Wimbledon debentures: an ace investment for tennis fans?

20 February 2019

If you are a well-heeled tennis enthusiast, then you could gain entry to an exclusive circle, enjoying the best view at the championships with the potential to net a profit by selling on your much-prized seats

For two weeks every summer, a seat on Wimbledon Centre Court is the hottest ticket in town. Despite Andy Murray’s imminent retirement, it is still a safe bet that the UK will go tennis crazy come July.

For tennis fans, investing in a Wimbledon debenture could not only guarantee a seat close to the action, but net a decent profit too.

What is a Wimbledon debenture?

A debenture is a five-year season pass to Centre Court or No.1 Court during the Wimbledon Championships.

Centre Court debenture holders are guaranteed a prime seat for every day of the competition, while a No. 1 Court debenture gives you a seat for the first 10 days. Debenture holders can also access exclusive bars, restaurants and other facilities within the Wimbledon grounds, as well as their own car park.

The All England Lawn Tennis and Croquet Club (AELTC) issues debentures through a subsidiary, the All England Lawn Tennis Ground Plc. The funds raised are used to finance improvements to Wimbledon’s facilities. These include the roof on Centre Court, which has been in use since 2009, and the roof currently being installed on No. 1 Court, which should be operational in time for the 2019 championships, starting on 1 July.

Holders of Centre Court debentures enjoy a prime spot

A limited number of debentures are issued by the All England Club every five years. They are allocated via a ballot, with existing debenture holders given priority. However, it is also possible to buy a debenture on the secondary market.

In 2014, 2,500 debentures were issued for Centre Court and covered the championships from 2016 to 2020. No. 1 Court debentures are issued at different times – the current batch of 1,000 debentures covers the tournaments from 2017 to 2021.

Should I invest?

Debentures are not just a ticket to a high-profile sporting event – they can make you money too. Holders can sell their debenture for a day, the whole tournament or the remainder of the debenture.

The next Centre Court debenture series, running from 2021 to 2025, will go on sale within the next few months. The full prospectus and price will be published online at Wimbledon.com, but investors can register their interest now. The big question is: should you invest?

Prices range from £2,300 to £8,650 for a pair of Centre Court tickets

Debentures don’t come cheap. Prices for the next batch of Centre Court debentures have yet to be disclosed, but they are almost certain to be higher than the £50,000 people paid in 2014. No. 1 Court debentures are cheaper – the current tranche cost £31,000 each in 2017. However, it is important to understand that most debenture owners hold two debentures – it is rare to own just one – so you’ll be looking at more than £100,000 to buy your Centre Court pass.

“Wimbledon debentures, especially for Centre Court, represent a significant capital outlay and should only be considered by passionate tennis fans who have readily available funds,” says Martin Bamford, financial planner and managing director of Informed Choice.

“The ability to sell debenture tickets on secondary ticketing websites can make them quite attractive financially, but there’s certainly risk involved.”

New debentures will be on sale this spring

If you buy a debenture purely because you love tennis, you will be paying a lot for a seat at a tennis match, albeit one with a great view. A quick calculation shows how much.

The last Centre Court debentures cost £50,000. This entitles you to 13 days’ tennis each year for five years – a total of 65 tickets. This works out at £769 a ticket. This is far more than it costs to buy tickets via the public ballot. Centre Court tickets for the 2019 Wimbledon Championships range from £64 at the beginning of the tournament to £225 for men’s final tickets.

How to net a profit

There are two main ways investors can make money from debentures: selling individual tickets for Wimbledon tournament days or selling the remainder of a debenture at any time.

Debenture tickets are the only Wimbledon tickets that can legally be sold on. Tickets sold via the public ballot are not transferable, and Wimbledon is notoriously strict about policing this policy.

Wimbledon debentures: an ace investment for tennis fans?

Selling tickets for specific days can be lucrative. The best way to do this is probably via the Wimbledon Debenture Holders’ website (Wimbledondebentureholders.com) but you are also free to sell the tickets privately or on public marketplaces such as Gumtree or eBay. Hospitality companies are also keen to buy debentures, while Wimbledon itself also buys back debenture seats.

Due to their prime position and entry to various exclusive club facilities, debenture seats for the day cost much more than those sold in the public ballot. Prices for each day depend on the matches scheduled, with tickets for the quarters, semis and finals, costing the most.

At the time of writing, seat tickets for the 2019 tournament on the Wimbledon Debenture Holders’ website range from £2,300 to £8,650 for a pair of Centre Court tickets, and from £1,030 to £3,450 for a pair of No.1 Court seats. The price list is not fixed: as interest increases, so do the prices. Tickets are usually sold as pairs.

