Benfica with record profits, Porto and Sporting in technical bankruptcy

  • ECO News
  • 10 March 2020

Sale of João Félix for 120 million strengthens Benfica accounts. Champions' failure leaves FC Porto financially weakened. Sporting gained some 'oxygen' with the transfer of Bruno Fernandes.

While the League lead remains separated by only one point, with an advantage for FC Porto, in what are the financial results the rival Benfica has the victory assured. Driven by the historic sale of João Felix to Atlético de Madrid last summer, the ‘eagles’ registered a record profit of 104.2 million euros in the first half. The ‘dragons’, with the flop that was the participation in the Champions League, had losses (also historical) of 52 million euros. In Sporting, making a championship below expectations, the ‘lions’ showed a profit of 2.8 million, still waiting for the sale of Bruno Fernandes to Manchester United for 55 million to be reflected in the accounts.

The first half of the 2019/2020 season brought bittersweet flavours to the big three in national football. Both on and off the field.

If Benfica’s accounts are more healthy, after João Félix’s transfer to Atletico de Madrid for 120 million, things are a little different on the football field. The ‘eagles’ have suddenly lost seven points from their Liga Nos advantage after several games without a win, and are now in second place. Otherwise, fans have reason to celebrate Luis Filipe Vieira’s good financial indicators.

The operating profit – revenue earned less expenses – rose by 500% from 20 million euros to 116.7 million euros. Important fact: the gains obtained with player transfers amounted to 137 million euros, explaining the improvement in operations. This largely explains the positive net result of 104.2 million euros, an increase of 640% compared to the same half of the previous season.

In FC Porto and Sporting, the numbers are different. In fact, with the millionaire sale of João Félix, the Benfica SAD jumped to another level regarding the financial part.

Benfica with record profit, FC Porto with historic losses

FC Porto SAD accumulated a loss of 52 million euros between June and December last year. The losses are due to the fact that the senior team did not qualify for the group stage of the Champions League. With that, FC Porto didn’t receive the prize of 40 million euros just for entering the millionaire competition, to which could be added a few million more depending on performance. The ‘dragons’ will now have to compensate these losses with the sale of assets, namely athletes.

In the case of Sporting, the sale of Bruno Fernandes does not yet enter into the accounts, as it only happened at the end of January. The athlete was sold for 55 million to Manchester United. Part of that money went directly to pay off the debt to the banks. On the other hand, Sporting president Frederico Varandas hired Rúben Amorim as head coach for 10 million, with which he hopes to turn around the less favourable results. All these impacts will be reflected in the annual accounts. For the time being, the semester ended with the ‘lions’ registering a profit of 2.8 million and a negative operating result of 16 million.

Benfica with assets of 600 million. Rivals maintain technical bankruptcy

João Félix is a good example (and a rare case) of how football clubs can value their assets through the training of young players: he arrived at Benfica’s Academy without no cost and left, years later, with a valuation of 120 million euros.

This allowed the assets of the club to exceed 600 million euros for the first time at the end of December last year (+26% compared to the end of the transit season). In this period, liabilities also increased by around 20 million euros to 385.3 million. The ‘eagles’ balance sheet is now very healthy: equity amounts to 223 million.

FC Porto and Sporting in technical bankruptcy

In the opposite direction, the two rival SAD remained with negative equity, with both clubs in a situation of technical bankruptcy. In FC Porto SAD, the patrimonial situation deteriorated in a more significant way: the assets depreciated about 15 million, while the liabilities increased almost 40 million to 444,5 million. This resulted in a worsening of negative equity to almost 90 million. the assets of FC Porto are 90 million euros shorter than the liabilities it has to meet. And it can put the ‘dragons’ in a delicate position when it comes to future investments.

In Sporting SAD, although assets have depreciated by 20 million, the ‘lions’ have also reduced liabilities in the same order of magnitude. As a result, equity has stabilised at -21 million.