Football: Barcelona win bond waiver to help fix finances

Barcelona ran up nearly €100 million of losses last year.
Barcelona ran up nearly €100 million of losses last year.PHOTO: AFP

BARCELONA (BLOOMBERG) -Barcelona noteholders agreed to relax some debt terms, granting a measure of relief to the Spanish football giants as they grapple with a collapse in revenues caused by the pandemic.

A group of European investors in their €200 million (S$321.4 million) of senior notes will permit the club to remove limits on indebtedness and financial expenses, Barcelona's press office said in an e-mailed response to questions.

The decision provides Barcelona with some breathing space after pandemic lockdowns shut down the flow of revenue from match ticket sales. The club, laboring under a €488 million net debt pile, ran up nearly €100 million of losses last year.

The financial woes facing the Catalan sporting icon were a big reason why it enthusiastically backed a bid unveiled earlier this month to create a Super League of elite European clubs.

The project, which would have provided member teams with guaranteed revenues and a generous joining bonus, collapsed withing 48 hours of its launch amid withering criticism from politicians, players and fans.

Barcelona had disclosed that they were in talks with European noteholders when they published their annual financial report in late January. They said then that they already had received waivers from US holders of the debt.

In 2018, the club issued two series of five-year notes for a combined €140 million, paying 2 per cent interest. In 2019 they raised a further €60 million with two further offerings with interest at 2.5 per cent.

Barcelona's finances have deteriorated in recent years as costs for hiring star players and other expenses piled up. Their debt burden also has wider implications for the wider sphere of European football.

As of last June, the club owed €126 million in short-term debt to teams including Bordeaux and Liverpool. They had a further €197 million in long-term debt to other clubs.

In March, Joan Laporta was elected president of Barcelona, in part on a platform to clean up the club's finances. Laporta was previously president of the club between 2003 and 2010.

As part of their strategy to raise cash, the club earlier this year looked to sell a stake in a unit including digital assets, worldwide football academies, sports knowledge group and merchandising businesses.

Teasers for the stake sale were sent to potential investors by the previous club administration, and new management has not yet signaled publicly whether they will continue with the plan.