After the state of emergency, Barcelona held its first general meeting on June 20, nearly a year and a half after the last one, and too many things have happened in these moments. The last General Assembly, the newly established "Prince" Russo unsuccessfully forced the palace, and five directors resigned together, a few months later, in the "Barcelona Gate" and "
Lionel Messi (1987-), Argentine footballer
Bartomeu, who has fallen deeper and deeper into the work of "leaving the team", has chosen to resign before the impeachment vote. This general meeting is not only a kind of summary of the Bartomeu era, but also the opening of a new era of Laporta.
Barcelona is a salon owned by its members, and the General Assembly is the highest administrative body of Barcelona, exercising effects that include the consideration of the budget, the review of the proposals of the Board of Directors to move forward, and the power to openly ask questions during the question session. This year's General Membership Meeting consisted of 4,457 eligible members, while 768 members participated in the meeting. Of the total of 11 topics, the most important were undoubtedly three: the economic debriefing of the previous Board of Directors, the specific explanations on the refinancing, and Laporta's statement on the UEFA Premier League.
Loss of $246 million for the 2020-21 season
After Laporta's opening speech, the first to take the stage was Bartomeu's board of directors' vice president of economy, Moishe, who previously served as vice president of the "Espacio Barcelona" program and became vice president of economy after the resignation of six directors last year. Moishe, who was the first to make a statement for the 2019-20 fiscal year, acknowledged the failure to handle the situation. "Obviously it's not a great result, nothing to be proud of. We readjusted salaries based on the situation (after the outbreak) and saved about 70 million euros. Is that enough? No, we could have done more. We didn't know how long the epidemic would last, and this was the weakest time for the economy since the civil war. The epidemic reduced revenues by more than 200 million, while we only reduced expenses by 60-70 million euros."
"We wanted to keep the money on the field and not in the bank, but we didn't take into account the impact of the epidemic. The epidemic had an impact of €100-120 million and is the main reason for the current situation. Did we do everything right? No, we didn't. We didn't anticipate the renewal of the salon, we didn't take care of the youth training during several years, although the situation changed with Ricky (Pudji), Ansu and Araujo." However, Moishe also mentioned some of his own achievements, including the promotion of the fair distribution of broadcasting rights, the excellence of the electronic world and the projects "Barcelona Inc." and "Barcelona Space". He also mentioned the fact that Barça was voted by Forbes magazine as the most valuable soccer club.
Prior to his participation in the Congress, Moishe indicated in an interview that his participation was more of a formality, but he did suffer trouble at the Congress. Several members who asked questions talked about the possibility of vetoing the settlement, in which case, according to Laporta, the salon would fall into organizational paralysis. "For the salon to return to normalcy, my board partners and I would vote in favor of it, and as a lawyer. I want to make sure that voting in favor does not mean that the previous board will be absolved of responsibility. We are not bound by the outcome of the vote." After being assured by LaPorta, 616 members voted in favor of the motion and the vote passed without incident.
This was followed by agreement on the FY 2020-21 budget. Moishe explained the October 26, 2020 version of the budget, and that one projected revenues of €828 million, expenses of €796 million, and a final net income of €1 million. However this does not correspond to the real situation. For example, the budget assumed that attendance in February could come to 25% and 50% in May, but in fact the attendance at Camp Nou for the entire season was 0. Similarly, with Laporta's support, this budget passed smoothly.
What's the status of Barcelona? We'll have to wait until later in the year to find out. At the next general meeting, Laporta's board of directors will announce the results of the current fiscal year, but it is clear that the figures will not be pretty. According to the charts presented by Vice-President of Economy Romeu at the meeting, this season's deficit will reach 246 million euros. In a previous interview with the Vanguard, Laporta said that the cost of salaries and amortization was as high as 650 million euros, which has now exceeded the salon's income for an entire year.
With $1.044 billion in debt, borrow another $525 million to save the day
After that the General Assembly smoothly approved the four new members of the Board of Directors, including the acceptance of the new Vice-President of the Economy, Romeu, and the members of the Economy Committee. The next item of business was the approval of the $525 million refinancing. Vice President of Economics Romeu clarified a number of issues, noting that the economic problems had occurred before the new crown epidemic. In response to the previous Board, he indicated that due diligence was underway in the areas of finance and sports and that a control audit mechanism would be put in place for sports remuneration.
Romeu then described the status of the salon's liabilities at the time, "Financial liabilities have increased from €159 million in June 2018 to 673 million in March 2021, with the sale of players adding 347 million, the 'Espacio Barcelona' project adding 100 million and other investments adding 45 million." Romeu said the total debt was €1.044 billion at the time and could be higher, with the additions mainly due to deferred sporting salaries and the 38 million season ticket fees paid by members last season, which were recorded as money owed to season ticket holders.
