Barcelona: Charged with corruption .... again!

They were also surprised at how the case spread like wildfire even when Negreira had no power.
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People simply spread news from click baiting diarrhea media without knowing how they work, because it suits their narrative.
 
Ragnar123 said:
People simply spread news from click baiting diarrhea media without knowing how they work, because it suits their narrative.
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Still have to prove it in court. UEFA are most likely going to wait for that case to close and then proceed based on the result. In this specific case, UEFA has no power.
 
The case spread like wildfire becasue there was a tax investigation followed by the opening of an investigation by the prosecutor's office. The idea that UEFA was "surprised" by this stuff is complete nonsense, as well as the ridiculous distinction between "click baiting diahrrea" and "Mundo Deportivo", a dogshit rag for sub 80 IQ culés.
 
Financing of Espai Barça

- The cost is €1,450M. Average interest rate at 5.5%. Fixed interest rate.
- No stadium mortgage.
- No club guarantee for debt.
- Guaranteed only by the income generated by the new stadium project. Without affecting the decision making of the club
- Payment does not start until the completion of the construction of the stadium in 2026.
- Cancellation of the current bridging loan.

"Eduard Romeu: "Thank you also to Goldman Sachs, who first gave a loan of 90 million in 2018 and then another 90 million that have now been included in this long-term operation."

- Structure of the repayment of 1,450 million euros, with three initial tranches that reach 24 years:

1 - - 5 years - €583M. Refinancing option
2 - - 7-9 years - €477M. Refinancing option
3 - - 20-24 years - €390M

- Eduard Romeu: "The income we estimate is €347M : The first €100M goes to the club, the next €94M to pay the debt and the rest to the club.

- Eduard Romeu: "Extraordinary income goes to a stock market and then comes out. The first 100 million will go to the club and the surplus will also go to the club. The banks have made a very important effort. They have granted us a five-year operation and we are prepared to sign another operation to lower interest rates if there is a window of opportunity. There is no penalty."

- Eduard Romeu: "The income forecast are conservative numbers. This is not a debt. We are fellow travelers. For example, if we have put a repayment of 100 million and we achieve lower extraordinary income, we should look for the formula to pay with joint solutions. There are some red lines in which investors cannot go beyond, they are assuming a risk".
 
Zen86 said:
Another 120 levers right there
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Only 8€M. And the workers were hired by Telefonica, not Barcelona. Those who were hired by the club are still in BarcaStudios.
 
SirReginald said:
Still have to prove it in court. UEFA are most likely going to wait for that case to close and then proceed based on the result. In this specific case, UEFA has no power.
Click to expand...

In some media here it has been said that UEFA could sanction Barcelona before the resolution. But they risk that Barcelona will be innocent and have to pay a very high compensation.

So the logical thing is to wait for a sentence that will still take time to arrive.
In any case the sanction would be the exclusion of champions league 24-25.
 
Niemans said:
Financing of Espai Barça

- The cost is €1,450M. Average interest rate at 5.5%. Fixed interest rate.
- No stadium mortgage.
- No club guarantee for debt.
- Guaranteed only by the income generated by the new stadium project. Without affecting the decision making of the club
- Payment does not start until the completion of the construction of the stadium in 2026.
- Cancellation of the current bridging loan.

"Eduard Romeu: "Thank you also to Goldman Sachs, who first gave a loan of 90 million in 2018 and then another 90 million that have now been included in this long-term operation."

- Structure of the repayment of 1,450 million euros, with three initial tranches that reach 24 years:

1 - - 5 years - €583M. Refinancing option
2 - - 7-9 years - €477M. Refinancing option
3 - - 20-24 years - €390M

- Eduard Romeu: "The income we estimate is €347M : The first €100M goes to the club, the next €94M to pay the debt and the rest to the club.

- Eduard Romeu: "Extraordinary income goes to a stock market and then comes out. The first 100 million will go to the club and the surplus will also go to the club. The banks have made a very important effort. They have granted us a five-year operation and we are prepared to sign another operation to lower interest rates if there is a window of opportunity. There is no penalty."

- Eduard Romeu: "The income forecast are conservative numbers. This is not a debt. We are fellow travelers. For example, if we have put a repayment of 100 million and we achieve lower extraordinary income, we should look for the formula to pay with joint solutions. There are some red lines in which investors cannot go beyond, they are assuming a risk".
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This money we owe isn’t a debt..