Using the ticket prices currently listed on the Wimbledon Debentures Holders website for 2019, someone holding two Centre Court debentures and selling the pair of tickets for every day of the tournament could pocket a total of £57,290 this year alone.

Wimbledon debentures: an ace investment for tennis fans?

Alan Higgins, chief investment officer at wealth management firm Coutts, says: “People buying a debenture should really be a tennis fan, as I am, I don’t like the pure investment stance.”

“They are designed for tennis fans rather than as investments. People who own debentures normally go to Wimbledon for a couple of days each year, then sell the remaining tickets.”

Tennis fans buying debentures, or any other tickets for Wimbledon, need to understand there is no guarantee they will see a specific match or player. Rain delays and long matches can mean the schedule being re-jigged with matches moving to different courts or different days than planned. No player’s appearance is guaranteed and drop-outs due to injury are common.

“You could go to a few matches and sell the rest of your tickets”

If the tournament looks on track for a classic ‘big four’ showdown, it might be tempting to put tickets to the men’s final up for sale. For example, when Andy Murray beat Novak Djokovic in the 2013 final, a pair of debenture seats was listed for £71,000 on a resale ticket site.

As well as selling individual tickets, debenture holders can also sell the debenture itself at any point in the five-year term. Debentures are financial instruments and are freely transferable. Due to high demand, they regularly change hands for much more than their original price.

Strawberries & cream

“To make money, you could go to a couple of matches and sell the remaining tickets for three or four years, then sell the remainder of the debenture,” says Mr Higgins. “However, this would make it tricky to buy another debenture as existing debenture holders get priority.”

Selling a debenture is normally done via a stockbroker or privately. Dowgate Capital Stockbrokers operates a weekly auction of debentures. Details of the most recent transfers can be found advertised in the Financial Times on the first Saturday of every month and on the Wimbledon debenture website.

There is the potential to make a decent profit this way. According to Wimbledon.com, the three most recent representative market value transactions for Centre Court, as notified to Wimbledon, at the time of writing are two for £110,000 each and one for £116,000, which all completed in the last three months of 2018. This is despite there only being two tournaments left until they expire.

No guarantee of knockout returns

Mr Bamford is quick to point out, however, that debentures, like any investment, are not risk-free and any profits very much depend on continued interest in tennis.

“I would urge investors to think carefully about the possibility of falling demand for tickets during the five-year term, due to factors outside of their control, such as boycotts or scandals reducing interest in tennis grand slams. Anything can happen when this much money is at stake,” he says.

A particular concern for investors should be what happens when the men’s game is no longer dominated by Roger Federer, Novak Djokovic, Andy Murray and Rafael Nadal. Andy Murray’s retirement is imminent, while the others are also in the latter part of their careers. We have yet to see whether other players will come forward to replicate this rivalry. On the ladies’ side, one of the cheapest debenture seats is often for the ladies’ final, partly because Serena Williams has had so little competition over the years.

It’s not just tennis…

Royal Albert Hall & Twickenham

It is not just Wimbledon that sells debentures. Other sporting bodies and arts organisations such as Twickenham and the Royal Albert Hall sell them too.

Prices and rules vary from venue to venue. But, in general, the buyer pays a one-off fee, which goes towards the upkeep of the facilities, and in return they get either tickets to all the major events held at the venue or the chance to buy tickets first at face value.

For example, a 10-year debenture at Twickenham costs from £8,500 and guarantees the right to buy a ticket to all England Men’s 15-a-side home internationals including the Six Nations and Autumn Internationals.

Debenture membership at Surrey County Cricket Club’s Kia Oval costs £2,300 plus VAT for 2019 to 2022 (four years). Each debenture member has the opportunity to buy a ticket in the debenture area for all international fixtures, including the Ashes Series in 2019. Members can either attend the game or sell their ticket.

Emma Lunn is a personal finance journalist who writes for the Guardian, Daily Telegraph, Mirror and Thisismoney.co.uk

In reply to by anonymous_stub (not verified)

“Using the ticket prices currently listed on the Wimbledon Debentures Holders website for 2019, someone holding two Centre Court debentures and selling the pair of tickets for every day of the tournament could pocket a total of £57,290 this year alone.” If the pair of debentures cost £100,000 for 5 years, that’s £20,000 per year outlay. Surely HMRC would have something to say about an annual profit of, in this example, £37,290, which would be £186,450 profit over a 5 year period. I find it hard to believe that this would be tax free as this article implies.“When Andy Murray beat Novak Djokovic in the 2013 final, a pair of debenture seats was listed for £71,000 on a resale ticket site.” Again, wouldn’t profits of this kind need to be declared and tax paid?

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