German football clubs have a unique financing mechanism – issuing bonds to their fans (Fußballanleihen). Bonds are effectively a way of borrowing.
The fan bond is often the last chance to get cheap capital with no strings attached, often for the clubs in financial difficulty.
From a pure credit perspective, most European football clubs are junk-rated businesses.
Fan bonds = risky credit at lower interest rate
It’s easy to view fan bonds as irrational, but they should not be viewed as a typical investment. After all, German clubs are owned by their supporters (50+1 rule). The fans are effectively both lenders and owners.
Some clubs are able to raise substantial amounts, for example Schalke recently raised €90 million, and several other clubs raised €40 - 50 million.
Question: What are your thoughts and experience with fan bonds? Interestingly Spanish clubs which are also owned by its supporters rarely finance this way.