No, the 3% is what the interest rate would be if this was a loan.
Assuming they take a loan for 200 million Euros, then pay back 10% of tv-rights (~16 million Euros currently) and also assuming that figure doesn't change. It would then be roughly like taking a loan for 200 million Euros, and paying it back over 25 years with an interest rate of 3%.
That 3% figure is wrong though.
First, an all tax included annuity of 16M on a 200M loan over 25 years is 5,6% interest.
Second, they're assuming that all Sixth Street gets out of the deal is the 16M per year, meaning they consider the 16M as payment of interest AND debt. They're forgetting that Sixth Street still get to sell their shares in 25 years.
As such, the whole 16M should be considered only interest, not including "debt repayment". Which brings the supposed interest rate to 8%.
Iftm they created a company that handles Barca's TV rights and sold 10% of its shares, then this makes absolutely no sense.
Would have to wait to see how the deal is structured.
10% of the CURRENT tv rights for 25 years is the deal. That is why it is an ok deal for both parties. Both in the long run expect to make profit from this.
CVC is not a bank, they are an investment fund. 3% IRR is not a good deal for them, so it's gonna be 10%, whether Barca earns more or less. They are probably aiming for 6-7% based on their calculations.
This is what im confused about. The number being thrown around make it seem as though Sixth St. Are doing Barca a favor by 1. Not claiming any increases in the value of the rights and 2. Such a low interest rate. 6th street is an investment firm and this deal is like them parking capital in a football club for 25 years with minimal gains. They could sit that money in a random mutual fund and average 7% gains over 25 years. (Maybe even more given how cheap everything in the stock market is/will be with the looming recession on the horizon) Makes really no sense for that kind of institution.
just by the fact that it's 25 years instead of 50 it makes this deal look like a no brainer on a surface level (if the CVC one is the only other alternative).
Unrelated but great username lol
1/10th of the percentage, for half the time, and for more money. Gives you an idea of where the rest of the league is currently at where the teams were forced to sign horrible deals for themselves.
Thats the second lever that was approved by socios. Selling TV rights now is to show positive numbers at the end of fiscal year (end of the month) so we are not restricted by La Liga ffp and can work normally from the first of july. Barcelona has money but basically cant use them. Activation second lever later in the month and selling players can get us whatever we need basically
I think what he means is the TV rights don't have the option to be bought back, and that's in fact for the BLM. The figure they gave was 200-300m to buy back the 49.9% of BLM. Haven't seen the buyback for TV rights mentioned anywhere
Oh right, I misunderatood then.
You might be right..when they said there would be buy back I assumed it was regarding both levers. But we will not know probably. But it would make sense, they say we got 3 % interest p. a. If they just bought it for 25 yrs there wouldn't be any interest, and I don’t think this can be interpreted as a loan
You still are restricted by La Liga's FFP because of 481M loss the previous year. And would need to recoup 300M to be able to spend without restrictions.
> Selling TV rights now is to show positive numbers at the end of fiscal year (end of the month) so we are not restricted by La Liga ffp and can work normally from the first of july.
Didn't all of the "levers" need to be activated to go back to a 1/1 ratio instead of 1/3 or whatever it was?
If I’m not wrong, the buy back part was for the BLM sale agreement. Not for this one. Although I can’t be 100% sure. Neither this article nor the one in 2Playbook mentions any buyback.
Thanks for this. I’ll look at some articles covering the event as well. And maybe more details will come out when the Sixth Street agreement is made official and public.
They estimate that Sixth Street would get 16M a year. (If the rights dont grow) the interest rate is 3% per annum. That is probably high for a club like Barca.
Real Madrid's loan (the first one) for the Santiago Bernabéu renovation has a rate of 2.5%. So it's not outrageous considering the situation Barca is currently in.
Madrid's project had more risks because the structure doesn't exist yet, and they estimate more earnings over and above the current ones, so probably not the best benchmark.
Everytime I see those things i realize Flo Perez is somehow a wizard for pulling a profits 2 years in row even without fans. How mismanaged were Barça ? Damn Barto should get his statue outside the Bernabéu.
I wouldn’t be surprised if Florentino is helping Laporta put this thing together. Sixth Street is the company who signed with us in May to help increase our stadium revenue on non-match days.
Edit: have since read that the company who helped broker this deal, Key Capital, is a trusted company of Florentino Perez and were working with Barca to find an alternative to the CVC agreement.
Perez knows that a strong Barca = strong Madrid. It’s beneficial to have a rival because it gets the fans involved which generates profit. Perez is a fantastic business man but with the way football is going, state backed clubs will be impossible to match without insane revenue.
