PRESIDENT'S STATEMENT

We must be a serious club. We must be responsible. A bankrupt club is not a better club.
 
In 2008, Juan Villalonga announced that VCF’s debt was €439m, excluding the cost of the new stadium. In February of 2009, the construction of the new stadium was halted – after spending more than €150m on it. In March of 2009, the club was dying financially and could not pay the players. The club had lost more than €300m since 2003 (a huge amount of money at that time) and, by June, its debt had reached €547m. The debt in itself is not the issue. One needs cash to pay interest and the principal. The club couldn’t do that.
 
Thus, the process began: Bancaja lent millions to save the club, and the club began selling off all of their star players: Albiol, Villa, Silva, Mata and Alba. “Selling good players is necessary for all clubs, and fortunately Valencia CF have those good players - unlike many other clubs,” said the then-President in 2012.
 
Once bitten, twice shy. Once again, the debt kept rising in 2013, and the club were again unable to pay it. They haven’t paid since 2009.  The entity that was then Bancaja, and which is now Bankia, forced the sale. They wanted new investors who could guarantee both a good economic and sporting project. In 2014, Peter Lim bought the majority stake in the club. Meanwhile, there was a total of €48m in player salaries unpaid, and no cash in the bank.
 
We must be a serious club. We must be responsible.  In 2017/18, after nearly a decade, the club started paying back the banks. The banks were finally happy. They trusted that this version of Valencia CF would be sustainable. In 2019/20, VCF had by far their greatest ever income in history. The club won a first trophy in 11 years, beating Barcelona in an historic battle in the Copa del Rey.
 
However, it was not a sustainable method. We could not just keep on spending.  We already had 30-plus players in the squad, loaning out some to make space for more signings. We were again trying to offload young promising players from the VCF Academy from the squad (such as Lato, Kang In and Ferran) to make space for others -regardless of their future value for the club.  This had to end, and so we ended it. We stopped this strategy and cut our losses before we got too far into trouble.
 
Once bitten, twice shy. You would have to be a fool to continue on the path of spending without thinking about how the club are going to pay. At the last AGM in December of 2019, one of the biggest concerns amongst the shareholders was the growing size of the debt in 2018/19 and 2019/20, mainly due to the signing of players and the related costs. They are right, and we listened to them.
 
We finished ninth this past season  We are not in the Champions League. So we have to rebuild. This is neither the beginning, nor the end. We must learn from the past.  Pushing to have “a big stadium and big name players, wining LaLiga and the Champions League at all cost” will lead to a repeat of the past. As the Minority Shareholders said, we must reduce player costs.
 
A bankrupt club is not a better club.
 
Now we shall address two specific issues in full transparency: The summer transfer market for players and the new stadium.
 
We need to reduce the cost of our team.  First, for the obvious reason that we are not in the Champions League. We only have LaLiga in which to compete, and we will need fewer players.
 
The second reason, which is even more important today, is the impact of Covid-19. The impact of COVID will be serious for the next 2 seasons. It has disrupted the global economy. At VCF we will see the following effects financially:
• TV rights money could be reduced by up to 30%
• Commercial (gates and sponsorship) income will drop by 50%
• Total income is likely to be halved
 
In this situation, we will do everything possible to keep the club going.  First of all, we must bring down salaries, which means selling players with 2-years or less remaining on their contracts, with high wages. Furthermore, some are getting older and are prone to injury. We can’t keep these players, and neither should we. Secondly, we must keep investing in our VCF Academy talents and bring them through. We have made significant changes to the VCF Academy and the medical team just two weeks ago.
 
In the specific case of Ferran Torres, we should be clear:  He chose to leave, despite being offered one of the best salaries on the team. His agent said NO to the offer.  Each person chooses their own path to take. We will learn from this experience, but we won’t forget it.  We have a good group of players from the VCF Academy coming up and we will make sure that we don’t have this kind of problem again. They are good kids. Many of them are training with the first team now.
 
 
What is happening with the new stadium?

After nearly a decade, we had everything in place to make it a reality.  We had a buyer, ADU, and the bridge financing to start building in May 2020 and to finish in 2022. ADU are not a small player in the property market. They have many developments in Spain. We worked with Deloitte, one of the Big 5, to make this deal happen. ADU could not deliver their guarantees on time. However, on the advice of Deloitte we gave them more time.  We could not wait anymore to leave it open for others. ADU kept working on their project. We removed the exclusivity clause in February of 2020 and are working with other important players to buy the current Mestalla. We must have guarantees. This is a project that has led to the bankruptcy of the club before. We are not going to sell all of our players to build a new stadium!
 
Our plan is very simple. To build one of the best stadiums in Europe, with state of the art facilities, we will have to: 1) Sell for a minimum of €120m. 2) Build for €150m with financing for the remaining €30m, 3) Increase the capacity to a possible 65,000, 4) Increase season ticket prices and general public tickets by an average of 15% to support the operating costs of a bigger stadium.  This is a sustainable model for a new stadium.
 
We had everything prepared, but it fell through. We are working on it again.  In the meantime, we have met all our payment obligations, of more than €1m a year, under the ATE.
 
Now, with the current economic climate during the COVID pandemic, investors are waiting. But many are asking about the project. We will continue to work with the Generalitat and the Ayuntamiento on this important project for the city. And we will find a solution to the new stadium situation.
 
Nevertheless, we are still winning. We have qualified for Champions League three times in our six seasons here, and won a trophy. It is no less, if not better, than the previous six seasons before we arrived. It is also in line with VCF’s Champions League qualification record throughout the club’s history.
 
We are committed to building a sustainable club and to keeping it growing. This takes time. In the meantime, everyone stay safe, along with your families.
 
AMUNT VALENCIA!

Anil Murthy