FC Barcelona Seeks to Turn Page on Turmoil With Stadium Revamp
FC Barcelona aiming to raise $1.7 billion to renovate its iconic Camp Nou stadium.
(Bloomberg) -- FC Barcelona is betting a revamp of its iconic Camp Nou stadium will help forge a rosier future for a storied club battered by the pandemic and soaring debts taken on to sign top players.
The Catalan soccer team let go of Lionel Messi, its biggest star, in August after the collapse of plans for a Super League of European top teams also scuppered the immediate prospect of a cash bonanza.
Barcelona is now seeking the approval of members to raise as much as 1.5 billion euros ($1.7 billion) to renovate and further develop facilities at Camp Nou -- a project known as Espai Barca, Chief Executive Officer Ferran Reverter said in a news conference yesterday.
The club is working to improve a project that had “serious shortcomings” and will take its pitch for financing to its membership at a meeting on Oct. 17, Barcelona said in a statement.
The work of repairing the club’s finances has already begun with a 155 million-euro cut to first-team payrolls applied this summer. In August, Barcelona secured debt funding arranged by Goldman Sachs Group Inc. with a 1.9% interest rate, compared to an average cost of 6% that it had under its previous financing deals, Joan Laporta, its president, said at the time.
Closed Stadiums
The Covid-19 pandemic brought many European soccer clubs to their knees by forcing them to shutter stadiums while continuing to pay out hefty salaries to players. Details published by Barcelona yesterday showed the depth of its financial woes.
Here’s a list of some of the findings from the report:
- Debts and future liabilities of 1.35 billion euros
- Deferred player salary liabilities of 389 million euros
- 61% increase in payoll in three years, 56% increase in administrative costs and 600% jump in financial costs
- 2020-2021 season loss of 481 million euros
- Club’s net negative equity now stands at 451 million euros
Barcelona chose to opt out of the deal reached in August by LaLiga with CVC Capital Partners that will invest 2.1 billion euros in the Spanish top league. If it were to accept the deal, it would receive between 270 million euros and 290 million euros, of which about a third could be used for infrastructure.
Clubs will receive the first part of the funding in November, but the window to join is still open, according to people familiar with the matter.
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