Benfica Faces Up to €15M Loss with Centralization, Acknowledges 'Friction' with US Investor

Nuno Catarino, Benfica's Vice-President and CFO of Benfica SAD, has warned that the club stands to lose money if the proposed centralization of TV rights proceeds in its current form.

“Based on the €220 million scenario put forth by the League, we're looking at a probable loss of €5 to €15 million [per season] for Benfica, depending on other variables. This is an unacceptable situation for us, which is why our approach has been constructive — as is our natural stance — but simultaneously assertive,” he explained in an interview with ECO.

Despite this, Catarino remains open to dialogue: “We recognize that for the majority of national clubs, this centralization presents a very complex situation. There are already five or six clubs that haven't been able to negotiate, or have received very low offers, because broadcasters are taking advantage of the situation. In 99 percent of decisions, what's good for Portuguese football is good for Benfica, and vice-versa. Therefore, we advocate for voluntary centralization, where clubs that wish to do so can aggregate to collectively secure better conditions. Benfica doesn't need this process to achieve favorable market conditions — but we acknowledge that for many other clubs, it makes perfect sense. The total TV revenue for the two seasons reaches €114.2 million if we include the dynamic stadium advertising retained by Benfica [€7.2 million for two seasons] and the BTV advertising exploitation contract [€2.4 million].”

The League is now targeting a value of €220 million to €225 million, a significant drop from the initially projected €300 million. “Benfica doesn't need centralization to enhance the value of its product. Therefore, a voluntary centralization or a postponement of the deadline itself would make much more sense, allowing time for the preparatory work to be completed,” he added.

Benfica's finance chief also affirmed that “the plan for €500 million in consolidated revenue,” a goal for Rui Costa's current presidential term, “allows for a much lower dependence on athlete transfer fees” than currently exists.

Another topic of the interview was Benfica's relationship with the American company Lenore Sports Partners (LSP), which currently controls over 5% of Benfica SAD, with a legal process underway. In May of last year, Benfica announced its intention to legally challenge the transfer of shares from Luís Filipe Vieira to LSP, asserting a right of first refusal: “We filed the request in court, but we haven't received a response yet. The process is ongoing. Lenore currently holds the shares, which were assigned to them by the Court. We submitted our request based on the right of first refusal. The Court, in its initial decision, allowed the process to proceed without addressing our request. Any qualified shareholder has a dialogue with us. As CFO, I have contact with them, and we know the people involved. It's not an institutional issue. It does create some friction, because the first thing we tell them is that this situation could still change.”

This Monday marks the launch of a €40 million bond issue, the first five-year bond in the club's history. “We are proceeding with a €40 million bond issue because we know we can pay the €50 million with current treasury funds,” explained Catarino, who ruled out the possibility of any of the incoming funds being allocated to professional football investment. “No. The transfer market is always managed independently of bond issues, and it wouldn't make sense for it to be otherwise.”