BARCELONA: La Liga champions FC Barcelona have taken an unusual route for European football clubs when it comes to gaining income by securing loans from two of USA’s top venture capital firms, Spanish news agency El Pais reports.
Prudential-owned Pricoa Capital Group have invested 90 million euros ($101.4 million), while Barings have contributed with 50 million euros ($56.6 million) to the club in the form of loans which do not have to be paid for the next five years. Post that, FC Barcelona President Josep Maria Bartomeu claims that the investment will be returned on an interest rate below 1.8%, a figure estimated by market sources in Spain.
The placement has been made without any debt rating entity having given a rating to the club and without having to present guarantees in case the payment commitments are not met.
Bartomeu told El Pais that the motive behind Barcelona’s uncharacteristic approach for raising funds through debt is due to the fact that the Americans have superior knowledge in financing sports stadiums for example and their experience in the sports business globally is unmatched. The funds are an emergency relief in case of the club’s need for transferring funds.
He denied that these funds will be used for its reported €600 million ($680 million) renovation costs required to upgrade Camp Nou and its surrounding areas into a sports, lifestyle and entertainment complex. Goldman Sachs, the global financial company, will be assisting the club in this regard and is likely to gain naming rights for the same by the time the project ends in 2023.
The club ended 2017-18 with a record €914 million (US$1.03 billion) in revenues but more than €500 million (US$564 million) of that was spent on player wages. With net debt rising to €160 million ($180 million), the development is being looked at as a way to spread out the costs.
It also bears noting that FC Barcelona was keen to play a friendly match in the USA with Girona FC as part of La Liga’s 15-year deal with USA’s Relevent Sports and Entertainment that was signed last year. However, that plan was cancelled on opposition from rivals Real Madrid, the Spanish Players’ Association and FIFA.
