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Clubs in limbo as Zebra halts season-ticket applications

Zebra Finance, which provides season-ticket finance options for UK sports clubs, has confirmed it is no longer accepting credit applications after its main lender, Raphaels Bank, withdrew its financial support.

Zebra CEO and shareholder Peter Fletcher told TheTicketingBusiness.com today (Friday) that the company remains solvent and he is “very hopeful” of maintaining a presence in the market and “ongoing” negotiations with potential new lenders are taking place.

However, he acknowledged that a failure to find a fresh lender to replace Raphaels within the timescale has forced Zebra to halt new credit applications. Zebra will continue to “manage and service existing customers” though, meaning those who had already applied for season-ticket finance for the 2019-20 season will not be affected.

“Raphaels have ceased lending, so Zebra is no longer able to process applications,” said Fletcher, who added that the current climate for lending had added to the challenge.

“I’ve had many conversations [with potential lenders] – well into double figures – but the amount of time it takes to secure funding is an issue. We are very hopeful of securing some funding to maintain our presence in the market, but it’s all about timing.

“Banks are not really keen to lend at the moment and that makes life a bit more difficult. There is the Brexit uncertainty [for the lenders] of course, but I don’t want to use that as an excuse.”

Fletcher added that Zebra’s underlying business remains healthy. A charge – a form of security offered to a lender in return for the lender providing a loan to the business – was registered in relation to Zebra in February, but then satisfied just over two weeks ago.

In its most recent set of financial results, for the 12 months through to the end of 2017, Zebra posted a year-on-year increase in net assets of nearly 40% to just under £590,000.

“The reality is that both companies (Raphaels and Zebra) are solvent, but Raphaels is simply pulling the funding,” Fletcher said. “We would probably have had a record year, but the vital ingredient is funding and it’s missing. It’s like a baker that doesn’t have any flour.”

Zebra allowed fans to split payments across manageable monthly payments whilst paying the club all ticket money up front. A total of 80 football clubs across England and Scotland have been affected by the latest development, with many of them having scheduled early-bird season-ticket renewal deadlines for this week. About 200 golf clubs have also been affected.

Some of the football clubs, including Leeds United from the second-tier English Championship, have reacted to the news by putting in place a new payment option for fans, allowing them to spread the cost of their season tickets over a six-month period.

Others, such as Leyton Orient from the fifth-tier Conference in England, said they would explore alternative solutions, with chief executive Danny Macklin posting on LinkedIN that he is “keen to hear about other affordable options for fans to spread the cost of their season ticket”.

The letter received by the clubs from Zebra stated: “For some time, the Bank of England has been in discussion with our funder, R Raphael & Sons plc, trading as Raphael’s Bank, regarding its suitability to hold a banking licence.

“Raphael’s has now detailed how it will achieve a solvent wind-down: central to this is a commitment to cease all lending.”

A Raphaels spokesperson told TheTicketingBusiness.com today: “It has been known for some time that the shareholders have been looking to divest themselves of their interests in the bank and to date the Motor Lending division has been sold and we are gradually withdrawing from other lending activities.

“R Raphaels & Sons continues to maintain its existing services at this time and is a sound well managed UK bank who are fully able to meet all obligations and commitments to their depositors, customers and partners.”

Image: Kieran Clarke