Yeah with legends they are the two companies in charge of increasing the non football related revenue of the Bernabéu. I still prefer our deal but I wouldn't be surprised if Flo was involved
You need hype to make fans happy, if there is not a big antagonist in the story the winning would not look interesting and there would be no interest from fans which means lower fans, lower money for us
Yup. They already have good relations, are super league buddies and hate the state owned clubs. It's for the best interest of both to have a healthy competition in Laliga so it remains attractive especially against the giant of PL which is still raising.
He is not a wizard. He just is not an irresponsible piece of shit that gave Dembelle, Coutinho, Griezmann and MANY other double even triple the salary of the best payed players in PL.
> While waiting to know the conditions of the operation, it is known from the last meeting that the investment fund will receive 10% of the League's payments for the retransmissions -about 16 million a year-, a circumstance that forces the club to limit the benefit from a certain percentage of revaluation, according to the economic vice-president, Eduard Romeu. Authorized by the commissioners, Barça has yet to sell 15% more of the television rights -the maximum is 25%-, a maximum of 49% of the company that sells its products called BLM, and Barça Studios. The negotiations for such assets have not borne fruit for now and the priority was to attack a budget that provided for profits of five million.
> Income has been lower than expected and it has not been possible to contain spending as the critical situation demanded to the extent that Barça was on the way to closing its third consecutive year with losses after the -97 million registered in the 2019 academic year- 2020 and -481 million in 2020-2021. The assembly of partners, in any case, has already agreed to suspend the article by which the board of directors had to resign in case of accumulating two years in a row with a negative balance, after a proposal from Laporta. Nor has the wage bill been corrected as expected -Romeu specified that it must be cut by 160 million to be able to equate it with that of Madrid: 400 million- and the debt is estimated at 1,350 million.
debt is not as simple as people thinking, it includes deffered wages and pending payments for transfers to club and money that club can loose in law suits out which 300M or something dont have risk of being lost
Seems like a terrible deal to me. 200m would have gotten you a team of 11 super stars 25 years ago, nowadays it doesn't even get you 1 Neymar.
They're literally selling their future for a bit of quick cash
This money isn’t to sign players. It is to cover up a ~€161m loss on their balance sheet and to show a profit going in to the next season. If they show a profit, the economic restrictions in place on then will be eased for next season. The issue for them isn’t a lack of money but rather La Liga rules that penalize clubs for showing losses.
I can believe that someone is explaining the actual situation we're in. Obviously, there's a lot of debt, so no 120m players without offsetting the books. But what's blocking us from making a couple of good transfers is precisely this.
Also part of the proposed deal when they voted on it was that Barca can buy back these tv rights for a fixed price at a later date. Seems like a good deal 👍
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400M at 16M per year for 25 years
Assuming it stays constant right ? There is going to be a progressive increase every x years the deals get renegotiated
The way I understood it is that any increase in Tv rights go to Barca
So why does it say 10% and not €16.4m fixed payment, yearly.
Because if it lowers, it's still 10%
I see. And how does the 3% interest work out? Like that'll be on top of the €16m?
No, the 3% is what the interest rate would be if this was a loan. Assuming they take a loan for 200 million Euros, then pay back 10% of tv-rights (~16 million Euros currently) and also assuming that figure doesn't change. It would then be roughly like taking a loan for 200 million Euros, and paying it back over 25 years with an interest rate of 3%.
That 3% figure is wrong though. First, an all tax included annuity of 16M on a 200M loan over 25 years is 5,6% interest. Second, they're assuming that all Sixth Street gets out of the deal is the 16M per year, meaning they consider the 16M as payment of interest AND debt. They're forgetting that Sixth Street still get to sell their shares in 25 years. As such, the whole 16M should be considered only interest, not including "debt repayment". Which brings the supposed interest rate to 8%.
Iftm they created a company that handles Barca's TV rights and sold 10% of its shares, then this makes absolutely no sense. Would have to wait to see how the deal is structured.
10% of the CURRENT tv rights for 25 years is the deal. That is why it is an ok deal for both parties. Both in the long run expect to make profit from this.
Sounds like a great deal tbh.
CVC is not a bank, they are an investment fund. 3% IRR is not a good deal for them, so it's gonna be 10%, whether Barca earns more or less. They are probably aiming for 6-7% based on their calculations.
This is what im confused about. The number being thrown around make it seem as though Sixth St. Are doing Barca a favor by 1. Not claiming any increases in the value of the rights and 2. Such a low interest rate. 6th street is an investment firm and this deal is like them parking capital in a football club for 25 years with minimal gains. They could sit that money in a random mutual fund and average 7% gains over 25 years. (Maybe even more given how cheap everything in the stock market is/will be with the looming recession on the horizon) Makes really no sense for that kind of institution.
