Domingos Soares de Oliveira, CEO of Benfica Group, addressed this Friday, in an interview with Benfica TV, several issues related to the financial health of the eagle emblem, ensuring that the issue of the bond loan of 40 million euros does not cause any type of “conditionality” of the embodied SAD having to transfer players at “any price”.
Asked about the need for sales, Domingos Soares de Oliveira said: “Benfica, like all Portuguese clubs and 90-95% of European clubs, depends on the sale of athletes. Whether or not you are in the Champions League, and to achieve a certain type of results, depends on the sale of athletes. This is if we want to have the capacity to invest in new athletes, to develop them and to achieve sporting performance at European level. If we looked only from a strictly national perspective, we could think of another type of player, but if we think of a European perspective to be able to support, like this year, with teams like Barcelona, Liverpool or Ajax, our ability investment depends on the sale of athletes. We are not conditioned to have to sell at any price.
Regarding the bond issue, the red leader explained: “There are two absolutely critical aspects for a saver, an investor, to invest in Benfica shares. The first is that we have a reputation for meeting all of our issuance obligations, ie paying interest and repayments on time. The second aspect is that in recent years, this is perhaps the year in which we have the most emissions. We decided to increase the rate to 4.6%. It’s a very attractive rate and I think for an investor it’s an excellent investment.
As for the financial health of the club, Domingos Soares Oliveira guaranteed: “Benfica, from the point of view of its cash flow conditions, has always shown great strength, and the fact is that we have to reimburse the emissions of 2019, which ended in 2022, and this reimbursement will only be done with our own means, we are not asking for additional funding. Then we have a set of obligations for the following year that relate to our expenditures and investments. Basically, here we depend on several sources of income, most of them are now quite stabilized, all that has to do with sponsorships and ticketing we know what we can expect for the next sports year and then we have two aspects which may be different. One is participation in the Champions League or the Europa League and the second is player transfers. The new bond issue responds to these two components, supporting our investment strategy and our bonds.
He added: “Through what has been the strategy for the past decade, we have managed to have a very strong equity position. In the last nine years, we have had a set of results produced by Benfica’s SAD that are in the region of 200 million euros. There were 200 million euros in profit, only last year we had a slight loss.”
Domingos Soares Oliveira believes in the positive results in this chapter: “Usually when you analyze a company, when you understand what criteria UEFA follows in terms of financial fair play, that is to say in terms of financial viability, the new name of the old fair play financial system, a specific year is never analyzed and the analysis is carried out over three years. From a three-year perspective, it’s perfectly acceptable for there to be a year that goes less well, so in our case, we’re in a position to have a positive result this year. It depends on market behavior until June 30. Any situation is fair, we believe it is possible to get a positive result, but it depends on the market.
Finally, when asked about the forensic audit, the embodied CEO assured: “It is worth summarizing what is on the table. In the ‘Red Card’ operation there were two issues that were not directly related to Benfica’s SAD and there was one in particular in which the public prosecutor asked us for three contracts and then another series of contracts . What it was decided to do, the newly elected board (in fact, the decision was even made before), was to produce a forensic audit with an entity that had never worked with Benfica. Ernst & Young was chosen, one of the big four auditors, which has never been our auditor.
There is a specific team. First of all, a forensic audit was carried out on the three contracts that motivated the “red card” operation, the results were presented, in internal terms, to the President of Benfica, to the legal officer of the Board of Directors of Benfica, to our auditors, to Mazars, to the presidents of the Supervisory Board and the Management Board of the General Meeting. A second decision was made to proceed with the same forensic audit for the other 48 contracts. These results will only be obtained in full at the end of the year. It is important to explain why this is happening. A forensic audit is an extremely complex process, a process that involves simple things like the analysis of contracts, relatively simple things like the financial movements made by Benfica, but then much more complex things like the diagram of the connections between the various actors in one or other of the various operations. This therefore implies that this company has a very significant geographical capillarity because it will have to analyze entities that are based in Lisbon, others in Brazil, in Africa or in Asia. Whenever a situation is identified in which Benfica’s SAD has been wronged, they will be guaranteed to act accordingly.”