Wasps Rugby Club in the Aviva premiership is launching a bond on the financial markets in London which will raise £35 Million (€48 Million) and deliver a return to investors of a massive 6.5 per cent over the next seven years.
The venture echoes that which Cheltenham Racecourse completed in 2013 raising money to develop the facilities and rewarding fans of the sport at the same time with a blend of discounts and rewards.
A main difference though is that while the Jockey Club was aimed only at private investors this will be tradable on an offshoot of the London Stock Exchange and therefore subject to greater stringency.
Wasps completed the purchase of the Ricoh Arena in Coventry last December and are setting new records in attendance for club rugby in England. Smart marketing of the new ground has been undertaken by Dublin based agency Epsilon and the engagement they have built with fans is expected to see this offering full subscribed when it closes next week.
The minimum initial investment is £2,000 and after that it goes up in multipoles of £100. Given the demographic of rugby fans this is likely to prove popular across a broad range and will serve the dual purpose of locking in loyalty as well as paying down debt.
It will enable the club to move quickly towards a sustainable viable future within a professional rugby environment in England that is riding high off the back of major TV income and the hosting in October of the Rugby World Cup.
The high rate of interest in comparison to other investments is offset by the greater risk but even that is lessened in this case where the bond is secured against the club Stadium which also contains multiple other revenue streams through being rented back to Coventry City football club and with a Casino and Concert venue.
We wrote last year about whether this could be a viable and affective opportunity for the RDS and Leinster Rugby in advance of their redevelopment of the Arena. The growth of crowdfunding has prompted the more traditional financial markets to develop new instruments and sport, with it’s emotional as well as financial appeal can be one of the main sectors to benefit.
