MADRID (Reuters) – Spain’s professional football clubs were hit by losses of 892 million euros during the 2020-21 as the COVID-19 pandemic ravaged ticket sales and player transactions, LaLiga announced on Tuesday.
It is the first time since 2012 that the Spanish league made a loss, although the organisation expects to fully recover in two seasons.
“The outlook for the current 2021-22 season is that it will be the start of the recovery, when we will get over the barrier of 4 billion euros in revenue,” LaLiga said in a statement.
The Spanish clubs recorded total revenues of 3.8 billion euros during the 2020-21 season, 24.1% less than the previous one that was also impacted, to a lesser extent, by the pandemic.
Half of the drop in revenue was due to a massive decline in player transfers. Spanish clubs invested only 547 million euros on players in 2020-21 compared to the 1.533 billion euros splashed out the season before.
Barcelona’s financial woes alone accounted for 56% of the league’s pre-tax net losses, according to a source close to the situation and to documents seen by Reuters.
Problems with the club’s financial restructuring process led to the resignation of president Josep Maria Bartomeu and his board. New Barcelona president Joan Laporta announced last August that the club’s debts totalled 1.35 billion euros, 673 million of which is owed to banks.
Since then they approved raising an additional 1.5 billion euros ($1.58 billion) to enable the club to renovate their Camp Nou stadium and its surroundings.
Goldman Sachs, which had agreed to lend 595 million euros to help restructure the club’s debt in August, will finance the stadium revamp under a 35-year plan, including an initial five-year grace period.
Barcelona are one of five clubs in the top two divisions to opt out of a 1.994 billion euro deal signed by LaLiga with private equity giant CVC Capital Partners in December, the first investment deal of its kind in a European league.
The agreement, dubbed “LaLiga Boost”, buys CVC an 8.2% stake in a new company that will get broadcasting revenues and sponsorship rights for 50 years.
It commits clubs to allocating 70% of funds for investment in new infrastructure projects while 15% can be used to sign players and the remaining 15% for reducing debt.
CVC is relying on Goldman Sachs to partially finance the operation, offering 850 million euros in notes due 2029 to back the investment, according to a document seen by Reuters.
“All these results were known to CVC before signing the agreement and they did so confident on LaLiga’s management of the situation for the coming years,” a LaLiga source told Reuters.
(Reporting by Corina Pons and Fernando Kallas in Madrid; editing by Martyn Herman)