Since moving the club from High Wycombe and buying Coventry’s Ricoh Arena last year, Wasps’ owner Derek Richardson has enhanced his reputation as a sporting innovator.
Mr Richardson has effectively (and successfully) tweaked the club’s business model: only around one third of the club’s income derives from rugby as the arena is used for a variety of other purposes, including music concerts – attracting acts of the calibre of Bruce Springsteen – as well as acting as a venue for snooker and darts tournaments.
Earlier this week, Mr Richardson was at it again as Wasps became the first sports club in Britain to issue a retail bond on the London Stock Exchange. The club hopes to raise up to £35 million, part of which will be used to pay down a loan from Coventry City Council. The bond will pay investors an annual interest rate of 6.5 per cent.
With interest rates anchored at their historic low, and little sign of them heading north any time prior to mid-2016 at the earliest, retail bonds have soared in popularity. A succession of high-profile bond launches from businesses, such as John Lewis, have attracted millions of pounds of investment. In 2012, Tesco Bank was forced to pull its retail bond due to excessive demand: the bond raised £200 million in just two weeks.
A retail bond is a corporate IOU issued to investors upon which the company pays the debtor interest on the loan. Unlike cash bond deposits, however, retail bonds are not covered by the Financial Services Compensation Scheme.
They’re a relatively new means by which companies can raise cash. It’s only five years since the Order Book of Retail Bonds (ORB) was established by the London Stock Exchange, enabling them to be traded much like shares.
Several other sporting institutions, particularly those saddled with expensive debts on which they’re paying interest rates in excess of eight per cent (and there are plenty of them), will be watching how Wasps’ bond issue proceeds.
Should the club successfully raise the required funds, we can expect a slew of other sports clubs to follow suit. Would-be retail bond issuers should, however, ensure they possess the same diversified income mix as Wasps and ideally have a man of proven entrepreneurial ability such as Mr Richardson at the helm.
* “The league table doesn’t lie” is one of football’s most oft-quoted lines, though this particular form of pundit-speak is usually uttered in a conclusive, commiserating manner after a team has been relegated or fallen short of expectations.
It can, however, be used to prove that the greater a football club’s wage bill, the more likely they are to be successful.
The latest table of Premier League spending, comparing the most recently-published wage figures taken from club accounts for 2013-14, shows that in terms of performance-related pay, Southampton were head and shoulders above any of their peers. The Saints had Premier League’s the 16th-highest wage bill and still managed to finish eighth last season.
The wage table makes for sorry reading if you’re a QPR or Sunderland supporter, however.
Rangers, currently 19th in the league and on the cusp of relegation, spent £75.3 million on wages last term; Sunderland, one place above them in the league table, spent £69.5 million. These were, respectively, the eighth and ninth-highest amounts spent by any of the top flight’s 20 clubs.
The wage table was headed by Manchester United, who forked out £215.8 million in 2013-14; in second place were Manchester City, who spent £205 million in wages en route to winning the league title.
* Sky Box Office is believed to be doing ‘encouragingly brisk’ business, selling subscriptions to British fight fans at £19.95 a throw prior to Saturday night’s showdown in Las Vegas between Floyd Mayweather and Manny Pacquiao.
In the US, however, boxing enthusiasts are paying up to $99.95 (£66.95) to watch the fight, a cost which includes a $10 premium to enjoy it in HD; the ‘basic’ pay-per-view charge is $89.95, a significant increase on the previous high of $64.95 subscribers paid for another Mayweather fight, against Canelo Alvarez in 2013.
Saturday’s contest is expected to be record-breaking on several fronts. It should comfortably surpass the pay-per-view record of $152 million established by the Mayweather v Canelo duel and appears likely to attract more than the 2.5 million buyers who paid to watch Mayweather’s fight with Oscar De La Hoya eight years ago.
Boxing fans not wishing to pay to watch the fight might want to consider a weekend away: it’s being screened by free-to-air broadcasters in Poland, the Czech Republic and Hungary.