How soccer can open the doors to bonds: the experience of Kickoffers

It was born from an idea by Filippo Sciorilli Borrelli and Michele Battolla: Kickoffers is a way to buy KickBonds, tied to a soccer player.
Sciorilli explains their idea.

Where did KickOffers start and how does it work?

It starts from a need of football clubs to find alternative sources of financing and an opportunity to increase fan loyalty. Clubs issue listed bonds with a floating rate based on the Club’s and players’ results on the pitch. Chievo was the first team to join our project linking their bond issue to Valter Birsa.

These bonds, which we call KickBonds, are addressed not only to the Clubs’ fans, but also to other football fans who see in the chosen player, in this case Birsa, an earning potential. It’s a sort of financial fantasy football.

What happens if the chosen player, in this case Birsa, is sold to another team?

If the player is sold before the maturity of the bond, the issuing Club will proceed with an early reimbursement and investors can also earn an additional bonus if the sale of the player produces a capital gain for the Club.

It’s important to point out that the bonds are listed on the stock exchange, which is essential because it allows investors not to be bound to maturity, in Chievo’s case the bond matures after three years to 30th June 2021. Therefore investors are able to decide, at any time, to buy and sell the bonds at market price .

In summary, investors have three options, bonds can be:

• Kept until maturity, collecting the annual interests and final reimbursement
• Sold any time before maturity on the stock exchange
• Redeem before maturity if the team sells the player and earn a bonus in case of capital gain

How is the interest calculated?

We wanted to create a transparent tool that would allow anyone, even with little financial experience, to understand the parameters that influence performance: the team’s position in the league, the result in the National Cup and the player’s goals, assists, yellow and red cards.

What does the player earn?

Nothing, it is the Club that is being financed through this innovative tool using the most valuable assets it owns: the players’ registration rights, thus increasing the player’s value and making the bond more attractive to investors. The player himself gains in notoriety but has no direct gain.

At the moment the product is structured in such a way that only the clubs can initiate the process. In Chievo’s case, in fact, the process started from the Club’s decision to raise finance. Birsa was chosen as a consequence of such decision. However, in the future there could be a reverse system, whereby supporters could ask to link a bond to their player of choice, maybe a young promise, and influence the company in this direction.

Did you have any contacts with other teams?

We have several active leads in Serie A TIM but we are also entering the Premier League, a market we see as riper for this type of deal, both from the clubs’ and public’s perspective.

KickOffers is an opportunity to increase fans’ loyalty by sharing with them not only the sports successes on the pitch, but also the financial successes of the Club. What’s revolutionary about KickOffers is that the better the Club’s performance and the higher its League position, the higher the TV broadcasting rights it earns and therefore the higher the interest it can share with all investors.

The same goes for the sale of the player: if a capital gain arises from the sale, part of it is shared with investors.

Chievo’s season was not the best in its history.

True, there were days of great uncertainty, which ended in the best possible way given the circumstances: 13th position in the League instead of relegation. It’s important to highlight the fact that, despite a worse season compared to past years, the bond would have yielded more than 8%!

Subscriptions are open until the end of July and a new promotion, launched by the President, is being particularly successful: rewarding investors with discounts on season tickets for the following seasons. Those who invest the highest threshold are even rewarded with a free season ticket for the entire duration of the bond, that is for the next three seasons.

The purpose is to offer a safe product compared to football betting where the risk of losing the entire capital is high. KickBonds are guaranteed by the Club, investors on top earn an annual interest and have the right to free season tickets, all the while enjoying it.

Does this bond have repercussions on financial fair play?

In a positive sense, for the following reasons:

• Liquidity: The finance being collected is classified as medium term debt, which becomes short term debt only in the event of sale of the player or in the year of expiry of the bond. Liquidity parameters calculated on the basis of the Club’s ability to pay its debts falling due within 12 months is therefore unaffected until the expiry year.
• Indebtedness: Being KickBonds listed products, they have to undergo a detailed admission process which certifies the issuing Club’s ability to repay its debt at expiry.
• Sustainability: On top of the company’s ability to repay its debt, what makes the product sustainable is the fact that annual interests are proportional to revenues deriving from TV broadcasting rights

Are you planning to launch on the Swiss market?

We have already been in touch with a few Swiss clubs. KickBonds should perhaps be structured differently as TV rights in Switzerland are different from Italy’s football market.

Our goal is to quickly expand to international markets in order to offer as wide a choice as possible to our users. The beauty of this product is that every team can adapt it to its needs: the amount being raised, the size of interest rates, the interest rates parameters. Birsa, for example, is an attacking midfielder, if you had to choose a defender you could change the parameters from what they are today (goals and assists) to amount of clean-sheet games or number of ball recoveries. What is fundamental is for such parameters to be transparent and observable by anyone.

What is your background?

I would define ourselves as financial professionals with personal passion for football, although we support the two opposing teams from Rome, S.S. Lazio and A.S. Roma! We wanted to merge these two backgrounds to bring fantasy football into the financial world and open this initiative to anyone interested in having fun in a responsible way whilst making an earning.

Investing in the stock markets is often seen as something suitable only for a minority of experts. We made stock market investment accessible to anyone by both setting a low initial investment threshold, starting at 100 euros, and using football principles that anyone can understand.

Is this portal really open to anyone?

Absolutely! Anyone from any country is free to register, the only requirement is to be over 18. The registration and opening of account procedures are fully online and regulated to offer the best possible user experience and safety to our users.