You can see why they’ve had so many financial problems with this logic
 
Niemans said:
In some media here it has been said that UEFA could sanction Barcelona before the resolution. But they risk that Barcelona will be innocent and have to pay a very high compensation.

So the logical thing is to wait for a sentence that will still take time to arrive.
In any case the sanction would be the exclusion of champions league 24-25.
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Sure, I didn’t expect you to be excluded from next years CL. To act before they close the case would be absolutely ludicrous. Iff anyone should be on trial it’s Laporta and anyone else in the boardroom who had any idea what was happening. Not your entire club.
 
SirReginald said:
Sure, I didn’t expect you to be excluded from next years CL. To act before they close the case would be absolutely ludicrous. Iff anyone should be on trial it’s Laporta and anyone else in the boardroom who had any idea what was happening. Not your entire club.
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The problem with member-owned clubs is that they can be fooled very easily. Just like in politics.
If you vote for a candidate and he lies to you, it's his fault. If you vote for him a second time then the fault is yours.
And all the lies and barbarities that Laporta did would be to put him in jail. And people vote for him again...
Not everything he does is bad obviously, because he surrounds himself with highly prepared/skilled people but you can find any scandal and it would be no surprise.
 
cyberman said:
This money we owe isn’t a debt..

You can see why they’ve had so many financial problems with this logic
Click to expand...

By that phrase he means that if the money for the annual payment of the debt did not arrive, both parties would seek a solution. There is no stadium mortgage and no club guarantee for debt.
The only guarantee is that income.

What financial problems does Barcelona have?
 
Niemans said:
By that phrase he means that if the money for the annual payment of the debt did not arrive, both parties would seek a solution. There is no stadium mortgage and no club guarantee for debt.
The only guarantee is that income.

What financial problems does Barcelona have?
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That’s the case for all these big loans. It’s only Barca who have to figure in not being able to pay it. They’re literally phrasing restructuring a debt as this new invention!
If they can afford it they pay it so it’s a debt. You can’t owe money and pretend it’s not a debt, that’s beyond ridiculous
 
cyberman said:
That’s the case for all these big loans. It’s only Barca who have to figure in not being able to pay it. They’re literally phrasing restructuring a debt as this new invention!
If they can afford it they pay it so it’s a debt. You can’t owe money and pretend it’s not a debt, that’s beyond ridiculous
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He is speaking in the event that the income for the stadium does not reach € 100M. Barcelona hope to raise €350M+.

And if the income did not reach the €100M that those who lent the money would do? If the only guarantee is this own income?

But as I said above this is not going to happen for the same reason these large companies have accepted this guarantee.

Barcelona is going to pay about €93M a year to pay for Espai Barça.
 
cyberman said:
That’s the case for all these big loans. It’s only Barca who have to figure in not being able to pay it. They’re literally phrasing restructuring a debt as this new invention!
Click to expand...

Barcelona has the debt structured and going down little by little. Now the club needs to lower the wage bill to have an ordinary economic balance.
 
FreckBarca said:
Isn't Barcatv part of Barcastudios?
I thought Barcastudios was Barçatv + Barca social media
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The mission of Barça Studios is, on the one hand, to produce audiovisual content and feed the club's channels (such as the Barça TV channel, social networks or the global streaming platform Barça TV+) and, on the other, to create new formats that can have a commercial route through other global operators.

FC Barcelona announces the sale of 24.5% of Barça Studios to the company Socios.com for an amount of 100 million euros to accelerate the growth of the Club's audiovisual and blockchain strategy, NFT and Web.3.

Barca TV was one of the parts of BarcaStudios. The channel was managed by Telefónica. Apparently it gave an annual loss of €10M+.

I do not know what value Barca Tv would have within BarcaStudios but I imagine that very little.
 
Niemans said:
He is speaking in the event that the income for the stadium does not reach € 100M. Barcelona hope to raise €350M+.

And if the income did not reach the €100M that those who lent the money would do? If the only guarantee is this own income?

But as I said above this is not going to happen for the same reason these large companies have accepted this guarantee.

