Barcelona to use € 100m bank loan to repay salaries
Barcelona president Joan Laporta has secured a loan from a U.S. investment bank that will allow him to use â¬ 100million ($ 122million) to settle outstanding debts owed to players, various sources told ESPN.
Laporta will be able to use a line of credit of up to â¬ 500m in total, ESPN sources say, but will only use â¬ 100m for the time being to pay salaries owed to the team since. January.
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Barca players receive a relatively low monthly salary, with most of their income covered in two installments – one paid in December or January and the other at the end of the season.
The coronavirus pandemic has accelerated Barca’s financial woes and allowed the club’s gross debt to rise to nearly â¬ 1.2 billion.
Since the start of the pandemic, Barca players have agreed to various measures to help, including a three-month pay cut last March and a payment deferral program earlier this season, but the club are still struggling to track payments.
Sources told ESPN that there was a real fear that if the club could not cover around 40% of the payroll owed in backdated payments, the matter could have been taken to the Spanish Football Association (AFE). . This could have led to potential sanctions for Barca, with a source therefore stressing the importance of the loan obtained by Laporta.
Barca’s annual report provided for a budget of 230 million euros to be paid in salaries to the first team for the 2020-21 season.
The first thing Laporta did after being elected president in March was to order an internal audit of the club’s finances.
That audit is still ongoing, but in the meantime a club source has confirmed that a more phased repayment plan has been agreed with some of the short-term debt note holders.
According to the club’s accounts, published in January, of the gross debt of â¬ 1.173 billion, â¬ 265 million was due to banks before June 30. Over â¬ 100m is also due in amortization on previous signings, in addition to what is owed to the players.
Barca had hoped that a â¬ 350million cash injection from the European Super League would ease their financial woes, but the collapse of the project forced them to seek other investment flows.
ESPN reported in April that Laporta was forced to step up its search for outside investment after plans to create a separatist competition failed.
The club have considered selling the naming rights to Camp Nou and there remains an option to sell a stake in Barca Corporate – a company that is home to Barca Academy, Barca Innovation Hub, Barca Licensing and Merchandising (BLM) and Barca Studios – but a source says the loan bought the club a while back.
Barca will still have to work to further cut payrolls and sell player contracts this summer, but sources told ESPN that Laporta continues to explore ways to make a statement by signing before next season to improve the chances of the team in La Liga and Champions League. .
the Blaugrana won the Copa del Rey this season but will finish outside the league’s top two for the first time since 2007-08. They were beaten in the knockout stages of the Champions League by Paris Saint-Germain.
Laporta is also working on a two-year deal with the option of a third year for Lionel Messi, who is out of contract in June, and has a decision to make on coach Ronald Koeman, sources telling ESPN that there were doubts about the future of the Dutchman.