Domingos Soares de Oliveira, CEO of the Benfica Group, addressed this Friday, in an interview with Benfica TV, several issues related to the financial health of the eagle emblem, guaranteeing that the issuance of the bond loan of 40 million euros does not cause any type of «conditionality» of the incarnate SAD having to transfer players at «any price».
Asked about the need for sales, Domingos Soares de Oliveira stated: “Benfica, like all Portuguese clubs and 90 to 95 percent of European clubs, depends on the sale of athletes. Whether or not you are in the Champions League, and in order to achieve a certain type of results, it depends on the sale of athletes. This if we want to have the ability to invest in new athletes, to develop them and achieve sporting performance at European level. If we were looking 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 shoulder, as this year, with teams like Barcelona, Liverpool or Ajax, our investment capacity depends on the sale of athletes. We are not conditioned to have to sell at any price.”
In relation to the bond loan, the red leader explained: “There are two absolutely critical aspects for a saver, an investor, to invest in Benfica’s shares. The first is that we have a track record of complying with all our obligations in terms of issuance, 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 highest emission. We decided to raise the rate to 4.6 percent. It is a very attractive rate and I think for an investor, this is 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 2019 issues, which ended in 2022, and this reimbursement will only be made with own means, we do not ask for additional funding. Then we have a set of obligations for the next year that have to do with our expenditure and in relation to our investment. Basically, here, we depend on several sources of revenue, most of them are now quite stabilized, everything 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 that can be different. One is participation in the Champions League or Europa League and the second has to do with player transfers. The new bond loan addresses these two components, supporting our investment strategy and our bonds.”
He added: “As a result of what has been the strategy of the last decade, we managed to have a very strong equity situation. 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 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, in terms of financial sustainability, the new name of the old financial fair play, a specific year is never analyzed and the analysis is carried out over three years. From the perspective of three years, it is perfectly acceptable that there is a year that goes less well, so, in our case, we are in a position to have a positive result this year. It depends on how the market behaves until June 30th. Any situation is equitable, we believe it is possible to deliver a positive result, but it depends on the market.”
Finally, when asked about the forensic audit, the incarnate CEO assured: «It is worth recapping 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 Ministry asked us for three contracts, and later asked for another series of contracts. What it was decided to do, the new 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, who was never our auditor.
There is a specific team. Firstly, 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 Benfica Board, to our auditors, to Mazars, to the presidents of the Supervisory Board and of the Board of the General Meeting. A second decision was made to go ahead with the same forensic audit with all 48 other contracts. These results will only be obtained in their entirety at the end of the year. It is important to explain why this happens. A forensic audit is an extremely complex process, a process that involves simple things such as the analysis of contracts, relatively simple ones such as financial movements carried out by Benfica, but then much more complex things such as the diagram of connections between the various actors in one or another various operations. Therefore, this implies that this company has to have a very important capillarity in geographic terms because it will have to analyze entities that are based in Lisbon, others in Brazil, Africa or Asia. At any time that a situation is identified in which Benfica’s SAD has been harmed, there will be guaranteed to act accordingly.”