FC Barcelona Finances

[Devils]

-Jaume Giro ( Giro is considered one of the most powerful people in European banking and an associate of Laporta). claims that Bar?a's real debt stands at 820 million euros. If we add to this the renovation of the stadium, it could reach 1.3 billion.

-Laporta suggested two solutions to get out of the club's financial squeeze:

1)Selling profitable bonds to investors, under the supervision of the National Monetary Center, to be returned in 2023.
2)Selling another copy of the bond to fans and club members from all over the world.


Interesting...basically make Barca public company temporarily and issue bonds until the finances can be recovered.

 

[khaled_a_d]

-Jaume Giro ( Giro is considered one of the most powerful people in European banking and an associate of Laporta). claims that Bar?a's real debt stands at 820 million euros. If we add to this the renovation of the stadium, it could reach 1.3 billion.

-Laporta suggested two solutions to get out of the club's financial squeeze:

1)Selling profitable bonds to investors, under the supervision of the National Monetary Center, to be returned in 2023.
2)Selling another copy of the bond to fans and club members from all over the world.


Interesting...basically make Barca public company temporarily and issue bonds until the finances can be recovered.

That is interesting.
Gotta say, Lapoeta campaign is slowly improving, his team seems solid too.

 

[Andresito]

Desperate times call for desperate measures. Big changes.

Will be hard juggling rebuilding the squad in this economy together with the new stadium, the question is, which is the most important?

 

[Laplacian]

This might be a dumb question, but why can't they just stop the stadium renovations? I'm pretty sure it hasn't even begun yet, right?

 

[FinBarcelonafan]

This might be a dumb question, but why can't they just stop the stadium renovations? I'm pretty sure it hasn't even begun yet, right?

It needs upgrade badly and it should increase revenues.

 

[Luftstalag14]

-Jaume Giro ( Giro is considered one of the most powerful people in European banking and an associate of Laporta). claims that Bar?a's real debt stands at 820 million euros. If we add to this the renovation of the stadium, it could reach 1.3 billion.

-Laporta suggested two solutions to get out of the club's financial squeeze:

1)Selling profitable bonds to investors, under the supervision of the National Monetary Center, to be returned in 2023.
2)Selling another copy of the bond to fans and club members from all over the world.


Interesting...basically make Barca public company temporarily and issue bonds until the finances can be recovered.

What does that mean, really though? How we are going to expect to return the bonds in merely two years, assuming they are talking about numbers in 200m or 300m etc., similar to what Juventus had?

Can anyone explain to me how bond works?

 

[behindbrowneyes]

What does that mean, really though? How we are going to expect to return the bonds in merely two years, assuming they are talking about numbers in 200m or 300m etc., similar to what Juventus had?

Can anyone explain to me how bond works?

https://www.investopedia.com/terms/b/bond.asp

 

[serghei]

The main advantage of bonds, based on some reading online, is that it's strictly a money-related affair. Basically, you buy them not to gain control in a company (which you can't do by owning them), but strictly to make a profit from either getting paid periodical interest payments or from selling on the bond to other people.

But it's still added debt to pay other more pressing debts. Basically, a means to buy time until covid ends, and the bonds will have to be paid out. 2023 seems quite a short time to commit to paying the bonds, with the uncertainty of covid still around.

 

[Luftstalag14]

The main advantage of bonds, based on some reading online, is that it's strictly a money-related affair. Basically, you buy them not to gain control in a company (which you can't do by owning them), but strictly to make a profit from either getting paid periodical interest payments or from selling on the bond to other people.

But it's still added debt to pay other more pressing debts. Basically, a means to buy time until covid ends, and the bonds will have to be paid out. 2023 seems quite a short time to commit to paying the bonds, with the uncertainty of covid still around.

Exactly. I don't know what the interest rate is for this sort of bonds but if it is pretty hefty, I don't see how it is better than bank loans (unless banks will not lend us any more money). Essentially just another source of loan, I guess. Either case we won't have much money at our disposal in 2 years to repay the bonds.

 

[Joan]

But it's still added debt to pay other more pressing debts.

Bonds are debt. It's a loan contract companies opt for when they don't fancy dealing with banks for reasons. Or banks won't give them money.

Might issue short term bonds to keep the rates low. Think they'd use it as a method of debt restructuring.

The last bit seems interesting to me.. selling bonds to fans around the world. Could they hope to sell overvalued bonds? Not sure it wouldn't be seen as fans pumping the money into the club and that can't stand, can it?

 

[Devils]

Exactly. I don't know what the interest rate is for this sort of bonds but if it is pretty hefty, I don't see how it is better than bank loans (unless banks will not lend us any more money). Essentially just another source of loan, I guess. Either case we won't have much money at our disposal in 2 years to repay the bonds.

-The interest rate would be lower than that of a bank loan
-Bank loans come with conditions (i.e. they will lend Barca XX million euros under the condition that Barca doesn't spend more than XX million over the fiscal year). Seeing as Barca would be the ones issuing the bonds, such conditions wouldn't be in place.

It's a super interesting model. I'm sure that many fans would even consider just buying some bonds for the sake of helping the club and receiving some profit in a few years time once the impact of covid is done.

 

[serghei]

-The interest rate would be lower than that of a bank loan
-Bank loans come with conditions (i.e. they will lend Barca XX million euros under the condition that Barca doesn't spend more than XX million over the fiscal year). Seeing as Barca would be the ones issuing the bonds, such conditions wouldn't be in place.

It's a super interesting model. I'm sure that many fans would even consider just buying some bonds for the sake of helping the club and receiving some profit in a few years time once the impact of covid is done.

For bonds to be credible and people to have trust, they need to be secured as well. I'm learning as I go here, but it seems unsecured bonds are a red flag. While secure bonds are fairly safe.

So Barca would need to secure them with some assets. Because everyone in the market knows Barca are facing economic problems. And we're talking about big assets here, of hundreds of millions.

 

[Luftstalag14]

Bonds are debt. It's a loan contract companies opt for when they don't fancy dealing with banks for reasons. Or banks won't give them money.

Might issue short term bonds to keep the rates low. Think they'd use it as a method of debt restructuring.

The last bit seems interesting to me.. selling bonds to fans around the world. Could they hope to sell overvalued bonds? Not sure it wouldn't be seen as fans pumping the money into the club and that can't stand, can it?

I might not be understanding you correctly here but how would the value of the bonds become an issue, in terms of being "overvalued" as you mentioned? Whoever wants to buy the bonds will decide how much they will purchase, whether it is 100 euros or 1000 euros or 10000 euros etc. and they will get all their money back plus interest when the bonds are matured, right?

 

[Joan]

I might not be understanding you correctly here but how would the value of the bonds become an issue, in terms of being "overvalued" as you mentioned? Whoever wants to buy the bonds will decide how much they will purchase, whether it is 100 euros or 1000 euros or 10000 euros etc. and they will get all their money back plus interest when the bonds are matured, right?

That's right assuming one holds the bond to the end. But bonds are publicly traded and their prices are determined on the market. Usually due to changes in interest rates. If rates fall, higer rate bonds will grow in value.

But if demand for a bond is high (due to reasons, for example Barca fans wanting to help the club out), its price would also rise.

 

[frog-fcb]

I wonder if they were to sell the bricks to rebuild the stadium how much money they could make. Say 30 euro per brick etc and get your name on it