Sporting Lisbon Creditors Seek to Exit Ronaldo’s Old Club

Debtholders in Sporting Lisbon are looking to sell out of the historic Portuguese soccer club that unearthed global superstar Cristiano Ronaldo, according to people familiar with the matter.

Lenders Novo Banco SA and Banco Comercial Portugues SA are working with Rothschild & Co. to seek new buyers for the debt they hold in Sporting Clube de Portugal and Sporting Clube de Portugal Futebol SAD, entities that control the club, the people said.

Some of the debt will convert into equity should it fail to be repaid in 2026, the people said, asking not to be identified discussing confidential information. The potential to gain control via any such conversion could attract investors interested in owning a soccer club, one of the people said.

Sporting Clube de Portugal Futebol SAD had 128 million euros ($156 million) of outstanding convertible securities at the end of 2020, according to a company report.

Representatives for BCP, Novo Banco and Rothschild declined to comment, while spokespeople for Sporting Clube de Portugal Futebol SAD didn’t immediately respond to requests for comment.

Sporting Lisbon Creditors Seek to Exit Ronaldo’s Old Club

Sporting Lisbon is one of Portugal’s Big Three teams, alongside FC Porto and SL Benfica. The club has just won its 23rd Primeira Liga title and its first in 19 years. Founded in 1906, the club is a model soccer factory, discovering and developing young talent before selling these players on to bigger clubs of hefty fees.

Last year, it sold Portuguese international Bruno Fernandes to Manchester United FC in a roughly 80 million-euro deal. Its most famous export is perhaps Ronaldo, who joined Manchester United in 2003 and has gone on to become one of the game’s greatest-ever players.

Off the field, Sporting Lisbon and other Portuguese teams have struggled to fix their finances after years of mismanagement and a legacy of debt, dating back to the 2004 European Championships when clubs built expensive new stadiums.

Pandemic Hit

And despite being a breeding ground for stars of the future, Portugal’s Primeira Liga sits outside the big five soccer leagues in Europe, meaning broadcast revenue is modest compared with top divisions in the likes of the U.K. and neighboring Spain. Sporting Lisbon doesn’t rank among Europe’s top 30 teams by revenue, according to Deloitte.

Sporting Clube de Portugal Futebol SAD reported a net loss of 6.9 million euros for the six months to Dec. 31 last year, compared with net income of 2.8 million for the corresponding period in 2019, according to a company report. Sporting Lisbon has like other clubs across Europe seen its finances hit by the Covid-19 pandemic, which closed stadiums to fans and corporate sponsors.

The club will get an earnings boost after its recent Primeira Liga triumph, which guarantees entry to the lucrative UEFA Champions League tournament next season. In 2018, Sporting Lisbon’s failure to qualify for the competition contributed to an angry mob invading its training grounds and assaulting players and staff. The incident led to a number of players leaving.

Finding a buyer for the debt in Sporting Lisbon is Rothschild’s second mandate in quick succession tied to a well-known soccer club in Europe. Court administrators in France have hired the bank to advise on a sale of FC Girondins de Bordeaux, Bloomberg News reported in April.

©2021 Bloomberg L.P.

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