Fiscal bailout for Spain, Scotland clubs



Linkedin Twitter

Scottish and Spanish clubs benefit from funding Image: MJR Group Ltd./Coliseum & Aberdeen FC

A €67m (£61.5m/$81.2m) loan has been secured by LaLiga, the organizing body of the top two divisions of Spanish club football. The money will be distributed to 11 clubs facing financial distress as COVID-19 continues to bludgeon the world.

In what it claims is one of the first major loans to a top European league, LaLiga has selected UK financial services company Rights & Media Funding Limited to lend the funds under identical five-year terms.

LaLiga worked with independent financial services provider JB Capital and Perez Llorca, a Spanish law firm, to invite lenders to participate in negotiations to deliver funding to strengthen the liquidity of clubs in the second tier Segunda División, as well as those promoted to LaLiga for the 2020-21 season.

No details were given about the clubs involved but media reports stated that Segunda División teams and two LaLiga outfits will be receiving capital injection.

The identity of the clubs involved was not revealed, but Spanish news agency EFE said those receiving aid will be nine Segunda División teams and two LaLiga outfits. The Spanish football club based in Huesca (Spain), SD Huesca, the professional football club Cádiz CF based in Cádiz, Spain, and the Spanish football team Elche CF based in Elx (Spain) won promotion to the top tier last season. LaLiga reportedly received applications from between 15 and 20 investment funds and international banks, including those based in the US, UK and Germany.

Spanish football has mainly been a closed door affair as coronavirus continues its seesaw in Spain. LaLiga returned to action on June 11th with matches held behind closed doors and a clear picture has still not emerged as to when fans will be greeted back to stadia.

LaLiga said the loan project was launched to provide clubs with a tool to help them overcome their pecuniary problems in the context of the exceptional circumstances caused by COVID-19. LaLiga has facilitated the access of interested clubs to what it states is an innovative financing tool that will make it possible to meet the liquidity needs of participating teams, optimize their financial conditions and bolster their capital structure.

For the 11 clubs involved it is the first time they have jointly entered the financing market, while the venture is the first instance clubs of their stature have been able to secure financial terms of this kind, particularly with regard to the five-year agreement.

Asserted Jose Guerra, LaLiga General Managing Director, “Securing this type of loan is clear evidence of the financial stability and confidence in the future of Spanish clubs and LaLiga. This transaction opens a door to a new financing channel in which clubs can enter the market in a coordinated manner, obtaining a more solid structure and, therefore, more attractive financing conditions.”

Rights & Media Funding, a well-known and respected lender to LaLiga clubs, has been selected as the sole lender. The financing structure is based on the monetization of the media rights marketed by LaLiga and has duration beyond the current domestic rights contract.
 

Scottish funding

Scotland’s Sports Minister Joe FitzPatrick recently announced a £55m (€60.3m/$73.1m) emergency sports funding package to help sports clubs overcome financial woes due to lost ticketing revenue caused by the COVID-19 curse.

The funding will include grants and low-interest loans, with £30m to be provided across all levels of Scottish football and £20m to Scottish Rugby. Further funding will be made available for basketball (£300,000), netball (£100,000), motorsport (£400,000), horse racing (£2m) and ice hockey (£200,000), as well as £2m for ice rinks to support the country’s curling programs and recreational and professional skating.

Of the £55m package, £20m in loan funding will be provided to the top-tier Scottish Premiership and £10m in grants for all other levels below the Premiership, including non-league and women’s football. The £20m set aside for Scottish rugby will comprise £15m in grants and £5m in loan funding.

The funding package is in addition to Sportscotland’s (the country’s national agency for sports) £1.5m COVID Recovery Support Fund. The agency has teamed up with the Scottish Government to loosen the criteria for its £32m planned annual investment for the sports sector during the pandemic to allow sports organizations to protect 1,600 jobs. Sportscotland helps to fund sports clubs across the country as well as governing bodies.

Details of the package have been announced after the UK Government in November confirmed a £300m cash injection for “major spectator sports” in England, although elite men’s football and cricket was excluded. The Sports Winter Survival Package is designed to support sports through the winter period, with the funding to be largely composed of loans.

Stated Fitzpatrick, “I am pleased to announce this substantial funding package, which will help to ensure those sports which have been worst affected by the loss of ticket revenue during the pandemic are able to bridge the gap in revenue until spectators are able to return safely to sports events in larger numbers.”

“While restrictions on supporters at events have been vital in stopping the spread of the virus and saving lives, there can be no doubt that they have created real hardships for many sports clubs. These clubs are at the heart of our communities and, without urgent financial support, the survival of some could be in question. I’m delighted that we are able to provide significantly more support than the Barnett consequential funding received from the UK Government Sports Winter Survival package,” the Sports Minister added.

“I recognize that for football in particular, governing bodies, clubs and, of course, supporters themselves are desperate to see fans back as soon as possible. Sport brings great enjoyment to the many people who watch and play, and we don’t want supporters to be delayed in returning to stadiums for any longer than is absolutely necessary,” he further stated.

Stewart Harris, Chief Executive, Sportscotland, added, “This announcement is very welcome as the funding will help protect the immediate future of many clubs over the coming months. We will continue to work with a range of Scottish Governing Bodies of Sport and the Scottish Government to prioritize this funding to ensure the survival of the sports at the heart of our communities. With the roll out of the vaccine this week there is real hope that we are beginning to see our way out of this pandemic, and we need to make certain that sport is in a good place and is a prominent part of the overall recovery plan.”

Continue to follow Coliseum for latest updates on venues business news. Coliseum is dedicated towards building the best global community of sports and entertainment venue executives and professionals creating better and more profitable venues.

Become a member of the only Global Sports Venue Alliance and connect with stadiums, arenas and experts from around the world. Apply for membership at coliseum-online.com/alliance and make use of the 365Coliseum Business.

Watch 150 member-exclusive videos with valuable tips for your venue



« Previous News:
» Next News:



More News

Washington Capital One Arena prepares fans for return

US venue shoot the works for fans’ safety

Published: April 19th, 2021

The Office of the D.C. Mayor, D.C. Department of Homeland Security and Emergency Management Agency,... » Read more

Costa Rica Liga Deportiva Alajuelense new stadium

‘The Lions’ may roar in new venue by 2025

Published: April 19th, 2021

The Costa Rican multisport club Liga Deportiva Alajuelense unbolted plans for its new stadium... » Read more

Gruenwalder Stadion update April 2021

Is Grünwalder Stadium expansion imminent?

Published: April 19th, 2021

A decision is likely to be taken in May or June as regards the expansion of the iconic Grünwalder... » Read more

Miami Dolphins partners with Zudy

‘The Phins’-Zudy deal to ensure safe ingress

Published: April 19th, 2021

The National Football League (NFL) team Miami Dolphins (US) recently announced an innovative... » Read more


Receive global sports venue NEWS twice a week in your inbox