José Pedro Pereira da Costa, the new CFO of FC Porto, gave an exhaustive approach to the club’s balance sheet on the “JE Entrevista” podcast, highlighting what is clearly wrong and what can be changed with rigorous and creative management. Interview originally published on April 15th.
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Positive equity only through accounting creativity – “which UEFA does not recognize” – expenses incurred by those who live beyond their means and a general management of the club’s most important assets that is not only inefficient, but also portrays a drift that needs to be stopped as quickly as possible. José Pedro Pereira da Costa, Chief Financial Officer (CFO) of André Villas-Boas’ ‘insurgent’ candidacy for the Futebol Clube do Porto elections – which will take place on April 27th – is very critical of the way the club’s SAD is managed – and which, he states in the podcast “JE Entrevista” loses across the board to the most direct competition: Benfica and Sporting.
Both in what has to do with the management of players’ passes – which are not properly observed as assets that cannot be devalued “let alone reach zero” – as well as the more trivial sale of tickets and merchandising, everything, from Pereira da Costa’s perspective, can be improved. Furthermore: it must be improved, otherwise the club will be pushed to the margins of irrelevance as an institution.
“The economic and financial situations are worrying”, he states. “There is an economic problem because the club has not been able to generate revenue that sustainably covers costs.” Isolating operational deficits as a factor that ‘erodes’ the club’s financial health, the proposal of the list it is part of is precisely to radically change everything that comes across on the negative side of the balance sheet.
As expected, the ‘electoral campaign’ has left economic issues as subordinate to the more specific debate on the ‘passions’ that surround the club – which has transformed the last few weeks into a barrage of accusations between the two candidacies – there are two more, but it seems that they are going to ‘die’ unknown.
For André Villas-Boas, the cause of his candidacy, as he said in the presentation of the proposal, has fundamentally to do with the ‘aging’ that decades of presidency centered on the same person, Jorge Nuno Pinto da Costa, have motivated. The ‘new blood’ that Villas-Boas, a former coach, wants to be used for a deep transfusion has made its way into the city – as is easy to spot in cafes, at metro stops or on garden benches.
Born into a conservative family, André Villas-Boas grew up among financial reports: his father, Filipe Villas-Boas, is a shareholder in a metalworking company and a regular presence in the area of business associations (AFIA and AIMMAP). Economic and financial issues are, therefore, no stranger to him – contrary to what one might imagine given his status as a former coach.
Even so, the choice of José Pedro Pereira da Costa as CFO is the assumption that the club’s finances are the mainstay that needs to be consolidated. Pereira da Costa was executive administrator of NOS for the last ten years, with responsibility for the financial area; previously, he had been CFO of PT, between 2003 and 2007, and then of ZON, the company that would later give rise to NOS.
From the outset, the economist complains that there is great opacity on the part of the opposing candidacy. Not so much because of what is written in the balance sheet, but precisely because what is written shows that something is not right. And it runs the risk of continuing like this: Pereira da Costa says that the proposals for the club’s growth in financial terms presented by Pinto da Costa’s candidacy all follow the same pattern: an absolute lack of information. This is what we see, he said, when ‘opponents’ talk about the new company to be created with a foreign partner (Porto Comercial II) or the plan to build a new FCPorto academy complex (a training and training center learning) “that no one seems to know for sure how much it will cost”.
In the midst of the media dispute, it became known that his counterpart in Pinto da Costa’s candidacy – the former minister and former president of the Porto municipality Fernando Gomes – will not be transferred to the new squad. Punishment for some bad service? It doesn’t matter, from Pereira Costa’s perspective. Which ends with a warning to navigation: the project – to recover revenues, reduce costs – is to be maintained within a strictly national logic (“if this is not the case, it means we have failed”) and to be implemented within six years.
