Barcelona look for financial ways out

Barcelona required loans to ease the pain caused by years of poor decision-making in the transfer market and extravagance on player salaries, all of which was exacerbated by a pandemic that shattered commercial and matchday income.

The idea, therefore, was to apply for a loan from a bank and use anticipated future broadcast revenues from playing in the Champions League as the security for the loan.

UEFA’s response was a straightforward “no” and European football’s governing body explained to the Barcelona official that they could not use several years’ worth of future Champions League television money as security because there was no guarantee they would qualify for the tournament in every season. This is because Champions League qualification is secured through sporting merit, rather than a birthright.

The Barcelona official was described as genuinely surprised by the rejection.

When approached this week, UEFA told The Athletic it was unable to comment publicly due to “the confidentiality of the process”.

This summer, the curiosity has, in places, developed into envy and resentment, as Barcelona spent a combined €140million (£117m, $142.8m) to sign Brazil winger Raphinha from Leeds United, Poland forward Robert Lewandowski from Bayern Munich and France centre-back Jules Kounde from Sevilla. They also picked up Andreas Christensen and Franck Kessie from Chelsea and AC Milan respectively on free transfers.

Last August, club president Laporta gave a press conference in which he revealed a debt of €1.35billion (£1.13bn, $1.38bn) before outlining how the club’s salary obligations accounted for 103 per cent of income (even after Lionel Messi had left the club as a free agent once his deal expired) and said the club’s net worth stood at minus €451million.

A loan worth €80million had been taken out to cover player wages earlier in the calendar year. Another line of credit worth €550million had been required from Goldman Sachs to restructure the club’s debts.

The club, under their new president, are pursuing a different approach to returning to their former glories, instead heading down the route of activating several economic “levers” designed to inject cash into the coffers, fund new signings and get the good times rolling once more.

Barcelona have agreed to sell 25 per cent of their La Liga television rights income for the next 25 years to global investment firm Sixth Street. The first 10 per cent of this agreement is worth a total capital gain of €267million, while the figure for the rest has not been publicly disclosed but is understood to be worth over €300million.

This has divided opinion. Barcelona currently receive around €160million for domestic and international La Liga television rights, which means that, in effect, they will be giving up €40million next year (as 25 per cent of the TV rights), but this figure would be expected to rise or drop relative to increases or decreases in the value of La Liga’s broadcasting deals.

On Monday, while announcing the signing of Kounde (another who is not yet registered to play), Barcelona announced they had sold a 10 per cent stake of their Barca Studios production house to the blockchain-enabled fan token platform Socios.com, for €100million. That money, however, will not be presented in its entirety upfront.

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion. Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs. An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

The Political Economy of Football V2

Search This Blog