Barcelona is going to pay about €93M a year to pay for Espai Barça.
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Ok, so I'm a corporate lawyer and was part of deals involving loans in the hundreds of millions (not every day, but at least once a year). I have NEVER heard about a loan that huge that would be granted with such an absurd uncertainty level (fixed rate, no guarantees outside of the money generated by the project, no collateral) and that would deal with missed instalments by "looking for the formula to pay with joint solutions". Debt restructuring is always tightly restricted in contracts and if you were to breach one of the conditions, the bank would use any legal means to get their money back. Also, even in case of unsecured loans, the bank can still seize an asset with a court order, especially if acceleration clauses were inserted in the contract (and it's not a "if" in loans that important).

There is zero way the deal is that sweet, banks are not charities.
 
Oly Francis said:
Ok, so I'm a corporate lawyer and was part of deals involving loans in the hundreds of millions (not every day, but at least once a year). I have NEVER heard about a loan that huge that would be granted with such an absurd uncertainty level (fixed rate, no guarantees outside of the money generated by the project, no collateral) and that would deal with missed instalments by "looking for the formula to pay with joint solutions". Debt restructuring is always tightly restricted in contracts and if you were to breach one of the conditions, the bank would use any legal means to get their money back. Also, even in case of unsecured loans, the bank can still seize an asset with a court order, especially if acceleration clauses were inserted in the contract (and it's not a "if" in loans that important).

There is zero way the deal is that sweet, banks are not charities.
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Master class of the Barcelona board. :D

The guarantee is the income of the stadium as they have explained. The first €100M for Barcelona and then the €93M for the loan.

Explain to me how they would get the money back if they signed what they signed? When Romeu says about travel companions, it is because if that happens then they would look for solutions to enter more money and thus pay the loan.

The banks accepted (fixed rate, no guarantees outside of the money generated by the project, no collateral) because they are sure that there will not be the almost impossible case that Barcelona enters less than €100M per year. The expected with the new stadium is €350M+.

Barcelona in the assembly of members, when they approved to ask for that loan, the conditions were that the guarantees could not be neither the club nor the stadium nor interfere with the sports project.

And not only fixed interest but Barcelona can negotiate when interest rates are lower.

In short, the banks accepted this condition because the interests for them are good and the risk is zero.
 
Oly Francis said:
Ok, so I'm a corporate lawyer and was part of deals involving loans in the hundreds of millions (not every day, but at least once a year). I have NEVER heard about a loan that huge that would be granted with such an absurd uncertainty level (fixed rate, no guarantees outside of the money generated by the project, no collateral) and that would deal with missed instalments by "looking for the formula to pay with joint solutions". Debt restructuring is always tightly restricted in contracts and if you were to breach one of the conditions, the bank would use any legal means to get their money back. Also, even in case of unsecured loans, the bank can still seize an asset with a court order, especially if acceleration clauses were inserted in the contract (and it's not a "if" in loans that important).

There is zero way the deal is that sweet, banks are not charities.
Click to expand...

What would have to happen for Barcelona to earn less than €100M a year? That would be the key question.

The only case would be another pandemic and those years could be negotiated to return the money when it returned to normality.
 
Niemans said:
In short, the banks accepted this condition because the interests for them are good and the risk is zero.
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Well I'd say nearly zero. The club would not survive another empty stadium season probably.
 
Niemans said:
He is speaking in the event that the income for the stadium does not reach € 100M. Barcelona hope to raise €350M+.

And if the income did not reach the €100M that those who lent the money would do? If the only guarantee is this own income?

But as I said above this is not going to happen for the same reason these large co
Click to expand...
Niemans said:
Master class of the Barcelona board. :D

The guarantee is the income of the stadium as they have explained. The first €100M for Barcelona and then the €93M for the loan.

Explain to me how they would get the money back if they signed what they signed? When Romeu says about travel companions, it is because if that happens then they would look for solutions to enter more money and thus pay the loan.

The banks accepted (fixed rate, no guarantees outside of the money generated by the project, no collateral) because they are sure that there will not be the almost impossible case that Barcelona enters less than €100M per year. The expected with the new stadium is €350M+.

Barcelona in the assembly of members, when they approved to ask for that loan, the conditions were that the guarantees could not be neither the club nor the stadium nor interfere with the sports project.

And not only fixed interest but Barcelona can negotiate when interest rates are lower.

In short, the banks accepted this condition because the interests for them are good and the risk is zero.
Click to expand...

They would just be an ordinary class of creditor. They haven't invested with a view of the share of the profits. It's a loan over a fixed-term with what looks like a pledge over a certain income flow.

