- The uncertainty around TV rights weighs heavily on the future of the club. Losses are more marginal on other sources of revenue.
- Strongly affected by the March stock market crisis, the American investment fund King Street Capital Management, owner of the club, quickly got back on track and does not intend to disengage.
- At the sporting level, the consequences should not be significant since the situation was already complicated. Paulo Sousa left to stay in view of the current context.
Mystery and gumdrop. Many are now wondering how the Ligue 1 clubs will emerge from this historic health crisis and the confinement it has been causing for a month now. If they come out. One thing is certain, the next few months will be very complicated, especially for those who were already in financial difficulty such as the Girondins de Bordeaux.
After having lived a new season very behind the scenes with the total takeover of the American investment fund King Street Capital Management this winter, the management was preparing to appear next June before the DNCG (National Directorate of Management Control ) with a new heavy deficit, estimated between 25 and 30 million euros according to information from 20 Minutes. This was in any case the forecast before the spread of the new coronavirus. The note is bound to get heavier. But how much? And will the situation be that bad?
- What impact on club finances?
As the CEO of Girondins Frédéric Longuépée reminded a few days ago, the clubs "are facing a dramatic scissor effect, we have no more revenue and we bear a certain number of charges including the payroll. If the losses on marketing, hospitality and especially the ticket office should be on the sidelines since - even if the average attendance has increased a little compared to the previous seasons, the Atlantic Matmut is far from showing full since the beginning of the 2019/2020 season - they could be very important on TV rights and to a lesser extent partnerships.
Like Canal +, BeIN refuses to pay TV rights for Ligue 1 https://t.co/UhhCO1c1TS
- 20 Minutes (@ 20Minutes) April 2, 2020In the event of a permanent cessation of the championship and non-payment by the broadcasters (Canal + and Bein Sport) of their last two drafts, the shortfall would be around ten million euros for the Girondins. A hole. With regard to the partnerships, which represented six million euros in revenue last season, the situation is less worrying. If the suspension of contractual deadlines by Bistro Régent, the club's main sponsor, caused a stir, in reality its economic consequences are quite low. Indeed, the Bordeaux restaurant chain has signed a ten million euro contract over four years with the Marine Blancs. She must therefore pay between 1.4 and 2.5 million euros to the club each year depending on the sports results. For this season, she had already made eight of her ten transfers to the Girondins and therefore paid 80% of her partnership according to our information.
There remains the thorny question of charges and of course the payroll. On this subject, it is radio silence for the moment at the club: "We are awaiting the formalization by the Ministry of Labor of the agreement between the LFP and the players' union, the UNFP", explains an officer. Everyone is on partial unemployment. The perhaps reassuring point for Bordeaux on this issue is that if the ex-co-owner of the club announced last September an increase of 11 million euros in payroll, it was already taken into account in the forecast and above all had to be absorbed by the sharp drop in "other charges" which exploded last season (+17 million euros) according to the DNCG report due to the buyout of the Girondins in November 2018 (10 million 'financial costs) and the lifestyle of GACP members.
- What impact on King Street, the owner?
This is the other big unknown around the Girondins de Bordeaux: will the New York investment fund owning the club be strongly affected by the health crisis and can this have direct consequences on its commitment? "They had a lot of difficulties at the very beginning of the (stock market) crisis because none of their scenarios predicted such a sharp fall in the financial markets, explains one of their clients at 20 Minutes, they lost quite a bit of money with positions in petroleum but they quickly redirected their investments by turning to less risky sectors and with better visibility: gas, electricity, health… ”
Girondins de Bordeaux: “For them, it's an SME”… King Street, this mysterious owner https://t.co/nhJvGyvivQ via @ 20minutesBord pic.twitter.com/3jRubR5kzD
- 20minutesbordeaux (@ 20minutesbord) January 31, 2020A new strategy illustrated by a letter sent recently to various investors: "If they communicated, it was because they had a problem at one time, that there were rumors about large losses that they would have suffered, otherwise they would not have said anything. When you are sure of yourself, you do not speak, especially not in finance where everything is very secret. After the good news in quotes for them, it is that everyone is currently looking to borrow to save furniture, and is ready to do so at very attractive rates, ”continues this client. King Street Capital Management with its € 19 billion portfolio therefore remains a “solid shareholder” as Frédéric Longuépée often repeats.
A bankruptcy as some suggest is not at all relevant. A possible sale has so far never been discussed with the club's board of directors or at various club management meetings. On the other hand, the CEO of the club has issued the possibility of making new loans to temporarily relieve the cash while reassuring everyone: "Do not worry for the club".
- What impact on the sportsman?
In fact on this point the health crisis should not change much. Why ? Quite simply because even before this one the objective was already to continue to reduce the sail in the Girondins to fill the deficit of more than 50 million euros if we add up the last season and the current one. With a main goal, reduce the payroll and therefore the professional workforce (more than 40 professional contracts today). For that, it will be necessary to settle the situation of the fifteen or so players who will be at the end of the contract in a year.
If the balance of transfers shows a positive balance of nearly 45 million euros for this season (because the purchase of Rémi Oudin will be paid after June 30, 2020), the club had not planned to sell as much as the last summer at the next transfer window. The strategy was to retain 80% of the workforce, to obtain the extension of the contract of certain executives such as Nicolas De Préville and to have as an absolute priority, the recruitment of an attacker. Will this roadmap be questioned? There are chances.
This period of confinement may finally answer a question: Will Paulo Sousa still be there next season?
" I think so. The main idea is to stay. Afterwards, nobody knows what will happen to the club because the economic rules are very strict in France "- confides one of his relatives.
The Portuguese coach of the Girondins, who has gotten the idea of working with few means for the moment, would especially like the club to assume this austerity even if the objective remains to qualify as regularly as possible for the European qualifying stages. Finally, as the government is required to do with the French during this crisis, the Girondins will have to be even more transparent in the coming weeks to reassure supporters and partners.
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