Bond is just the ticket for clubs

As share prices tumble, football clubs remain committed to building new or extending existing stadia and to buying new players.

At least four Premiership clubs have recently had to be financially creative in order to generate sufficient funding for a variety of schemes.

Last week, on the day they announced annual losses of £7m, Leeds advised the City that they had raised £60m via the issue of a 25-year bond in order to pay off bank loans and to buy players.

The bond will cost Leeds £4.6m a year interest and is secured against future season ticket sales which last year generated £15.5m. The idea of issuing a bond secured against future season ticket sales has been put to good use by other clubs, such as Ipswich, Leicester and Newcastle, who raised £55m to fund the development of St James' Park.

In the summer, the club announced they were considering the development of land adjacent to the ground to build a 200-bed hotel, a shopping complex, cinema and 45 apartments.

Such diversification will ultimately allow clubs to break their overt reliance upon TV revenues

If football share prices fail to recover, raising money via the issuance of bonds secured against future diversified income will appear very attractive to clubs. What they must then try to do is to keep hold of as much of it as they can.