Similar, but on a much larger scale to someone taking out an unsecured personal loan. No mortgage means action can't be taken directly against the asset and, in an insolvency process you would have no priority over other creditors and anyone with a valid security would sit ahead of you in terms of distribution of assets but you still have recourse through the courts.

An example for UK people is if an unsecured debt isn't paid as promised the lender can approach either the county court or high court and seek a judgment for payment. If the court agrees the monies are owed a judgment is granted on terms the court sees fit. If the debtor doesn't comply with the terms set by the court the lender can then apply for enforcement on the judgment debt. This can allow control of assets - things like bailiffs, arrestment of income, or -directly against property a charge being granted and potential order for sale.
Larger lending has more complex procedures but the principle is still the same.

The procedures in Spain are similar enough. I can find specific directives relating to unsecured lending later or tomorrow if you need them, and Spanish courts can also accept judgments gained in other jurisdictions and apply them as if they were Spanish judgments subject to certain provisos.

This isn't to say that this is a bad deal for Barcelona and realistically the risk on this lending is extremely low. I can see how it is being positioned and it makes sense to put it in the best possible light.

However, finance doesn't work in a world of no recourse for the lender. The route taken makes it a more complex process for the lender, and the courts would have more broad discretion when applying enforcement but it could still happen.

An extreme hypothetical to illustrate: In 3 years time some kind of TV deal or other income stream is secured bringing in billions a year for Barcelona. Following their ethos of being mes que in club, they decide stadium income is largely unnecessary and offer seating at massively discounted or free for underprivileged supporters.

The idea that lenders would then have zero recourse to recover money is nonsensical. So in spite of this having no security and no influence on decision-making by the board there are still consequences to non payment and action that can be taken to recover money.
 
DanH said:
They would just be an ordinary class of creditor. They haven't invested with a view of the share of the profits. It's a loan over a fixed-term with what looks like a pledge over a certain income flow.

Similar, but on a much larger scale to someone taking out an unsecured personal loan. No mortgage means action can't be taken directly against the asset and, in an insolvency process you would have no priority over other creditors and anyone with a valid security would sit ahead of you in terms of distribution of assets but you still have recourse through the courts.

An example for UK people is if an unsecured debt isn't paid as promised the lender can approach either the county court or high court and seek a judgment for payment. If the court agrees the monies are owed a judgment is granted on terms the court sees fit. If the debtor doesn't comply with the terms set by the court the lender can then apply for enforcement on the judgment debt. This can allow control of assets - things like bailiffs, arrestment of income, or -directly against property a charge being granted and potential order for sale.
Larger lending has more complex procedures but the principle is still the same.

The procedures in Spain are similar enough. I can find specific directives relating to unsecured lending later or tomorrow if you need them, and Spanish courts can also accept judgments gained in other jurisdictions and apply them as if they were Spanish judgments subject to certain provisos.

This isn't to say that this is a bad deal for Barcelona and realistically the risk on this lending is extremely low. I can see how it is being positioned and it makes sense to put it in the best possible light.

However, finance doesn't work in a world of no recourse for the lender. The route taken makes it a more complex process for the lender, and the courts would have more broad discretion when applying enforcement but it could still happen.

An extreme hypothetical to illustrate: In 3 years time some kind of TV deal or other income stream is secured bringing in billions a year for Barcelona. Following their ethos of being mes que in club, they decide stadium income is largely unnecessary and offer seating at massively discounted or free for underprivileged supporters.

The idea that lenders would then have zero recourse to recover money is nonsensical. So in spite of this having no security and no influence on decision-making by the board there are still consequences to non payment and action that can be taken to recover money.
Click to expand...
So in other words, the loan for the stadium isn't secured by the stadium itself but potentially by everything the club owns, it's just that the bank won't get a preferred treatment to get this loan back compared to other loans.

Does anyone now who gave Barcelona their other major credits? If it's the bank same who gives them this loan they probably just don't care because if Barca don't pay back, they just can take all club assets.
 
DanH said:
They would just be an ordinary class of creditor. They haven't invested with a view of the share of the profits. It's a loan over a fixed-term with what looks like a pledge over a certain income flow.

Similar, but on a much larger scale to someone taking out an unsecured personal loan. No mortgage means action can't be taken directly against the asset and, in an insolvency process you would have no priority over other creditors and anyone with a valid security would sit ahead of you in terms of distribution of assets but you still have recourse through the courts.

