As has been well documented over the past few seasons, Valencia CF have seen better days. A dismal 10th place finish in 2008 was followed by a respectable, but still disappointing 6th place finish in 2009. On the field, a love hate relationship with David Villa, spats with Quique Sánchez Flores, the epic flop of one Ronald Koeman and a resignation by former club president Juan Soler have turned Valencia into a real life telenovela, minus the beautiful Spanish debutantes.
With all of the trials and tribulations Valencia have faced on the pitch, their woes lie in the absolute Mount Everest of debt the club has racked up. In June 2008 the club was in the hole to the tune of EUR 502 million and was forced to stop construction on the New Mestalla in February, thanks to the bust of real-estate and construction markets in Spain. The club also fell behind on payments to David Villa and David Silva, Valencia’s biggest stars. The debt has forced the club to consider selling it’s new stadium for EUR 300 million to help repay it’s creditors.
To avoid administration, Valencia was forced to raise some serious capital, and turned to their loyal fans for support. According to VCF Chairman Tarsilo Piles, Valencia raised EUR 18 million by selling shares of the club to fans for EUR 48.05 a piece. Piles said “The interest of the foundation is to democratize the club so that we do not end up in the same situation as before and also so no one has a large enough piece to control the entire club.”
The largest assets to a majority of football clubs lie with it’s players and Valencia is no different. David Villa has been rumored to come with a EUR 60 million price tag, but recent reports say Villa will stay put in Valencia after the club looked absolutly ridiculous this off-season with a footballing version of ‘He Loves Me’ (we want him, we want him not, we wan’t him…).
Reports in May placed David Silva at around EUR 45 million when he was rumored to be heading to Anfield to reunite with former Valencia skipper, Rafa Benitez. At the same time, reports had Valencia offering a staggering GBP 135 million blockbuster deal to Manchester City for the duo. Yes, that was to Man City and it could have been for GPB 300 million the way the papers report it, but you get the idea.
The club could also look to offload highly touted Ever Banega, who never materialized at Valencia and was off on loan at Atletico Madrid until the start of this season. He was out of place his entire stay at the club. Valencia paid EUR 18 million for Banega back in 2008 and he quickly gained notoriety for his exploits in the homemade porno industry, or as Banega himself titled, Banega, Always Big (I’ll leave the intrepretation to you). Banega was set to go to Stuttgart for GBP 7.5 million, but a rough patch between Unai Emery and VP Fernando Gomez has seemed to derail the train for now.
A New Hope
Reports say Valencia have been approved for a new loan backed by the Generalitat, Valencia’s regional government, from Bancaja for 74 million euros that will be repaid from the proceeds of a further share sale. With the new influx of money, the club will rely heavily on season ticket holders to come through and renew. Valencia have always had a strong socio base and last season more than 9,000 renewed their season tickets even before the 2009 season came to a close.
Valencia will also need to cash in on their appearance in the newly formed Europa League. An impressive finish in the Europa League would leave the club with an influx of cash they can use to repay some of the club’s outstanding debt, and restructure for the future. Below is the rubric for $$ for the UEFA Europa League in 2009/2010. If Valencia rack up some wins and move on, they can have a significant amount of money into the club, as well as the increase in gate revenue for the Europa League matches at home and any shared gate during away matches.
UEFA Europa League 2009/2010:
1st qualifying round: 90.000 €
2nd qualifying round: 90.000 €
3rd qualifying round: 90.000 €
Playoffs: 90.000 €
Group stage: 1.000.000 €
Group match victory: 140.000 €
Group match draw: 70.000 €
1st knock out round: 200.000 €
2nd knock out round: 300.000 €
Quarter-finals: 400.000 €
Semi-finals: 700.000 €
Final: 2.000.000 €
Winning the final: 1.000.000 €
What do you think of the club’s future? Will ticket sales and selling shares keep the club’s head above water, or are they just avoiding the inevitable? Is there anyway else for the club to raise the necessary funds to avoid administration?