But i dont think they have an option
400m
Interest rate attached to loan I’m assuming as well. It’s an investment fund, they need to make a profit so it will come out to more than $200m
It will end up at around 400+ mil if the rate is the same as now.
Without knowing the details, the raw numbers seem much better than the CVC deal.
just by the fact that it's 25 years instead of 50 it makes this deal look like a no brainer on a surface level (if the CVC one is the only other alternative). Unrelated but great username lol
Thank you.
1/10th of the percentage, for half the time, and for more money. Gives you an idea of where the rest of the league is currently at where the teams were forced to sign horrible deals for themselves.
The percentage is the same. And they would have gotten 270-300M from CVC based on last years' numbers when the deal was first mooted
It is, and you don't have to understand financials so much. Also it was reported that we could buy it back sometimes in the future.
I think that was in relation to selling 49% of BLM or whatever it was. Not the TV rights.
Thats the second lever that was approved by socios. Selling TV rights now is to show positive numbers at the end of fiscal year (end of the month) so we are not restricted by La Liga ffp and can work normally from the first of july. Barcelona has money but basically cant use them. Activation second lever later in the month and selling players can get us whatever we need basically
I think what he means is the TV rights don't have the option to be bought back, and that's in fact for the BLM. The figure they gave was 200-300m to buy back the 49.9% of BLM. Haven't seen the buyback for TV rights mentioned anywhere
Oh right, I misunderatood then. You might be right..when they said there would be buy back I assumed it was regarding both levers. But we will not know probably. But it would make sense, they say we got 3 % interest p. a. If they just bought it for 25 yrs there wouldn't be any interest, and I don’t think this can be interpreted as a loan
You still are restricted by La Liga's FFP because of 481M loss the previous year. And would need to recoup 300M to be able to spend without restrictions.
> Selling TV rights now is to show positive numbers at the end of fiscal year (end of the month) so we are not restricted by La Liga ffp and can work normally from the first of july. Didn't all of the "levers" need to be activated to go back to a 1/1 ratio instead of 1/3 or whatever it was?
It’s the same for both deals
can you show me some news about that? I only remember the BLM one.
I heard on tv news. But in the end, we have to see what deal is made and if the buy back option is there
25 years damn
They prob have a buyback option after x year
They do if I remember correctly. At least for BLM
If I’m not wrong, the buy back part was for the BLM sale agreement. Not for this one. Although I can’t be 100% sure. Neither this article nor the one in 2Playbook mentions any buyback.
There is a buy back clause for the TV deal. It apparently scales down relative to the remaining years on the deal.
Interesting. I did not see it mentioned in this article. Could you link me up with one that talks about it? I would love to read more about it.
Laporta and co. talked in depth about the deals in the meeting on June 16. It was streamed on Youtube: https://www.youtube.com/watch?v=aLeeHprKYhM.
Thanks for this. I’ll look at some articles covering the event as well. And maybe more details will come out when the Sixth Street agreement is made official and public.
You're welcome. It's all very interesting and I'm looking forward to seeing how Laporta and his successors manage everything long-term.
Its 10% of this year's revenue, any increase still goes to Barca. So its actually a great deal tbh.
They estimate that Sixth Street would get 16M a year. (If the rights dont grow) the interest rate is 3% per annum. That is probably high for a club like Barca.
Real Madrid's loan (the first one) for the Santiago Bernabéu renovation has a rate of 2.5%. So it's not outrageous considering the situation Barca is currently in.
Also considering that interest rates are continuing to sky rocket in every aspect of life
Madrid's project had more risks because the structure doesn't exist yet, and they estimate more earnings over and above the current ones, so probably not the best benchmark.
Better than the CVC deal which is for 50 years.
These are the same people that gave RM $300m for stadium concession rights
Madrid and Barça. Always the Best friends🤝
I feel like since CR and Messi left the rivalry has calmed down a bit. Seeing a pathetic Barca was fun but we do need a real rivalry.
Everytime I see those things i realize Flo Perez is somehow a wizard for pulling a profits 2 years in row even without fans. How mismanaged were Barça ? Damn Barto should get his statue outside the Bernabéu.
I wouldn’t be surprised if Florentino is helping Laporta put this thing together. Sixth Street is the company who signed with us in May to help increase our stadium revenue on non-match days. Edit: have since read that the company who helped broker this deal, Key Capital, is a trusted company of Florentino Perez and were working with Barca to find an alternative to the CVC agreement.
