orswich
Sep 24 2002, 11:37 AM
- NEWS from soccernet
Saturday, September 21, 2002
Schalke get extra ticket funding
LONDON, Sept 21 (Reuters) - Germany's Schalke 04 have become the latest soccer club to raise funds from future ticket sales after the Bundesliga side agreed an £59million securitisation deal on Friday.
Former UEFA Cup winners Schalke follow in the footsteps of English premier league clubs Newcastle United, Leeds United and Manchester City, Spain's European champions Real Madrid and Turkey's Galatasaray.
The clubs are all seeking alternative means of financing major projects such as building or expanding a new stadium after the collapse of the equity markets.
'The lower cost of debt is an essential benefit,' Luke Reeve, an associate with investment bankers Schechter and Co, told delegates at a European football forum as he announced the Schalke deal.
But he warned: 'The key for clubs is not to mimic their players and get greedy - they must not get delusions of grandeur.'
A typical deal for many clubs would be to raise £25million, to pay back over 25 years. Newcastle, however, issued a £55million bond in 1999 to increase the capacity of their St James' Park stadium to 51,000 from 36,000 and to help buy new players.
Due to the popularity of the sport and the loyalty of fans, many leading clubs can guarantee future revenues because their stadiums sell out almost every home game.
They also have a substantial income from season tickets as well as executive box and corporate hospitality packages. However, television deals are no longer a guarantee of future income after the media problems seen across Europe in recent months.
They include the collapse of Britain's ITV Digital and Germany's Kirch Media and the struggle in Italy last month to secure a new rights contracts which delayed the start of the Serie A season.
'TV and media revenues are very difficult to securitise,' said Reeve.
Football clubs which looked to the stock market for funding during the 1990s have witnessed a collapse in share prices.
Chelsea shares, once riding high at 170p, are now worth just 16p. Tottenham Hotspur's have dropped to 27.8 from a 200p peak.
Even Manchester United, the richest club in the world which once became the first billion pound club when their shares hit 400p, now languishes at 98.5p.
Saturday, September 21, 2002
Schalke get extra ticket funding
LONDON, Sept 21 (Reuters) - Germany's Schalke 04 have become the latest soccer club to raise funds from future ticket sales after the Bundesliga side agreed an £59million securitisation deal on Friday.
Former UEFA Cup winners Schalke follow in the footsteps of English premier league clubs Newcastle United, Leeds United and Manchester City, Spain's European champions Real Madrid and Turkey's Galatasaray.
The clubs are all seeking alternative means of financing major projects such as building or expanding a new stadium after the collapse of the equity markets.
'The lower cost of debt is an essential benefit,' Luke Reeve, an associate with investment bankers Schechter and Co, told delegates at a European football forum as he announced the Schalke deal.
But he warned: 'The key for clubs is not to mimic their players and get greedy - they must not get delusions of grandeur.'
A typical deal for many clubs would be to raise £25million, to pay back over 25 years. Newcastle, however, issued a £55million bond in 1999 to increase the capacity of their St James' Park stadium to 51,000 from 36,000 and to help buy new players.
Due to the popularity of the sport and the loyalty of fans, many leading clubs can guarantee future revenues because their stadiums sell out almost every home game.
They also have a substantial income from season tickets as well as executive box and corporate hospitality packages. However, television deals are no longer a guarantee of future income after the media problems seen across Europe in recent months.
They include the collapse of Britain's ITV Digital and Germany's Kirch Media and the struggle in Italy last month to secure a new rights contracts which delayed the start of the Serie A season.
'TV and media revenues are very difficult to securitise,' said Reeve.
Football clubs which looked to the stock market for funding during the 1990s have witnessed a collapse in share prices.
Chelsea shares, once riding high at 170p, are now worth just 16p. Tottenham Hotspur's have dropped to 27.8 from a 200p peak.
Even Manchester United, the richest club in the world which once became the first billion pound club when their shares hit 400p, now languishes at 98.5p.