2023-10-02 07:45:09
BarcelonaAny reform of Barça’s stadium has had the pretext of increasing the club’s business volume. It happened when the Corts field was left behind to build the Camp Nou in the 50s, when Josep Lluís Núñez built the third stand in the 80s or when in 1994 he removed the moat to build more seats in the first stand. Joan Laporta, in his first stage, thought of the Foster project. And Sandro Rosell and Josep Maria Bartomeu laid the seed of what is today known as Espai Barça and which, after Laporta’s intervention, has begun to be built.
“Expired useful life” and “new business model” have been the concepts most used in the last decade to justify the remodeling of the coliseum. It was also considered starting from scratch and building a new stadium next to Diagonal, on the grounds of the University of Barcelona. But the idea fell through in 2012 when managers at the time convinced Sandro Rosell that the costs did not offset the benefits.
Finally, in 2014 the social mass approved in a referendum the Espai Barça project, which was to cost 600 million, to reform the Camp Nou, build a new Palau and the Johan Cruyff stadium. All of this had to give an extra 50 million per season, compared to what had been received until then. Over the years, the price went up, although the profitability of the project also increased. Always, according to the projections. In 2020, just before resigning, Bartomeu set up a loan with Goldman Sachs worth 825 million. However, as the ARA explained, this money would not have been sufficient to finish the entire reform and an extra investment would have been necessary.
Be that as it may, that Espai Barça promised 150 million more in revenue per season (in 2019, 161 were billed and forecasts predicted 304 once the works were finished). But Laporta redid the Camp Nou reform from top to bottom and the budget soared to 1.45 billion. Even if the profits did not do so in the same proportion: the expected annual performance is 346 million, only 37 more than the previous proposal.
The negotiation with Goldman Sachs, conditioned by the business volume of the new stadium
“Negotiating with Goldman Sachs was very hard, but we got an interest rate of 3.5% because the projection of extra profits was three times the capital to be returned,” explains an authorized voice of Bartomeu’s management. The club obtained the 825 million in exchange for returning 50 over 25 years. “The reports were key to being able to convince them. The most difficult part to explain was that of the museum, which went from 47 to almost 80 million in turnover. But between the historic number of visitors and consolidated tourism in Barcelona from 12 million per year, we gave enough support to the thesis.”
But Laporta’s return to the box office was a Copernican turn for the project. Bartomeu’s initial proposal envisaged building a ring of lodges vip between the first and second tiers, and increase the slope in the lower tier of the stadium, correcting a defect in the remodeling of 1994. As a result, up to 12,000 season ticket holders, those in the last rows, had to be collected place in the third This was the new board’s main argument for redoing the plans. And also “the deficiencies in the upper bleachers that advised to pull it down and make it completely new”, justified the new managers. But since with all the modifications the price skyrocketed, Laporta’s management team had to look for alternatives to sustain the business. Otherwise, it would have been unthinkable to get the funding.
Project cost forecast
Figures in millions of euros. In Bartomeu’s project, the final cost would have been higher because some games, such as the markers, were not counted. In Laporta, the construction of the new Palau Blaugrana is not included in the securitization fund
The ARA has had access to the income report of the two projects. The comparison shows how the boxes vip and the increase in turnover with tickets for the general public are the two pillars that support the reform that Laporta has finally carried out. But since the increase in the total price – which, in the securitization fund, does not guarantee the construction of the new Palau – was not proportional to the total profits, Goldman Sachs collared the leaders of the Blaugrana in the negotiation. The crisis resulting from the pandemic, the economic difficulties that Barça was experiencing and the increase in the price of materials as a result of the war in Ukraine did not make things easy for the Barça club. Finally, the average interest was 6.49%, twice as much, and the financial company reserved the right to intervene in the operation of the new stadium if, once completed, the performance was not as expected and, therefore, there had difficulty repaying the loan.
Seen from the street, there are no major differences between the Bartomeu and Laporta projects. But yes look from the inside. The current managers do not retouch the inclination of the first stand, except for some locations close to the grass. This keeps the 12,000 subscribers in place. In return, there is a double ring of boxes vip between the second and third grades. But even if the capacity of the boxes is doubled, the price is not multiplied by two. “Private boxes cannot be sold so expensively if they are not close to grass”, they admit from Espai Barça. Of the 22 million that were invoiced in 2019, the last normal year before covid, the previous board expected to enter 51 and the current projection reaches 76.5.
A stadium with more capacity, which will shoot up turnover between tickets, season tickets and ‘vip’ boxes
The new stadium will have more capacity, up to 105,281 spectators. But there will be almost one thousand (898) fewer seats for general sale. That’s because the vast majority of new seats will be vip (4,347) and Laporta plans to unlock 2,400 places on the season ticket waiting list. Even so, with the new sales techniques, with the Free Seat and the increase in prices, ticket sales will amount to 73 million (up until now they were 43). Laporta also improves the revenue for subscribers by four million, in relation to the discarded project. While the restoration must soar to 8 million, two more than those planned by the previous board.
Project revenue forecast
Figures in millions of euros. Current revenue data refers to 2019, the last year before the pandemic. The difference in percentage is between the Bartomeu and Laporta projects
The rest of the games (operation of the stadium with acts and events, parking and museum) have practically the same billing forecast. Excluding the sponsors, which Bartomeu expected to raise to 54.3 (including the naming rights and other sponsorships). Laporta projects seven less.
Only once the reform is finished and when Espai Barça is operating at full capacity, will it be possible to know if the predictions made by the Legends company, which played a key role in Laporta being able to convince Goldman Sachs, were right.
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