FC Barcelona is getting back on track thanks to fans returning to matches, asset sales and some clever financial manoeuvring.
A year ago, the Spanish soccer team was suffering big financial losses and was considered technically bankrupt.
On Thursday, announcing its results for the year ending June 2022, Barça reported a profit of $111 million on revenue of US$1.15 billion (average exchange rate for the fiscal year: 1 euro = $1.128 U.S. dollars). Even without the sale of 10% of its men’s team’s La Liga matches, which added $300 million to the top line, revenue would have been $846 million, which would have surpassed the previous year by US$134 million.
The team got a post-Covid boost with a US$148 million (or 415%) increase in revenue from its stadium and other facilities, such as tickets and concessions, back to pre-pandemic levels.
The balance sheet also improved. In August 2021, Barcelona Club got a euro 595 million 10-year loan through Goldman Sachs to transform its debt from short term to long term (and also to increment it), of which euro 140 million was a renegotiation of the team’s previous debt that that brought interest rates on the debt from 6.5% to below 2%.
Also, Barcelona noteholders agreed to relax some debt terms, granting a measure of relief to the Spanish soccer giant as it grapples with a collapse in revenues caused by the pandemic. Debt covenants were included in our previous agreements with financial noteholders, but are not included in the current loans.
Barcelona is negotiating to borrow euro 1.5 billion from Goldman Sachs to finance the redevelopment of its stadium, Camp Nou.
Net debt (debt less cash) fell to $US686 million in 2022 from $769 million the prior year. FC Barcelona noteholders agreed to relax some debt terms, granting a measure of relief to the Serie A team as it grapples with a collapse in revenues caused by the pandemic. As of June, 2022, Barcelona had a negative net worth of euro 353 million versus euro 451 million a year earlier.
For the 2022-23 fiscal year, Barcelona expects revenue and profits to be $1.26 billion and $274 million (based on current exchange rate: 1 euro = $1 U.S. dollar), respectively, thanks to the sale of another 15% of its television rights for euro 400 million and the sale of a 49% of a subsidiary of Barça Studios, which includes the new digital content such as NFTs, Metaverse or tokens, which has been sold equally in two parts to Socios.com (24,5%) and Orpheus Media (24,5%) for an aggregated amount of euro 200 million Even without these one-time sales the team believes its revenue would increase by euro 105 million due to an increase in proceeds from sponsorshps, like Spotify.
There is still work to be done, but Barcelona is headed in the right direction. Forbes valued Barcelona at US$5.1 billion in May, second among soccer teams to Real Madrid.