Source: THE BALL IN CONFUSION
http://marcoliguori.blogspot.com/2010/11/barcellona-rosell-rifa-i-conti-laporta.html
Monday, November 15, 2010
Barcelona Rosell builds on the Auditors Laporta
In the first version of the budget of the club Barca ended June 30 had reported income before taxes of 8.99 million. In the second version instead has detected a significant loss of 79.6 million
The elections that were held June 13, 2010, led to the formation of a new Board of Directors, which manages the "Fútbol Club Barcelona" , July 1, 2010. The new president Sandro Rosell i Feliu is the successor to the former Joan Laporta Estruch. The budget for the year ended June 30, 2010 Barcelona has been the subject of dispute and controversy between the retiring Board of Directors, headed by Laporta and the successor, chaired by Rosell. On September 22, 2010, the new Board of Directors "re" the budget taking into account the findings and observations made by auditors Deloitte to the budget itself, which was introduced on 1 July by the outgoing directors. In the first version, written by the "Junta Directiva" Laporta, was exposed through a pre-tax profit of € 8.99 million, while in the "revised" by the "Junta" Rosell's budget shows a significant loss of € 79.6 million and a net loss of 59.1 million.
Exposure of changes made between the two versions of the budget, we can help you understand how the financial statements of a company, simply by changing only some criteria for evaluating a limited number of places, both situations can be "quiet", which situation "worrying" if not "alarming."
pads alleged by Deloitte to the first version, has led to a negative € 91.6 million. The most important point is some risk provisions are not made, according the criteria of prudence required, as the provision for the dispute with Sogecable. The provision made by the junta Rosell, for this litigation amounted to € 35.1 million plus 2.6 million in interest payments. This "necessary prudence" has found its counterpart September 6, 2010, when the Barcelona Provincial Court handed down the sentence appeal, in relation to the application filed by the "Fútbol Club Barcelona" against the previous ruling of the Court of First Instance, dated January 12, 2009. The ruling of 6 September 2010, condemned the club to pay the company Sogecable SA, an amount equal to the proceeds received until May 4, 2007, both from 'UEFA, which by similar bodies for other sports such as basketball, handball and hockey as well as VAT and accrued interest from December 1, 2005. Even if you have submitted a further application for admission of the same directors, there is little chance for favorable Barcelona win. Thus, detection of this condition "unfavorable" led to a worsening of accounts of 37.7 million euro compared to the version of the budget of Laporta, who had not quantified numerically between the financial statement items that negative event.
Another dispute, on what the player Jose Raul Baena Urdiales, for breach of contract, has seen the player to succumb and be sentenced to compensation of € 3.5 million to the Club, together with interest, as per decision of the Provincial Court of Barcelona, \u200b\u200bdated April 6, 2010. However, this amount, entered as income in the first draft of the budget, according to the auditors had doubts about the collection, also in view of the fact that the player has lodged an appeal against the sentence. The negative impact of lack of exposure to this "likely" proceeds, in the second draft, was 3.9 million euro.
Another adjustment made by the "Junta" Rosell concerns the sale of land in Sant Joan Despi (a suburb of Barcelona), the "preliminary" was concluded December 29, 2009, to June 30, 2010 but was still not signed the final contract. GAAP accounting in the recording operation can be performed at the time when the same is completed. Despite this principle, the "Junta" Laporta had failed to show "due from third parties for sale of non-current assets for € 17.4 million with a gain of € 14.9 million. Rosell, according to the findings of Deloitte, the accounting record is no longer performed.
Another surprise was the free transfer of Thierry Henry, who in the first draft of the budget was "neutral", while in the second draft saw the registration of 6.9 million euro for losses and 1.3 million for contractual obligations. In the second version of the budget, the proper allocation of the sale of Henry has had a negative 8.2 million euro in total.
According to Deloitte auditors, in the first draft of the budget of the value of land Viladecans (Barcelona), allocated in "Investment Property", was not estimated in accordance with auditing standards. The evaluation according to the accounting of such land has resulted in a decrease of € 11.5 million. In the 2007/08 season, the Catalan club acquired land in the municipality of Viladecans with an area of \u200b\u200b278,544 square meters at a price of 18.5 million euro. The assessment of the land contained in the budget "reformulated" was commissioned from an expert who estimated the value of the land in € 5,500,000. In the balance sheet at June 30, 2009, the value of such land was included with the figure of 18.7 million euro. As a result, income statement has been recorded a writedown of € 13.2 million.
In the second draft of the budget were recalculated deferred income related to some "bonus" for broadcasting rights. In particular, the Barcelona under the contract signed May 5, 2006 with Mediaproducción SL, valid for the seasons from 2008/09 to 2012/13 rediscover a "bonus" 20 million €. On 9 June 2010, the Catalan club has signed a new contract with the same company, which expanded and improved the previous year. In fact, besides the economic content to annual review, which has been extended until the 2013/14 season, with an additional bonus of 13 million €. The new contract is effective as of the 2010/11 season until 2013/14. In the first draft of the bonus 13 million was allocated in full in turnover to 30 June 2010. The remaking of the budget by the "Junta" Rosell has resulted in the restatement of deferred income, sharing responsibility for and under the new contract period is the first of 20 million bonus, the bonus of 13 seconds million. The negative impact of this incorrect charge, compared to the previous year was 12 million euro.
The "bad luck" was also wanted on June 16, 2010, Mediaproducción SL, asked the Bankruptcy Court of Barcelona of being subjected to voluntary bankruptcy proceedings and the request was granted June 22, 2010. The credit for the "bonus" of the new contract has been allocated as current assets under "sundry". The reformulation of the budget has forced administrators to record a provision of 3,250 thousand euro, due to the estimate of potential loss arising from the bankruptcy proceedings. But most importantly, June 9, 2010, as described above, was signed the new contract for the seasons from 2010/11 to 2013/14, which represents 40% of the club's annual revenues. Faced with this "detail" is not negligible, the Board wrote that, according to the information available at the time of drafting the budget, we can assume that the bankruptcy of the operator will have no effect on future revenue from the contract. On the latter claim, however, auditors Deloitte, in relation to the second budget, have written that you can not say objectively whether the provision made is adequate or not, or it can be said with certainty that the bankruptcy will not affect future revenue of the club.
Luca Marotta
jstargio@gmail.com
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