LONDON (Reuters) - The owners of Cheltenham Racecourse plan to raise 15 million pounds towards the cost of a new grandstand by selling horse racing fans a bond offering rewards including discounts on tickets.
The Jockey Club, which owns the track in western England, is planning to spend 45 million pounds on improvements for Cheltenham, adding a new grandstand and more luxurious royal box by 2016.
“We are offering a unique investment opportunity through The Jockey Club Racecourse Bond, which should appeal for its generous cash interest, rewards to enjoy a day at the races and the chance to support Britain’s second biggest sport,” said the Jockey Club’s chief executive Simon Bazalgette.
Held every March, the four-day Cheltenham Festival is one of the highlights of the jump racing calendar and attracted total crowds of more than 235,000 last month.
Billed as the first retail bond in British sport, racegoers will be asked to invest anything from 2,000 to 100,000 pounds for a five-year term.
The bond will give a return of 4.75 percent gross in cash, plus a further 3 percent in points which can be used to pay online for tickets, hospitality packages or food and drinks at the Jockey Club’s 15 British race courses.
Retailer John Lewis ran a similar scheme in 2011 when investors got some of their interest in shopping vouchers, while confectioner Hotel Chocolat offered chocolate as a payout in a bond issue in 2010.
The Jockey Club is targeting around 6 million Britons who went to races last year, making horse racing the country’s most popular spectator sport after football. Established in 1750, the Jockey Club reinvests its profits into British racing.
Motor racing circuit Donington Park in central England tried to raise 135 million pounds from instutional investors in 2009 but the bond issue failed.
Major British sporting venues like the All England Lawn Tennis Club at Wimbledon and English rugby union’s Twickenham Stadium have successfully used debenture schemes as part of their funding. The details of the schemes differ but fans normally make an upfront loan and get the right to buy tickets for events.
Editing by Greg Mahlich