From this, Romeu introduced a €525 million refinancing package, which will be supplied by one or more organizations through Goldman Sachs and is targeted to be officially signed in August this year. First and foremost, €80 million of this will be used to repay the bridge loan, which was paid by Goldman Sachs to the salon in June to cover the payments that the salon will need to make over the next three months. In June 30, the salon needs to pay 75 million players transfer fee, 24 million tax and 57 million sports salary, Goldman Sachs supply the loan will help the salon to cope with these expenses.
In addition, the 200 million euros will help the salon to restructure its senior debt, so that it will not be tied up in debt. The remaining money will serve as the necessary liquidity for the salon to facilitate the preparation of strategic programs and maintain competitiveness in the next two years. The loan, which has a 15-year term and an interest rate of 3% in principle, is divided into two parts. In the first two years, Barcelona will only have to pay the interest, which is about 15 million euros per year, while from the third year onwards Barcelona will need to pay 50 million euros per year. Romeu is confident about the early repayment of the debt, "We are working with the assumption of 10 years, and the income from the UEFA Premier League and player sales will be rated."
How many years will it take for Barcelona's economy to recover? The chart shown by Romeu shows that this season's deficit will reach 246 million euros, while next season, revenues will increase from 621 million to 771 million with a small drop in overhead (from 867 million to 854 million). According to Radio RAC1, the salon trusts that it will take 3 years to reach a healthy economic level again, i.e. a debt in the range of 500-600 million euros.
As for the reasons for picking Goldman Sachs, Laporta explained that better terms were offered by some organizations, but because Goldman Sachs had a good reputation, the salon picked Goldman Sachs in the end. In addition, the board acknowledged that the loan could be used to terminate the contract with the player if necessary, and that the loan was secured by the salon's broadcasting rights for the next few years. Romeu accomplished a very superb speech, and the proposal was finally recognized.
Why should Barcelona be involved in the UEFA Super League?
After listening to the report of the member trustees, Laporta declared about the UEFA Premier League. Laporta accused UEFA of not only threatening but also rejecting dialogue, "We defended Barcelona's interests, but some officials broke our dreams. UEFA doesn't accept dialog, and although we don't understand why, we're still trying. We have more than 122 years of history and our ideas must be respected. We are just thinking about or organizing a competition without apologizing for wanting to be the masters of our own destiny in the soccer world. If we were clean according to the law, we wouldn't have to pay a fine."
Why participate in the European Super League? "With the UEFA Premier League, we are able to be the leading (not bad) salon. It is fortuitous that a salon owned by state capital is investing like never before and is offering twice the price for our favorite player (Wijnaldum)." Laporta believes that the UEFA Super League is also helping to increase the audience for soccer, "The audience for TV has been declining, and in France it has even halved. We want to maintain the financial sustainability of the salon and we want to organize the most attractive competitions in Europe." Another reason is the Solidarity Fund, where UEFA puts up 180 million to distribute to the 55 member associations, while the UEFA Premier League can put up 400 million. Laporta also cited basketball
European crown
and handball
European crown
As an example, it is stated that "we need to move forward, we need to make decisions".
However, Laporta emphasized that there will not be a vote on the UEFA Super League at the Congress because, although the tournament is still "alive", it is not yet mature enough. He also indicated that Barcelona still maintains ties with those salons that withdrew, and that if their agreement with UEFA is revoked, those salons will definitely return.
Regarding the UEFA Super League, the author would like to highlight that Barcelona and
Real Madrid soccer team
The uniqueness of the two member-based salons. First of all, the prevailing situation encouraged salons like Barcelona to find more sources of funding in order to compete fairly with the "newcomers" or to minimize the gap in financial strength. On the other hand, Barcelona's members didn't have to worry that the increased revenue wouldn't be used for the salon, which is the same as in some of the
England Premier Soccer League
Salon difference. In such a situation, the probability is that the proposal of the European Super League will be able to achieve a satisfactory amount of support in Barcelona. The members' questions about the European Super League are also based more on the premise of Barcelona's participation in the European Super League, such as how to get other salons to return, the referee's selection and pressure from organizations such as UEFA, and so on, rather than questions about participation in the European Super League.
In fact, the more than 700 members who participated played an important role in this meeting, and from their reactions we were able to understand what the members think about the salon. When Moishe was speaking, the Camp Nou booed loudly, and Laporta and the secretary of the board of directors, Cuvelis, had to ask for respect over and over again; while after Romeu finished his excellent speech, the venue was applauded. One member said that "Barcelona Gate" should be called "Bato Gate", which was also applauded by the members.
Undoubtedly, after this general meeting, we have a more accurate understanding of the current situation of Barcelona, but can the current board of directors accomplish what Laporta called "a glorious era"? I think, frank and open now means progress, but such progress is far from enough. Whether on the field or on the market, Barcelona's room for error is now very small.
