Barcelona: economist warns members could lose control of club after Goldman-Sachs deal
Leading economist Marc Ciria has painted a bleak picture for Barcelona, warning a €800mn loan deal with Goldman Sachs could lead to members losing majority control of the club.
FC Barcelona’s finances are in an alarming state which could lead to members losing control of the club, a leading economist has warned.
In an interview with Spanish news agency EFE, Marc Ciria, founding partner and CEO of Diagonal Investments who in 2015 was the financial manager of Joan Laporta's presidential candidacy, has painted a bleak financial picture for Barcelona, in which he highlighted the Espai Barça project to remodel Camp Nou would not go ahead as planned.
"The club is using the 30-year debt for Espai Barça, the final cost of which the club is clearly inflating, to pay wages for this year. And Goldman Sachs is fine with that because it is charging interest of between 3 and 4%. And if Barcelona doesn’t pay it, Goldman will come knocking,” said Ciria.
“The question is how the non-payment of the debt will be executed: With the club's assets? With the stadium? Because when there is a loan from an investment bank, the clauses are much firmer than those of a traditional bank.
“The board needs to do what it is doing to fix the numbers before leaving and they don't care about Espai Barça because they won't be the ones to undertake it.”
He added: “The next board of directors will not be able to develop Espai Barça with this loan. It will need other financing and the project will have to be converted into something much cheaper, which will consist of refurbishing the stadium. And for 10 or 15 years the club will not be able to consider building the Nou Palau Blaugrana and the rest of the infrastructure.”
Ciria: Coronavirus pandemic not to blame for Barça financial woes
According to Ciria, “Covid-19 has nothing to do with Barcelona’s financial situation. It is a lie of the board of directors, which claims that a club that will bill €700 million is in debt with €1.6 billion. This is unpayable under the current mechanisms of the club.
“The two viable solutions proposed by this current directive are the conversion of the club into a public limited sports company or the entry of an international investment fund that would leave the membership as the owner of 30 or 40 percent of Barcelona.”
Ciria warns against Barcelona-Goldman deal
Regarding the investment fund option, the economist warns of the danger of signing the €800 million loan with Goldman Sachs which the board under current president Josep Bartomeu is ready to approve.
“Goldman Sachs is not known for lending money, but for making entry operations in companies to then later get out of them by reselling the shares it has bought,” he told EFE.
“It is an investment bank, not a money-lending bank like La Caixa or BBVA (Spanish banks). The appearance of Goldman Sachs means that Barcelona has not been able to go to national institutions to increase its debt. The reason is obvious: the club already owes them almost €500 million in short-term debt.”