On Thursday, December 16th the Valencia CF Shareholders Ordinary General Assembly was held at Mestalla. The main points on the agenda were approved in the meeting.

Valencia CF president, Anil Murthy, highlighted at the beginning of the Assembly that it is “a source of great pride to be here in my fifth season as president of this great club, and I want to thank Peter Lim for the trust he has shown in me.”

Before the meeting got underway, a minute’s silence was observed in memory of the club's shareholders, partners, members and executives who have passed away over the last year.

Below are summaries of some of the interventions regarding the main topics of interest:

The club’s financial situation

Anil Murthy: “I share with you the opinion that the financial situation is far from ideal, and I share your concern. The numbers are what they are. If we don't fix a problem, we will encounter it again. The problem we currently have is that the cost of squad is higher than our income: We spend more than we make. In this situation there are two possibilities: Increase income or rebalance the squad. We are working to do both. Last year, due to COVID and us not competing in the Champions League, the club had our revenue lowered by almost 50%. Life goes on, wages have to be paid… We are working and we need a couple of years to rebalance this situation. I hope we improve the situation. We have to be optimistic.”

Investment plan for the CVC ‘LaLiga Impulso’ project

Inma Ibáñez: “LaLiga cannot be left behind. We all have to rise up. Not all of the clubs have the capacity of Real Madrid and FC Barcelona. We also need a partner who has access to many other operators. CVC is an industrial partner. What did LaLiga do? Propose a 50-year agreement that consists of allying with someone who will make us grow. With this operation we are expected to grow, and it will make the operation for the new stadium go ahead. There will be clubs that do not need it and are not interested in it.

For us, the ‘LaLiga Impulso’ project represents 120.7 million euros, to be exact. How are they going to be distributed? 15% is going to be allocated to covering debt generated by COVID-19. That is decided by LaLiga, because it has seen that all clubs have a problem generated by COVID-19. We had the problem of COVID-19, added to us not entering the Champions League. There is another 15% that LaLiga has used to register players. All the salary limit number says is that if you don't sell players, then you can't register players. LaLiga allows that 15% to be used to register players.

In addition, there is 70% to invest in industrial growth through digitisation, facilities and other measures, and that is how the CVC operation will be paid for. I would not look at this as a loan; this is not a loan, it is an operation for growth. How is it arranged? It has deadlines that start in December with an advance. In March there will be others, in June 2023 as well, and then in June 2024. LaLiga is not going to just give you the money and that's it. You have to present a project to them and tell them what you are going to use this project for. We are going to allocate most of it on the new stadium - around 80 million euros. Brand or digitisation projects, for example, are also projects for the new stadium. LaLiga already knows that we are going to allocate that money to the new stadium.”

Construction of the new stadium

Anil Murthy: “We have requested a working meeting with the President of the Generalitat, Ximo Puig. I hope to see him soon to explain all the details of the project. In the past we tried to sell the Mestalla land in order to finance the operation, and we were close to doing this with ADU, but it did not work out. We do not stop looking for buyers for this plot of land, but the reality is that we cannot give it away at a very low price. Now CVC enters the picture.

Ignore what part of the press says: The offer for some plots attached to the Ciudad Deportiva has nothing to do with CVC. The majority -almost all- of the money that the ‘LaLiga Impulso’ project allows us to allocate to infrastructures, we will allocate to finalising the construction of the new stadium. That is approximately 80 million euros, and we will need more. What kind of ground are we going to make? We will present this to Ximo Puig shortly at the meeting, but the new ground has to be an entertainment centre 24 hours a day, 365 days a year. Football is played once every two weeks there, but it has to be a constant income centre for the Club.

We want it to be a centre of activity for Valencia CF, for the fans, and for the citizens and visitors to Valencia. After many years of standing still, it is time to start this project as soon as possible, when we have the necessary licenses and permits. We have all the ingredients to start this project. I estimate that in September 2022 we will be able to start building the new stadium, taking into account the licensing deadlines, etc. After investing in the stadium, there is another project, which is the plot of land where Mestalla stands. We estimate that the entire project will represent more than 500 million euros of economic activity in Valencia. It is time to start this project and do it in a sustainable way to fix the financial situation.”

