Top Belgian Soccer Team Has Star Power at Heart of IPO Pitch

Club Brugge is about to join a select group of listed European soccer teams, offering investors a chance to back its promise of unearthing the next stars of the game.

The leaders of Belgium’s top division will go public via an initial public offering in Brussels on or around March 26, according to a Wednesday prospectus. Grizzly Sports NV, an investor group led by Chairman Bart Verhaeghe, will sell at least 30% of Club Brugge at 17.50 euros to 22.50 euros per share, giving it a market value of 229 million euros ($272 million) at the mid-point.

Verhaeghe is betting that a model of nurturing young talent and selling it on to the free-spending teams of Europe’s biggest leagues, where players are often bought in for eye-watering sums, will play a major part in wooing investors.

Top Belgian Soccer Team Has Star Power at Heart of IPO Pitch

“We are making stars,” said Verhaeghe, who nearly became a professional player at 18 only to be steered toward law school by his father. “Other teams are consuming stars.”

Club Brugge adopts a data-driven approach to spotting and developing young players. Its regular participation in elite European competitions, including the UEFA Champions League, also helps it attract youngsters and then gives them a shop window to display their skills to potential suitors.

In 2019, Club Brugge sold the Brazilian attacker Wesley Moraes and Zimbabwean midfielder Marvelous Nakamba to the U.K.’s Aston Villa F.C. in deals worth about 36 million euros combined, according to figures from the club. This year, Senegalese winger Krepin Diatta moved from Club Brugge to France’s AS Monaco for almost 17 million euros. The club’s latest hot prospect is Belgian youngster Charles De Ketelaere.

“We have a unique way of making players the best version of themselves and we are dominant in the local market,” Verhaeghe said. “We educate this talent and if they do well they can move on to one of the top five leagues in Europe.”

Top Belgian Soccer Team Has Star Power at Heart of IPO Pitch

The Belgian club will join a small number of European soccer teams, including AFC Ajax, Borussia Dortmund, Juventus F.C. and Manchester United F.C., in having shares listed in the public markets. The sector has lagged broader European stocks over the last three years, according to data compiled by Bloomberg. A Deutsche Boerse AG index of European soccer teams was closed down last summer because of lack of interest.

“This is a club coming to the stock market where we are looking to make a profit,” Verhaeghe said. “I’d like to be listing as a company in a growing market but unfortunately some of my peers don’t run things in the same way.”

Club Brugge saw net profit rise 148% to 24 million euros on operating income of 120 million euros in the year through June 2020, according to its IPO prospectus.

To be sure, the ongoing impact of the Covid-19 crisis on soccer’s finances has dampened the market for buying and selling players, with even big-spenders like Manchester City F.C. and Real Madrid exercising caution in recent transfer windows. Club Brugge said its financial performance has been “resilient” amid the pandemic. Half of the club’s roughly 24,300 season ticket holders have not asked for refunds despite months of not being able to attend matches, Verhaeghe said.

The club has plans to move into a new 40,000-seat stadium. “It will be like going from a Lada to Mercedes,” Verhaeghe said.

Grizzly Sports will remain Club Brugge’s largest shareholder after the IPO and Verhaeghe will keep his role as chairman, according to the prospectus. Credit Suisse Group AG, JPMorgan Chase & Co., Berenberg and Belfius Bank are working on the listing.

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