialli. He runs it with a former banker from Goldman Sachs and Morgan Stanley, along with two other investors. Vialli said that while the current bond values were relatively small, he and his partners are aiming higher. “We are close to completing something much bigger with a club from Italy’s Serie A and also from the English Premier League,” said the former Chelsea and Juventus forward. This still relatively new way of raising money in football offers a fresh source of income, especially for smaller sports clubs that lack access to international markets. “Bonds do carry certain risks – the company, in this case a football club, may not be able to repay them due to bankruptcy, a sharp drop in revenue, or other reasons,” Tokos noted. Holders of Stevenage FC bonds can choose either a 4% annual cash interest or an 8% return in club credit, which can be used to buy merchandise, jerseys, souvenirs, or food and drinks at matches.

Compared to regular bond trading, football bonds benefit from a special advantage. “There is a connection to the fans, who are willing to invest their money in their club because they trust it,” Tokos explained. Following Stevenage FC, Italian second-tier club Frosinone Calcio also issued bonds, worth 1.5 million euros, although it is not yet known whether the crowdfunding company has sold them all. One such fan investor is 65-year-old Carole Le Grand from Stevenage, who put in 1,000 pounds. She runs an institution for the mentally disabled in the town. “It’s all about supporting the club,” she said. She also hopes that the renovation of the north stand will include better access for people with disabilities. Tifosy admits it thoroughly vets clubs before approving this type of bond sale to fans. “We have had to say no to many because we were not satisfied with their plans,” said company co-founder Fausto Zanetton.