The Assembly approves the mechanisms to refloat the Club's finances by a clear majority
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FC Barcelona received a very significant boost on Thursday thanks to the majority support from delegate members regarding the Board of Directors' proposals to ensure the Club returns to a sound financial footing. The virtual Extraordinary General Assembly approved by a clear majority to activate two financial mechanisms to obtain income estimated to be around 600 million euro from both operations. Needed to refloat the Club's finances, it will provide financial peace of mind with a return to positive equity, enabling the closure of the 2021/22 financial year in profit, and provide the possibility for the investments required to make Barça a competitive team.
The delegate members representing the fans have ratified by a clear majority to activate the cession of a minority stake (49.95%) in Barça Licensing & Merchandising (BLM), the company owned by FC Barcelona responsible for negotiating licences and merchandising, with 88% of votes in favour. 646 of the 671 accredited delegate members voted, with 568 (88%) voting YES, 65 (10%) voting NO, and 13 (2%) leaving their votes BLANK.
With respect to the third item on the agenda, majority support was also obtained regarding the approval to cede up to 25% of the income from the Liga TV rights to one or more investors and/or obtain financing based on the aforementioned TV rights. 494 of the 586 accredited members (87%) voted in favour, 62 (11%) against, with 13 (2%) leaving it blank.
A damaged F1 car that can win again
During the first item on the agenda, the President's Report, Joan Laporta used the simile of a single seat Formula 1 car to explain the evolving state of the Club's finances. Likening it to a F1 car that had run out of fuel with a seized engine given the inherited financial situation, the first financial measures that were applied (debt restructuring, reduction of the sporting wage bill, increased income) meant “we started the F1 car up, but it still couldn't move”, but now the Club needs to activate the BLM and TV rights 'levers' to “correct the finances earlier than forecast, obtaining positive equity, paying off the debt in a sustainable manner, and being able to make the investments required for our professional teams to be more competitive”. Continuing the simile, Laporta explained that the approvals mean “that the F1 car can leave the pits and return to the front row of the grid to compete and win again”.
Resources to be able to compete and overcome obstacles
The President, who thanked the Economic Committee for the reports in favour of activating the two ‘levers’, made a request to the delegates before the two votes. He asked members "to help us get out of the pit, because we are at the limit and not doing so will lead us to not be able to compete against state-run clubs and will not allow us to keep our independence and continue with our model of governance and ownership in the face of those who want to have us under guardianship and intervention.” He went on to insist that the club needs to "generate profits and have positive equity, and use these financial resources to overcome the obstacles that we are suffering repeatedly, systematically and obsessively."
Presentations by Vice Presidents Juli Guiu and Eduard Romeu
The vice-president of the Marketing Department at FC Barcelona, Juli Guiu, made a presentation of the agenda item dedicated to BLM and highlighted the strength and impact of this company, which has been and is a major source of revenue for the club, with great potential for improvement thanks to the strength of the Barça brand and the millions of fans around the world, and which has already shown a post-pandemic recovery thanks to the reactivation of tourism, the matches held in the stadium and the online sales through the club's e-commerce. Guiu explained that the club's intention is to be able to ally itself with "a partner with whom we can grow."
President Laporta reported that the valuation of the entire BLM company, calculated by an accredited company, is estimated at around 700 million euros and that the club expects to obtain “between 200 and 300 million euro for the transfer of this 49%, always maintaining a repurchase option."
"We can't make that kind of investment" he continued. "We want an investor to come in who must respect the identity and idiosyncrasy of the club. We turned down important offers because the investor wanted too much control of the business and we believe that the club must have the majority because it needs to be under our control. We can negotiate, but always keeping in mind that we must maintain a majority”.
Regarding the third item on the agenda, regarding the transfer of television rights, vice-president Eduard Romeu explained that the club earns 165 million euro a year thanks to this asset and that its sale supposes “a 5% maximum of the club's income, a percentage which we understand to be moderate and assumable that we can neutralise, and which we can buy back." The club expects to raise around €200 million for every 10% of its TV rights and "we have no plans for any operation lasting longer than 25 years."
Both President Laporta and vice-presidents Juli Guiu and Eduard Romeu then answered the questions from the delegates, received both in writing through the form on the website and made in person by renowned Barça members, such as former president Joan Gaspart, Enric Reyna, former director Josep Lluís Rovira and former candidate Josep Maria Minguella, as well as one from a member who spoke via webcam.
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