Premiership rugby club London Wasps said it is "on course to become the richest rugby club in the world" after announcing its latest financial initiative, according to Chris Jones of the BBC. On Monday it will become the first sports club to "launch a retail bond listed on the London Stock Exchange," which is expected to raise up to £35M ($53.3M). That means Wasps "are set to pass" French club Toulouse in terms of revenue. Wasps CEO David Armstrong said, "We expect to be in that position either at end of this season or next season." He added, "We were previously the second-lowest revenue-generating club in Premiership rugby. We are now the second highest in Europe." He said that the bond will "restructure the balance sheet" and "put the club on a much firmer financial footing going forward." While most Premiership clubs "rely on broadcast revenue for the
bulk of their income," Armstrong said that the range of facilities at the Ricoh Arena means
Wasps "are breaking the mould." The Ricoh, also home of League One side Coventry City,
includes a 32,600-seater stadium, a concert venue, a casino, two
restaurants and a hotel. Armstrong: "This is creating a new financial model in rugby" (BBC, 4/26). In Coventry, Les Reid reported the Ricoh Arena company sold to Wasps in a "secret council deal last year on a massively extended 250 year lease" may be worth £48.5M ($73.8M), according to a new report. The "surprising new valuation" based on "trading potential" is contained in a Prospectus published on Monday inviting fans and other investors to buy "retail bonds" in the Premiership rugby club. The Prospectus outlines a "series of risks to fans and other retail bond holders ever getting their money back." The intention is to return their money by '22 with growth of the
Wasps business, which was £22M in debt last year
when Ricoh company Arena Coventry Ltd. also reported £400,000
losses (COVENTRY OBSERVER, 4/27).
KEEP THE CAP: In London, Alex Lowe wrote the Wasps "may be on course to become the richest club," but "they remain firm advocates of the salary cap." Owner Derek Richardson, who saved club in '12, "launched a staunch defence of the system," saying the Premiership "would become like Formula One without it." Richardson: “The salary cap works very well. There is no point it being like Formula One, when you have your McLarens and Ferraris winning all the time. You need to have the excitement and the fun and the competitiveness there as well" (LONDON TIMES, 4/28).
