FC Barcelona pauses €1.5 billion funding for Camp Nou stadium

FC Barcelona announce a €1.5bn fundraising

The deal was due to be priced late last week, one of the people said, but negotiations with private investors stalled as a spate of recent inflation data pushed US borrowing costs to 2007 levels.

The situation is “fast-paced” and Barcelona could soon opt for a new funding method that would fund the revamp of their Spotify Camp Nou stadium, according to another person briefed on the deal.

The Kroll Bond Rating Agency had given the club’s proposed private placement a preliminary rating of Triple B plus and a stable outlook on February 3, but later in the month downgraded it to Triple B, citing a revised financing structure involving a bank loan of EUR 200 million with a term of five years and five tranches of senior notes.

KBRA said two of the tranches are expected to be issued in US dollars and “swapped back into their euro equivalent”, giving the club more exposure to US interest rate movements. The club had previously planned to issue three equal tranches of €500m senior notes. The agency said the amendment “introduces additional refinancing and interest rate risks.”

Club sources said Barcelona are working to “optimize the terms and flexibility of the final funding structure” and still aim to have funding by their target at the end of March.

Wall Street investment bank Goldman Sachs is a long-standing partner of the club in stadium financing. JPMorgan and Key Capital are also working on the placement. They declined to comment.

The members-owned Catalan team are aiming for a renovation of the Camp Nou – a top priority for Barcelona president Joan Laporta, who was elected by the members in 2021 to lead a turnaround at the club to boost revenue and restore sporting success.

Barcelona are embroiled in a scandal over payments they made over several years to a former referee, José María Enríquez Negreira, who was a member of the Spanish Football Federation’s refereeing committee.

On Friday, Spanish prosecutors filed a formal complaint against the club and some of its former officials over alleged corruption linked to the payments. In a court document, prosecutors said the actions were aimed at “facilitating [FC Barcelona] in the referees’ decisions at club matches’. The club have previously said the payments were for reports on referees and youth players and have denied wrongdoing.

An official said: “The complaint hasn’t reached the club yet so we don’t know anything officially. The club will not issue an explanation until the complaint is received and reviewed by the Legal Department.”

The club haven’t won the Spanish LaLiga title since 2018/19. The Covid-19 pandemic wiped out ticket sales and left the club struggling to survive as debts matered, while high player salaries and expensive transfer commitments also weighed on the balance sheet.

It recorded a loss of 500 million euros after the 2020/21 season, a record for any football club. However, in 2021/22 it returned to profitability for the first time since before the pandemic.

According to the current annual report, the company had net debt of EUR 608 million at the end of June 2022. The number includes net debt for player transfers and other loans after deducting cash.

Football clubs, including arch-rivals Real Madrid, are modernizing their stadiums to increase revenue by turning them into multi-purpose arenas.