An example for UK people is if an unsecured debt isn't paid as promised the lender can approach either the county court or high court and seek a judgment for payment. If the court agrees the monies are owed a judgment is granted on terms the court sees fit. If the debtor doesn't comply with the terms set by the court the lender can then apply for enforcement on the judgment debt. This can allow control of assets - things like bailiffs, arrestment of income, or -directly against property a charge being granted and potential order for sale.
Larger lending has more complex procedures but the principle is still the same.

The procedures in Spain are similar enough. I can find specific directives relating to unsecured lending later or tomorrow if you need them, and Spanish courts can also accept judgments gained in other jurisdictions and apply them as if they were Spanish judgments subject to certain provisos.

This isn't to say that this is a bad deal for Barcelona and realistically the risk on this lending is extremely low. I can see how it is being positioned and it makes sense to put it in the best possible light.

However, finance doesn't work in a world of no recourse for the lender. The route taken makes it a more complex process for the lender, and the courts would have more broad discretion when applying enforcement but it could still happen.

An extreme hypothetical to illustrate: In 3 years time some kind of TV deal or other income stream is secured bringing in billions a year for Barcelona. Following their ethos of being mes que in club, they decide stadium income is largely unnecessary and offer seating at massively discounted or free for underprivileged supporters.

The idea that lenders would then have zero recourse to recover money is nonsensical. So in spite of this having no security and no influence on decision-making by the board there are still consequences to non payment and action that can be taken to recover money.
Click to expand...

Thanks for the explanation.

I have a question. With the constitution of an FTA, does this matter change anything?

What role will InterMoney S.G.F.T play?

The idea of the club is the constitution of an Asset Securitization Fund (FTA) that will be managed by the aforementioned external company.
The fund in question will be the owner of all the income generated by the new Espai Barça until the total return of the borrowed money, with a basic condition: the first 100 million will be for the club, while the rest will go to the fund. Barça estimates that the new Espai Barça will generate about 347 million annually --176 kilos more than the current turnover--, although today the figure is only an approximation.

The strategy developed by Goldman Sachs and JP Morgan, with the participation of InterMoney as responsible for managing the FTA, proposes that this fund stays about 93 million annually to repay the loan, while everything that exceeds that amount will return to the club in the form of income.
 
stefan92 said:
So in other words, the loan for the stadium isn't secured by the stadium itself but potentially by everything the club owns, it's just that the bank won't get a preferred treatment to get this loan back compared to other loans.

Does anyone now who gave Barcelona their other major credits? If it's the bank same who gives them this loan they probably just don't care because if Barca don't pay back, they just can take all club assets.
Click to expand...

Barcelona the big loan to refinance short-term to long-term debt in the pandemic was with Goldman & Sachs. And yes, they also participate in this loan.
 
Niemans said:
Thanks for the explanation.

I have a question. With the constitution of an FTA, does this matter change anything?

What role will InterMoney S.G.F.T play?

The idea of the club is the constitution of an Asset Securitization Fund (FTA) that will be managed by the aforementioned external company.
The fund in question will be the owner of all the income generated by the new Espai Barça until the total return of the borrowed money, with a basic condition: the first 100 million will be for the club, while the rest will go to the fund. Barça estimates that the new Espai Barça will generate about 347 million annually --176 kilos more than the current turnover--, although today the figure is only an approximation.

The strategy developed by Goldman Sachs and JP Morgan, with the participation of InterMoney as responsible for managing the FTA, proposes that this fund stays about 93 million annually to repay the loan, while everything that exceeds that amount will return to the club in the form of income.
Click to expand...

It changes things a bit yeah. Basically the FTA gets an "absloute priority" over any revenue generated by the stadium above 100M, will pay all its creditors, and then will give the rest back to the club. It's a very powerful way to secure the loan because the club can't choose how it allocates its revenues from the stadium since it automatically goes to the regulated fund when it reaches 100M.

What it also means and what Romeu didn't explain is that :
- Barcelona HAD to renegociate their deal with pretty much any other creditor not included into the FTA because it lowered the amount of revenues that can be used to repay their debt (because another creditor has now priority a significant priority over a significant share of Barcelona's revenues) and any decently drafted contract will prevent that without the authorization of the creditor. And I doubt these negociations were favorable to Barcelona (they obviously weren't).
- These FTA deals set very precise targets the club will need to meet, otherwise any other asset owned by Barcelona will be up for grabs. What are these targets?
- If Barcelona is having a bad financial year, the fund is going to get the money it needs but all there other creditors will come with knives between their teeth.

