Gianluca Vialli launches crowdfunding campaign for sports finance
Ex-Chelsea striker seeks £1m for Tifosy to help smaller clubs secure funds from fans
Former star footballer Gianluca Vialli is looking to strengthen ties between fans and clubs, seeking funding for a venture that aims to tap the growing trend of sports teams using alternative ways to bolster their finances by looking to supporters.
The ex-Chelsea and Juventus striker is one of the founders of Tifosy, an equity crowdfunding group that allows ordinary individuals to invest in sports clubs, which can opt to raise funds through selling equity shares, mini-bonds or seeking donations in return for specific rewards.
This week, Tifosy launched a campaign to raise £1m from investors to fund its international growth, valuing itself at about £10m.
Speaking to the Financial Times, he said: “We are sorting out two major problems in sport, but now, especially in football: financing and disengagement between clubs and fans.”
Mr Vialli is a co-founder of Tifosy alongside chief executive Fausto Zanetton, a former investment banker with Goldman Sachs and Morgan Stanley. It claims to be the only “fully authorised sports crowdfunding platform”, after receiving approval to offer investments by the UK’s Financial Conduct Authority last year.
The group launched the first ever football mini-bond — retail bonds that cannot be resold and are offered in small amounts direct to consumers — helping the English Football League club Stevenage FC raised £600,000 last month to build a new stand at the club’s ground.
Tifosy said it has helped to raise roughly £1m for clubs since it was founded in 2015, including English teams such as Fulham and Coventry City, and a number of Italian Serie B clubs.
Sports groups have increasingly sought new routes to raise capital in recent years, finding banks increasingly unwilling to lend large sums of money and with owners unwilling to give up equity stakes to outside investors.
Last year, Harlequins, the Premiership rugby club, raised £15m by issuing a mini-bond, following the initiative of rival club Wasps, which raised £35m from issuing a bond on the London Stock Exchange in 2015. The Jockey Club, owners of 15 UK racecourses and Lancashire Cricket Club, have also raised cash through mini-bonds in the past few years.
“Football is a big pyramid,” said Mr Zanetton. “You have 20-25 clubs that are big businesses, that could be part of a stock index. The others are small and medium enterprises. If you think of how to finance these companies, they do not have always access to institutional funding. They need to be a lot more creative than relying on an owner to put money in.”
Tifosy takes a cut of roughly five to seven per cent from the sum raised from an investment campaign. The unprofitable start-up wants to break even by 2019, aiming to convince major clubs, such as those in the English Premier League, to launch similar crowdfunding campaigns.
Equity crowdfunding groups have come under fire in recent years, with critics arguing they target unwitting investors who may be unaware of the risks involved in investing in start-ups that have a high chance of failing.
But Mr Vialli said that sports groups seeking investment from fans will have a motivation beyond commercial aspects.
“The clubs call their sponsors ‘partners’,” said Mr Vialli. “Sponsors pump money into the club, they expect a return for their brand, but they don’t do it because they feel passionate about the club. Then you have the passionate people, the fans, and the clubs call them ‘customers’. That has to change. The fans have to become the partners.”