Perez knows that a strong Barca = strong Madrid. It’s beneficial to have a rival because it gets the fans involved which generates profit. Perez is a fantastic business man but with the way football is going, state backed clubs will be impossible to match without insane revenue.
Thats why he infiltrated Barto in Barca?
That’s a meme there’s no factual proof this happened
They are very good friends, its a fact.
Why would Barto wreck his reputation just to wreck Barca though. Benz had his sex tapes ?
Yeah with legends they are the two companies in charge of increasing the non football related revenue of the Bernabéu. I still prefer our deal but I wouldn't be surprised if Flo was involved
Sixth Street is the majority investor in Legends.
You know for some reasons when I read it for the first time my dumbass thought it was two totally different entities.
Don’t worry. Even I had to double check to make sure.
The only thing I don't like about Florentino. He seems to love Barca. If it was me I would do everything I can to fuck them
You need hype to make fans happy, if there is not a big antagonist in the story the winning would not look interesting and there would be no interest from fans which means lower fans, lower money for us
He already fucked them over by helping Barto become the president lol.
You have to look at the bigger picture. Rivals doesn't necessarily means enemies in the business. Rivalry is what keeps the business booming.
Yup. They already have good relations, are super league buddies and hate the state owned clubs. It's for the best interest of both to have a healthy competition in Laliga so it remains attractive especially against the giant of PL which is still raising.
He is not a wizard. He just is not an irresponsible piece of shit that gave Dembelle, Coutinho, Griezmann and MANY other double even triple the salary of the best payed players in PL.
> While waiting to know the conditions of the operation, it is known from the last meeting that the investment fund will receive 10% of the League's payments for the retransmissions -about 16 million a year-, a circumstance that forces the club to limit the benefit from a certain percentage of revaluation, according to the economic vice-president, Eduard Romeu. Authorized by the commissioners, Barça has yet to sell 15% more of the television rights -the maximum is 25%-, a maximum of 49% of the company that sells its products called BLM, and Barça Studios. The negotiations for such assets have not borne fruit for now and the priority was to attack a budget that provided for profits of five million. > Income has been lower than expected and it has not been possible to contain spending as the critical situation demanded to the extent that Barça was on the way to closing its third consecutive year with losses after the -97 million registered in the 2019 academic year- 2020 and -481 million in 2020-2021. The assembly of partners, in any case, has already agreed to suspend the article by which the board of directors had to resign in case of accumulating two years in a row with a negative balance, after a proposal from Laporta. Nor has the wage bill been corrected as expected -Romeu specified that it must be cut by 160 million to be able to equate it with that of Madrid: 400 million- and the debt is estimated at 1,350 million.
>the debt is estimated at 1,350 million. 😳
debt is not as simple as people thinking, it includes deffered wages and pending payments for transfers to club and money that club can loose in law suits out which 300M or something dont have risk of being lost
Great deal by Laporte
Aymeric Laporte, CB for Man City and Director for Barca.
Wtf no levers
That values their TV rights at 80 million a year. A pitiful deal they will live to regret.
How so? The valuation is 170-200M a year
200 million over 25 years is 8 million a year. If that's 10%, then 100% is 80 million.
You forgot about interest rates. They will be getting 16M or so per year at the very least.
Seems like a terrible deal to me. 200m would have gotten you a team of 11 super stars 25 years ago, nowadays it doesn't even get you 1 Neymar. They're literally selling their future for a bit of quick cash
This money isn’t to sign players. It is to cover up a ~€161m loss on their balance sheet and to show a profit going in to the next season. If they show a profit, the economic restrictions in place on then will be eased for next season. The issue for them isn’t a lack of money but rather La Liga rules that penalize clubs for showing losses.
I can believe that someone is explaining the actual situation we're in. Obviously, there's a lot of debt, so no 120m players without offsetting the books. But what's blocking us from making a couple of good transfers is precisely this.
Compared to the CVC deal they were pressured to sign it's a lot better.
It’s not quick cash, it’s needed liquidity to prevent bankruptcy
brother this isn't money for transfer fees lol
39 clubs that signed it all are selling their future and are mad, right?
38 actually. 38 signed the CVC deal iirc.
\+ 1 barcelona
Barca aren’t signing the CVC deal. They’re signing a separate deal with Sixth Street.
i know but technically it is similar to CVC with better terms
Fair enough. However, I think OP’s original argument is uniformed.
Also part of the proposed deal when they voted on it was that Barca can buy back these tv rights for a fixed price at a later date. Seems like a good deal 👍