Citigroup's latest acquisition
This month, second division Italian football club Sampdoria adds a new twist to debt and equity issues by sports teams, by offering a bond deal whose repayments are linked to the team's results. The size of the issue at €3.5 million ($3.7 million) may be tiny in comparison with the money circulating in today's world soccer, where Inter Milan spent L90 billion ($49.2 million) this summer to buy Italy's centre-forward Christian Vieri. But that was the maximum the law allowed. "We would have liked to issue a bigger amount but we couldn't given the small stock capital of the club: L7 billion," says Stefano Stangoni, head of equity capital market at Caboto SIM in Milan, the Italian securities house that led the deal.
Soccer clubs across Europe are increasingly using the debt and equity capital markets to finance stadium development and to pay for new players. What's new with this deal is the redemption formula.
The deal will grant an annual return of 2.5% in any case, but it will rise to 7% if Sampdoria, which was relegated at the end of last season to Serie B, can regain promotion back to Serie A.