Monday, January 08, 2024
Most die-hard football fans dream of holding a season ticket for their team. But at the biggest clubs, just having the money isn’t enough to get you one. Supply is limited, which means waiting lists at some Premier League sides are more than 10 years long. However, some people are skipping the queue by taking a different approach: investing in debentures on Asset Match.
What is a debenture?
A debenture is a type of bond that some sports teams have issued to raise money from fans. Often this was done to fund major capital projects, such as building a new stadium. As well as offering a deeper connection with their club, debentures typically give holders the right to buy season tickets.
Debenture owners can sell their assets to others on Asset Match. Sometimes it’s a way of releasing equity – one seller used the proceeds as a deposit on a house – but it might also be an estate sale or someone who’s too old to go to matches and wants to allow a new generation of fans to enjoy season ticket rights. Debentures are often issued on a long-term basis, sometimes for more than a century, which means new buyers also have the option to sell in future.
Case study: Arsenal
Arsenal has issued debentures twice in recent history. The first time was in 1993 to help fund a new stand at Highbury. A decade later, the club issued another round of debentures to cover some of the costs of building the Emirates Stadium.
The platform that previously managed Arsenal debentures was very illiquid because of a lack of market transparency. Buyers found it difficult to know if any debentures were available and what their prices were. As a result, just five traded in three years.
This left one other option: buyers and sellers had to find each other by themselves. If they managed that, the next challenge was agreeing a price. There wasn’t much trading data, so it was difficult to determine a debenture’s value. Buyers also had no assurance that a debenture was legitimate, and they had no protection against fraudulent transactions. Arsenal decided to work with Asset Match to create a liquid marketplace where debentures could be bought and sold easily and safely.
As well as making a market, Asset Match supports the transaction, including arranging the listing, helping with negotiations, and handling paperwork. Any debenture listed for sale has been cross-checked to ensure it’s genuine, and an escrow service holds funds securely until the transaction has completed. Buyers can also see the whole order book, as well as a debenture’s trading history and the season ticket attached to it.
“Trading Arsenal debentures through Asset Match was a very easy process,” said one fan owner. “It is a very professional service which benefits debenture buyers, sellers, and Arsenal FC.”
The market for Arsenal debentures has become much more liquid. We’ve taken the number of debentures bought and sold from 16 in 2018 to 70 in 2023.
The value of Arsenal debentures has also risen sharply as the team’s performance on the pitch has improved. In 2018, they changed hands on Asset Match at an average value of just over £2,000. In 2023, the typical sale price was more than £10,000.
The renewed interest in Arsenal debentures has helped Asset Match reach a remarkable milestone: fans have bought and sold more than £1 million worth of them on the platform.
Supporting Arsenal and its fans
Arsenal debentures are a special asset because of the perks that come with them. By helping supporters buy and sell debentures, we aim to take the hassle out of trading for the club and allow more fans to watch their team at the Emirates.
“Asset Match are true professionals in all matters Arsenal debentures,” said Nigel Phillips on behalf of the Arsenal Supporters Trust, which has been dealing with Asset Match for more than six years. “Whether it be their knowledge of the terms and conditions, the marketing, or trade execution, they excel in all aspects. As these historically lightly traded and illiquid instruments have become super popular over the last year, Asset Match has upped its game to cater for the increased interest.”
With Arsenal’s star continuing to rise, we’re excited to see more fans taking an interest in the club’s debentures. It took several years for the total volume of Arsenal debentures traded on Asset Match to hit the £1 million mark. If the Gunners continue to perform, the next million may happen much more quickly.
Not all football teams have issued debentures, but there are other ways of allowing fans to own a piece of their club. For example, Tottenham, Burnley, Everton, and Rangers use Asset Match to create liquidity in their shares. We hope to expand our trading of sporting assets so fans of all clubs can trade them as quickly and easily as Arsenal supporters can.
If you’re interested in creating a marketplace for your organisation on Asset Match, please contact us.