So it's pretty much the same ol' same ol'. Barcelona took a huge gamble and it's going to be OK if every their revenue stream is normal, but they're f*cked if anything goes wrong.
 
Oly Francis said:
It changes things a bit yeah. Basically the FTA gets an "absloute priority" over any revenue generated by the stadium above 100M, will pay all its creditors, and then will give the rest back to the club. It's a very powerful way to secure the loan because the club can't choose how it allocates its revenues from the stadium since it automatically goes to the regulated fund when it reaches 100M.

What it also means and what Romeu didn't explain is that :
- Barcelona HAD to renegociate their deal with pretty much any other creditor not included into the FTA because it lowered the amount of revenues that can be used to repay their debt (because another creditor has now priority a significant priority over a significant share of Barcelona's revenues) and any decently drafted contract will prevent that without the authorization of the creditor. And I doubt these negociations were favorable to Barcelona (they obviously weren't).
- These FTA deals set very precise targets the club will need to meet, otherwise any other asset owned by Barcelona will be up for grabs. What are these targets?
- If Barcelona is having a bad financial year, the fund is going to get the money it needs but all there other creditors will come with knives between their teeth.

So it's pretty much the same ol' same ol'. Barcelona took a huge gamble and it's going to be OK if every their revenue stream is normal, but they're f*cked if anything goes wrong.
Click to expand...

Thanks for the explanation.

The debt that Barcelona has in loans is with Goldman&Sachs. They are involved in the FTA.

When Laporta became president of Barcelona, he had to request a loan to refinance the short-term and long-term debt.

- Goldman&Sachs loan of €595M to 1.98% interest to be paid in 10 years.

- With the second lever this summer, Goldman Sachs demanded to repay a part of that loan.
The debt was then at €470M.

- Barcelona also requested a bridge loan in 2019 of €90M to start with Espai Barça. In 2021 another credit of another €90M for the same reason. Both to Goldman & Sachs.
These €180M have been integrated into this €1,450M loan.

- Renewal of two credit policies that the club has in force with two banking entities, Caixabank and Banco Santander.
In the case of the policy with Caixabank, which expired on April 30, 2023, it is extended until April 30, 2026, with a maximum amount of 17 million euros. Regarding the Banco de Santander policy, which expired on May 15, 2023, it is also extended for three years, until May 15, 2026, with an amount of 32.5 million euros.

And as far as I know Barcelona has no more credits.

The club's debt last year.

- 1,045 million euros, which are divided as follows: 841 million in debts with banks, 193 million in debts with clubs and 12 million in early collections.

- At the treasury level, FC Barcelona closed the previous year with available cash of 378 million euros. This is because of the levers. And other clubs owe Barcelona 58 million euros.

Net Debt of €608M.

Of those €841M of debt with the banks, the club canceled the €180M of the bridge loan and €125M when the second lever was signed.

This is the information I have at this time.
 
Niemans said:
Thanks for the explanation.

I have a question. With the constitution of an FTA, does this matter change anything?

What role will InterMoney S.G.F.T play?

The idea of the club is the constitution of an Asset Securitization Fund (FTA) that will be managed by the aforementioned external company.
The fund in question will be the owner of all the income generated by the new Espai Barça until the total return of the borrowed money, with a basic condition: the first 100 million will be for the club, while the rest will go to the fund. Barça estimates that the new Espai Barça will generate about 347 million annually --176 kilos more than the current turnover--, although today the figure is only an approximation.

The strategy developed by Goldman Sachs and JP Morgan, with the participation of InterMoney as responsible for managing the FTA, proposes that this fund stays about 93 million annually to repay the loan, while everything that exceeds that amount will return to the club in the form of income.
Click to expand...

Oly Francis has already answered in more depth than I am able, but essentially it just removes some control from Barca about how they allocate funds. There is I guess some kind of risk if an exceptional cost arose for Barca. If they had control of that income they could potentially make a tactical decision to miss a payment on the stadium to cover a more urgent need. The structure means they don't have that option.

