Barca will become a PLC?
- Thread starter Decanus
- Start date
Jadentheman
Active member
We are too big a club now. We spent a lot of money. I guess this is the answer to the league disparity.
DennyCrane
Senior Member
That would require a resolution of transformation and I doubt that the members will disempower themselves. Shareholder rights are way more limited than socio rights (if the representatives actually act in compliance with the statutes, that is). Also, this would be the epitome of hypocrisy considering how the board limited possibilities to become a member.
Anyway, where have you read this; can you provide a link ?
Edit: Scratch that, it may not even be up to the club to decide since the European Commission competition office have a pending investigation on Barca (and Real too) since both clubs have allegedly received illegal state aid, which the EC thinks is linked to their status as member-owned clubs.
So both clubs might be forced to change their legal status.
http://www.independent.co.uk/sport/...elona-face-removal-of-privileges-8749147.html
But if that happens, there's still the possibility to establish a PLC which manages the operational business but which would a be subsidiary company of the club and/or other owners. But that would still require the members to change the clubs' constitution and the question remains whether the EC would accept such pyramiding.
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DennyCrane
Senior Member
Well, generally speaking, a membership corporation is congenial to a PLC, but the main difference is the influence of members of the former and shareholders of the latter.
The clubs' constitution, which would be superfluous after a transformation to a PLC, allows for member influence even on non-essential issues.
Shareholders on the other hand are limited to the rights the legal framework provides: Only decisions that concern the structure of the PLC itself require a resolution by the general meeting, such as but not limited to increase/decrease of capital stock, stock financing, merger, squeeze-out, you name it.
For example, looking at the Qatar Foundation/airways deal, abstracting away from how this was handled in practice, would not be up for debate in a PLC. Such matters are included in the managing boards power of representation.
Generally speaking, it would be a shift of power from the members/shareholders to the board of directors.
The actual issue though is that such a transformation could be a 'door opener' for a wide array of procedures. The PLC might be willing to acquire funding from outside investment groups, hedge funds or single investors via capital increase and issue of shares and before you realise you have all the people you don't want in the loop.
The PLC might decide to become listed on the stock exchange: Acquiring funding almost immediately comes at the downside of having an army of small shareholders with no correlation to the sport division whose rights are executed via banks due to their stock-authority and the only thing they are interested in (which can be observed at every general meeting ever) is that the PLC invests aka takes loans.
Add to that that sports are not really a stable and sustainable business but with a high degree of vicissitude, so the probability to attract locusts is high.
The pyramiding I mentioned earlier can be a way out of this dilemma, depending on how it is executed. But it might as well be that the EC rejects a procedure like this and tries to force a direct transformation in which case Barca should take the matter to the CJEU.
On the other hand, as Catorce mentioned, Barca would have to pay higher property and corporation taxes due to losing non-profit status which only 4 clubs were allowed to keep 20 odd years ago.
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