The cost of the squad

Anil Murthy: “The squad had a very high cost in the 2018/19 season. Thanks to Rodrigo's goals against AFC Ajax and Chelsea FC, we got through the Group Stage and the income was very good, but we cannot depend on that, because then what happened happens: We did not qualify for Europe and we have difficulties. In LaLiga there are teams with a much lower squad cost than Valencia CF who are competing well.”

The technical secretary and building the squad

Anil Murthy: “We have suitable people in the technical secretariat. The coach is happy and they are working well at the Ciudad Deportiva. I hope we win today and on Monday. When we talk about the salary limit, we talk about the fact that if we don't sell, we can't sign. The numbers don't lie. We have to rebalance the squad, increase revenue and pay off debt, and we will continue to do so. It is a very difficult financial challenge, but we are complying with the rules and we are working with a plan to improve the squad. I am not going to comment on details on player contract renewals, because it is something that we are working on now and I cannot say more.”

Social media with limited interaction

“It is an issue that worries us. We now have more than 7 million followers and, until recently, every day there were insults, anger and hatred... and nothing else. People who interacted with them told me that that kind of interaction was rubbish. It is not a good example for anyone, especially children, so we decided to limit interactions. Now digital platforms are changing their policy to prevent violence and hatred on social networks. If this happens, we will open them up again.”

Protests

Anil Murthy: “We have seen the images. I am at Mestalla every game. The club has to respond and it has to respond with facts. We are going to move forward with the project for the new stadium, and we are going to finish it after many years of it standing still. I hope that the team will rise up the table and I hope to see a Mestalla that focuses on supporting the team for 90 minutes. Here at Mestalla there were already protests before Peter Lim arrived. Sometimes the screams are louder, and sometimes less. Emotion and passion are part of our DNA and the club has to respond so that the fans are proud of their team.”

Capitalisation to strengthen the balance

Germán Cabrera: “In 2015 there was a capitalisation to reinforce the club's own funds to face possible contingencies, and in recent years Valencia CF has enjoyed reasonable financial health. Recently there have been circumstances -mainly the unexpected sporting results and the devastating effect of COVID- which have generated a significant imbalance. We considered that at this point it was necessary to reinforce capital.

Internally, the club have made the decision to reinforce our own funds, and that provides several alternatives. Meriton loans are a real alternative. Meriton has given loans worth 150 million euros in 7 years, and the amount paid by Valencia CF to Meriton is zero. In this situation, it has been decided to reinforce equity by capitalising old debt. If we have reached an agreement with the majority shareholder to capitalise debt, it is because, unlike a capital increase, through this formula there is the possibility that minority shareholders have the right to register. The purpose of the first increase is to reinforce equity, and this has been done to respect parity of treatment and the right of the minority shareholder to register to maintain their percentage of shares and not harm them.”

Income plans

Anil Murthy: “We are working to get a new main sponsor. We are very close to doing this. After two years without European football I am convinced that many large companies want to align their path with that of Valencia CF. This is not enough, and we have to keep working to generate more income. We have created the VCF Innovation Hub with young companies that in the medium term will also give us income. If we look at the sponsorship market, after COVID, most of it focuses on a few teams. I am very proud of the great professionals that we have at this club, and of their work. In addition, an important source of income is going to be the entire project for the new stadium.”

Loan from ‘Rights & Media Funding Limited’

Inma Ibáñez: “Rights & Media Funding Limited ’is a fund that, unlike other financial entities, understands that football will continue to be televised beyond the years that LaLiga has contracted. With other entities, what happens is that if LaLiga gives you a one-year contract, they only give you a one-year loan. ‘Rights & Media Funding Limited’ understands that when one cycle is over, another will begin, and that is why many clubs have done operations with them. The loan rates are market rates, and they do not go any further than that. This loan does not generate debt. It will only generate debt if we buy players and do not sell.”