Santander, BBVA, Soros and JP Morgan inject 600 million into Spanish football

13/09/2020 05:00

Ahead of

The Soccer League start again this weekend shrouded in the fog of uncertainty caused by the covid-19, which prevents knowing with certainty how the competition will develop. What the clubs are clear about is that the coronavirus has fully affected their financial health, so, according to sources close to the negotiations, they have had to resort to financing from national and foreign banks and investment funds to get urgent loans for more than 600 million euros.

The negotiations have been channeled by the Professional Football League (LFP), which as soon as the pandemic threatened the viability of the clubs launched a emergency plan to ensure the solvency of the competition and the teams. With the tournament stopped, no income, Javier Tebas, president of the LFP created a crisis committee to avoid defaults to the entities that had financed the First and Second Division clubs through the pledge of television rights.

Once the matches have resumed, and despite the fact that Telefónica faced the payment of the third subscription for broadcasting La Liga, the teams began to make calculations of the losses that they were going to register due to the absence of public in the stadiums and the fall of the sponsors, which led most of them to perform Records of Temporary Employment Regulation (ERTE) and lower the salary of footballers by an average of 20%, including those of Real Madrid and Fútbol Club Barcelona.

The new season returns with the sole assurance that revenues will drop considerably, which has led clubs to seek funding to ensure their viability. According to different sources, sports institutions have obtained around 600 million euros in the form of loans granted by Banco Santander, BBVA, CaixaBank, Bankia, Sabadell, Novo Banco and Caja Rural de Navarra. The top five awarded 100 million to Real Madrid and another 100 to FC Barcelona with a State guarantee through the ICO, as advanced by El Confidencial.

But especially by foreign banks and funds like the US JP Morgan, one of the largest in the world, and the Australian Macquarie Group, a giant who has carved a niche for himself in the Premier League by becoming a lender of the Leicester City, Sheffield United y Wolweshampton, and in the French, being a partner of the AS Monaco. The former is one of the two, along with Bank of America, which have financed the remodeling of the Santiago Bernabéu Stadium, with the granting of a loan of 575 million. But to date it had not entered into funding the clubs to maintain the squads.

Atlético de Madrid has received a loan of 60 million euros from a venture capital fund that had already financed it

Among the new lenders of Spanish football are also 23 Capital, who a year ago helped Barça to pay the 120 million rescission clause to Atlético de Madrid to sign Antoine Griezmann, and the ‘rojiblanco’ club to sign Joao Felix for 126 million from Benfica. According to different sources, the entity led by Miguel Angel Gil Marin has received an injection of about 60 million of this venture capital fund, which is also based in Barcelona. 23 Capital, which had a $ 1 billion fund supplied by the finance billionaire, George Soros, He had already lent money to Barça and Real Madrid before.

Other ‘lenders’, as they are known in financial slang, are the Spanish Gedesco, specialized in discounting promissory notes, Score Capital, SRG Capital e Internationales Bankhaus Bodensee, a German private bank that has already worked with Atlético de Madrid and usually charges interest rates between 7 and 8%. He Real Betis it has asked for some 40 million euros to finance its working capital.

To date, Spanish clubs have received financing of 1,900 million euros with the guarantee of audiovisual rights. The amount has multiplied by eleven since 2015. But despite this increase, there has been no default. Everyone is up to date, which shows the improvement in the management of the Santander League and the SmartBank League teams, thirty of which came to bankruptcy in the previous financial crisis.

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