Again though, I don't mean to say these risks are realistic. I don't see a scenario where the figures could be so far off that you don't bring in at least the €194 million required to service the debt under those terms. Even in a situation like Covid Spanish law allows courts broad discretion in cases where truly exceptional circumstances apply. The actual risk is more on the upside - Barca have projected approx €350million per year if I recall correctly. Say it turns out only to be €300million - there is still enough coming in to more than cover the stadium debt, however, future growth prospects would be limited and there could be risks if they were otherwise leveraged.

I don't know enough about that kind of thing to comment though - the figures could be perfectly realistic or they could have allowed a reasonable margin of error in any calculations.

My only point is that there are always recourses for a lender so the wording of the statement was a little bit clever that's all.
 
DanH said:
Oly Francis has already answered in more depth than I am able, but essentially it just removes some control from Barca about how they allocate funds. There is I guess some kind of risk if an exceptional cost arose for Barca. If they had control of that income they could potentially make a tactical decision to miss a payment on the stadium to cover a more urgent need. The structure means they don't have that option.

Again though, I don't mean to say these risks are realistic. I don't see a scenario where the figures could be so far off that you don't bring in at least the €194 million required to service the debt under those terms. Even in a situation like Covid Spanish law allows courts broad discretion in cases where truly exceptional circumstances apply. The actual risk is more on the upside - Barca have projected approx €350million per year if I recall correctly. Say it turns out only to be €300million - there is still enough coming in to more than cover the stadium debt, however, future growth prospects would be limited and there could be risks if they were otherwise leveraged.

I don't know enough about that kind of thing to comment though - the figures could be perfectly realistic or they could have allowed a reasonable margin of error in any calculations.

My only point is that there are always recourses for a lender so the wording of the statement was a little bit clever that's all.
Click to expand...

To be honest, the very fine details our out of my range of expertise since these FTA structuring are only used in spain (we have smilar ways to structure deals but the spanish system is unique if you get into details).

But the statement is indeed misleading since, even if it's true that the stadium isn't mortgaged, it doesn't need to because the redirection of the stadium's revenues to the fund is such an powerful mean to get what the creditors are owed.

Basically, for regular folks who'd like a simpler explaination, what the fund is doing is that it directly takes the money from Barcelona's pocket. As if a banker would tell you "ok, I don't need your house as a collateral for your loan but every month, when you get your paycheck, you get to keep 100$, then you transfer the rest to me and if there's cash left once i've paid myself, i'll give it back to you. Also, the deal only works if you keep your job, otherwise I'll come for the rest of your assets."

Will it work for Barcelona? Yeah, probably, but that's a lot of money they lose control over.

Also, I have a very hard time with this sentence from the statement made by the club : " Since the payment is based on additional revenue, the returns do not affect ordinary management."

This is pure BS. Barcelona's stadium revenues pre-Covid were around 200M, and were roughliy 150 M last season (even if we don't know what they really define as "stadium revenues". So it's not "additionnal revenues" since they can only take 100M before transfering these stadium revenues to the fund's estate, it takes 50M more than their "non additionnal revenues" if you compare it to last season and 100M if you compare it to 2018/2019.
 
Niemans said:
The banks accepted (fixed rate, no guarantees outside of the money generated by the project, no collateral) because they are sure that there will not be the almost impossible case that Barcelona enters less than €100M per year. The expected with the new stadium is €350M+.
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Those €350M+ include the income generated by the new Palau, right?

I haven't followed this closely but I understood that the loan didn't specifically include funds for the construction of the new Palau although the board said the Palau is included.



If they really plan to cover the €400M for the construction of the new Palau with the €200M of the construction contingency, it mght not go as smoothly as planned.
 
FreckBarca said:
Those €350M+ include the income generated by the new Palau, right?

I haven't followed this closely but I understood that the loan didn't specifically include funds for the construction of the new Palau although the board said the Palau is included.



If they really plan to cover the €400M for the construction of the new Palau with the €200M of the construction contingency, it mght not go as smoothly as planned.
Click to expand...


I think the €350M is just from the football stadium.

In those €1,450M is not the new Palau. In the assembly of the members it was approved that the football stadium should be there and the new Palau had to be on that loan.

And as the directors of the club could not say that the Palau was not there, because they would not comply with what was agreed in the assembly. So they started with half-truths.

It is said that those €200M contingencies were an obligation of those who lent the money. If that's so, that money can't be touched until the new stadium is finished. Therefore the Palau would not be built until at least 3 years from now.
 
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