Benfica’s CFO points to economic=financial and sporting balance and provides an update on the project.
Despite finishing third in the league, Benfica is still trying to secure a place in next season’s Champions League, but if they fail to do so, club officials admit that they will need to “make the necessary adjustments” to balance the books.
This isn’t the first time this has happened in history. For now, the scenario, obviously, is that we reach the Champions League. That’s the central scenario and that’s always what we work towards. In the unlikely event that something different happens = it has happened at Benfica in the past, and it happens at many other clubs = the necessary adjustments have to be made to guarantee Benfica’s economic, financial and sporting balance. But we will be here to do that work, assured Nuno Catarino, Benfica’s CFO, in an interview with BTV.
Regarding the €40 million bond issue , Nuno Catarino assured that it fits within the SAD’s financing strategy.
Until very recently, the SAD (Sporting SAD) had been regularly taking out annual loans for three years, that is, three lines of credit that were renewed every year, because the term is three years. We changed the strategy last year, we extended the terms. Last year, we issued a four-year loan, this year we are issuing a five=year loan, he stated, justifying this strategy with cost reduction.
The Benfica director also stressed that “bond issues are not a suitable tool” for attacking the transfer market.
In fact, the market is analyzed, the incoming market with the outgoing market, the team adjustment is made there. This has a lot to do with the company’s long=term financing strategy, which is the same as that of many other companies. If anyone checks, almost all companies have bond loans of all shapes and sizes, and those that don’t have other financing formats that are equivalent to bond loans. This has to do with the activity of a company that has 650 million in consolidated assets, on its balance sheet, has all its activity, and obviously has financing needs, which, in the case of Benfica, is met with a significant portion via bond loans, he said.
Nuno Catarino stated that Benfica has a plan to grow the club’s total revenue to 500 million, to reduce the weight, volume and needs for player sales
That’s been the strategy for at least a year now. The development of a company over five years, which is what we’re talking about, also happens in leaps. There are moments when there are leaps. When the Benfica District project is completed, there will be a leap. When a major contract is renewed, there will be another leap. It’s not a linear process, so to speak, of business growth, but we have the various initiatives quite well outlined. We know when we can expect them, and this evolution will happen in the medium term.”
Benfica District? We are still in the licensing phase.
Now, specifically regarding the Benfica District project, Nuno Catarino declined to give any predictions about when the works might begin.
“No major works are foreseen, or any works of any kind, within a year. We are always talking about a year’s timeframe for any works to begin, so much so that the next sporting season and subsequent seasons within the stadium will proceed as normal. From next year onwards, there will be some disruptions in the stadium’s surroundings, because that is due to the works. But, works, works, in a year you will be asking me in which month the works will begin, but it is not predictable, he assured. We are still in the licensing phase. The project was approved at the abstract level presented to the partners, that is, the macro project. We are in talks with the City Council, which is the licensing entity in several dimensions. At the moment we are talking to almost all departments, municipal companies, and this fieldwork is being done. We expect to have an answer regarding the licensing in the coming months. From there, we will further refine the projects, bringing on board potential operators to explore some of the different spaces, also in the model that we sought to explain in the explanatory meetings and the General Assembly. And then, perhaps in nine months, we will have the project finance, so to speak, then, yes, quite well defined. The concrete project, which is approved, will always have variations versus what is planned, and we will make adjustments, and then the process, the project, will continue normally. This is the plan, and it hasn’t changed from four months ago to now, he stressed.
More news can be expected in the first half of next year, without the stadium being affected by the project’s evolution.
“There will be some access restrictions, but we’re talking about that a lot. Regarding the operation, or the activities of the different sports, and some activities that take place outside the stadium, there will obviously be changes. We are looking for spaces where our teams can play, we are finding alternatives, and there will be two seasons with some upheaval, which is the part where we are rebuilding, for the better, the entire sporting aspect. There, yes, there will be an impact, as we have already explained. But it has been a bit like this: Benfica will always play in its stadium, people will always be able to come and see its men’s football game, we will also have women’s football games again = and we will surely have more and more. That normally happens, the activity inside the stadium. Outside, we will have restrictions,” he admitted.