First, just some numbers. Very few The remodeling of the Camp Nou will absorb, in the best of scenarios, 1,150 million euros. At worst, that is to say, in the event that the works become complicated, the total of 1,450 of the new debt that Barça has assumed for the project. For this reason, yesterday the club officials could not explain how they will undertake the works on the Palau Blaugrana.
The difference between these two amounts is explained in the budget, which saves up to an additional 240 million (200 according to the club) for contingencies in the construction works. This last item is key to understanding how the Espai Barça project is doing as a whole.
It is a guarantee that the investors have introduced in the financial plan, partly because of the complexity, but also because the Turkish company, Limak, which will be in charge of the macro work was not what they expected and its credentials were not they seem comparable to those of the other construction companies that lost the tender. With that decision, Joan Laporta limited his room for maneuver in exchange for a theoretically closed cost for the remodeling.
According to the final agreement reached between the investors, led by Goldman Sachs, and Barça, this money will be in Barça’s accounts, but it will only be able to have it in cash or invested in assets easily convertible into liquidity, as public debt. As a consolation, the club will have some additional income from the interest paid on this investment.
This situation will remain for at least four years, beyond the duration of the works at Camp Nou. They are the guarantee for the unexpected: delays, technical problems or any constructive alteration that puts the work at risk.
It is not so strange, since the club’s new creditors have no more security for their debt than the right to collect the additional income that the club generates from the renovated Camp Nou. If the works were derailed, took longer than planned or the cost went out of control, the financial plan would collapse. For this reason, they insure this cushion equivalent to more than 25% of the total expected cost of the entire remodeling.
But, obviously, this means that in the near future there will be no money from this credit to finance the construction of the Palau Blaugrana, with a cost estimated some time ago at around 420 million euros. The board undertook, and trustees and partners ratified it, not to take on debt above this 1,500 million for the entire Espai Barça, which included the multipurpose structure led by basketball.
Now he has to find a way to get it going without crossing that border. Well, it could lead to those same club forums, the assembly of trustees or the vote of all members, a new proposal that exceeded that number. But we must not forget that Espai Barça started with a projected cost of 600 million, in 2014. The president was Josep Maria Bartomeu, who replaced the resigned Sandro Rosell. In 2020, the former, repeating in office but as president-elect, raised it to 815 million. That is to say, in a decade it has risen by no less than 150%. But it seems that still won’t be enough. A long calendar dotted with resignations, confrontations, purges, political interference, motions of no confidence, changes of suppliers and renewals of the project.
The other alternative for the club would be to look for an investor who would undertake all or a very significant part of the works on the new Palau, depending on how the balance of the Camp Nou went, in exchange for this investor to keep another part or less than the future income of the Palace for a certain number of years. Formally, it could be argued that debt has not increased, but in return income would be reduced for a period. The board will have to decide what its option is to undertake this indefinite and substantial part of Espai Barça.
The club has been able to close the financing agreement keeping the Camp Nou without mortgages and without renouncing the current income in case there are complications. Investors have trusted the Barça brand and work with the conviction that the future will offer more leisure and recreational activities in large coliseums with multi-purpose possibilities. The Barcelona club offers good prospects in this wide area.
The extension of the Espai Barça launch process, since the distant 2014, highlights the management methods of the different boards that have followed each other since then. The increase in costs is the most visible part. Even in terms of the cost of debt, the interest rates, this hasn’t exactly been the best time to borrow in decades.
