With Hedge Fund Out, Bordeaux Club’s Suitors Need $120 Million

(Bloomberg) -- FC Girondins de Bordeaux will require at least 100 million euros ($121 million) of fresh investment if it’s to survive financial collapse amid the coronavirus pandemic, according to people familiar with the matter.

The club is looking for new owners after being placed in the hands of administrators and potential buyers have been told they will need to pay this initial amount to cover debts as well as projected losses for the next two years, the people said, asking not to be identified discussing confidential information.

Bordeaux President Frederic Longuepee last week put the club under the protection of the City’s commercial court until a “sustainable solution” can be found. Court administrators have hired Rothschild & Co. to advise on a sale process, one of the people said.

Deliberations are ongoing and the value of any rescue deal could still change, according to the people. Representatives for Rothschild and the Tribunal de Commerce de Bordeaux declined to comment, while a spokesperson for Bordeaux didn’t immediately provide comment.

Soccer clubs across Europe have been dealing with the financial impact of the Covid-19 crisis, which has forced the closure of stadiums for more than a year. In France, the situation has been exacerbated by the breakdown of a lucrative media rights deal with the Spanish broadcaster Mediapro, which has seen clubs suffer further declines in revenue. Earlier this month French club AS Saint-Etienne was put up for sale amid these pressures, Le Progres reported.

Bordeaux said in a statement last week that its position became perilous when backers King Street Capital, a U.S. hedge fund that gained control of the club in 2018, took the decision to stop investing in the team. Bordeaux competes in France’s top Ligue 1 division, making it the first club in any of Europe’s top five soccer leagues to have had administrators called in before the end of the pandemic.

Founded in 1881, Bordeaux has won France’s top division title six times in its history. Over the years it has been home to some of the country’s most celebrated players, including World Cup winner Zinedine Zidane.

Its plight has already caught the attention of French billionaire Francois Pinault, a major investor in luxury conglomerate Kering SA who also owns Chateau Latour, one of Bordeaux’s premier vineyards. In a letter made public in French daily Sud Ouest this week, 84 year-old Pinault urged other Bordeaux wine estate owners to help rescue the soccer club, saying he’d been “moved” by the thought it could disappear.

While he can’t buy Bordeaux because he already owns Stade Rennais FC, a team in his home region of Brittany, Pinault said he’d be willing to participate in any rescue led by others. Pinault’s fortune is estimated at $50.9 billion, according to the Bloomberg Billionaires Index.

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