SL BENFICA | John Textor

UPDATE: July 16, 2021

In response to the Board's decision to object to the purchase of SLBEN shares:

I am of course disheartened to hear, officially, that the board of Sport Lisboa e Benfica would not approve my purchase of shares from Mr. Santos. I am also surprised that my offer to fund the capital needs of the Club, at terms more favorable than the proposed bond issue, seemed to get very little consideration.

I am not surprised by this decision, but I am disappointed. A chance to join the family of SL Benfica, which itself had already invited public investment, would be the opportunity of a lifetime.

My purchase agreement was appropriately originated, negotiated, documented and disclosed in timely fashion. I am independent of leadership, past and present, and I do believe it unwise for the board to view my offers of support through the lens of recent events that are entirely unrelated to me. Leadership is a lonely enterprise, and it requires courage to lead during difficult times. I think a decision to evaluate my proposal on its merits, alone, would have been the obvious choice of leadership.

That said, I do respect the Board's decision to focus on the important challenges of the coming weeks and months, on and off of the field...the UEFA qualifier, preparation for a successful league campaign and, of course, a year-end election to allow the people of Benfica to guide the direction of the Club.

I also do take some comfort in the language of the Board. Maybe I am an optimist, but I interpret their decision to be very much about timing. Recent events have forced the Board and the community to adjust to a leadership change that no one thought possible. It cannot be easy being a board member at SL Benfica during such difficult times. It stands to reason that the Board would want to be careful and contemplative as it sets a course for the future...but I do believe that I will, at some point in the future, be received by this board and this management team for an open, friendly and healthy exchange of ideas.

Lastly, I think that all of those that care about SL Benfica should take comfort that, however shocking the disruption has been, there have been no changes to your impressive SL Benfica management team...and your favorite players are in training, as we speak, and they likely care very little about all of these headlines.

With a heart that is both heavy and hopeful, I wish the people and community of Sport Lisboa e Benfica the greatest of joy and success for the coming season and for the future. My plan is to now focus on investments in the United Kingdom which I hope will one day be viewed as valuable to the board of SL Benfica.

...e não se surpreenda se o primeiro jogador que pedirmos emprestado ao SL Benfica for uma águia!

Until then,

Saudações Benfiquistas!

John

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UPDATE: July 15, 2021

To the people and the community of Sport Lisboa e Benfica:

I appreciate so many of the well wishes that I have received from Benfiquista in Portugal and abroad. I am also very happy to learn that many of you were able to read the initial statement, via my personal biographical website, which clarified my beliefs and my hopes to become a part of the Benfica community.

It therefore seems a very good idea to continue to use this website to communicate clearly my position as facts get twisted and circumstances evolve. Please consider the following as an update, as of July 15, 2021:

PROCESS

I have respectfully requested a meeting with leadership at Sport Lisboa e Benfica, by email, and it is my hope to travel to Lisbon by Wednesday of next week.

I understand now that certain members of the Board, or possibly the management team itself, may be looking to distance the Club from my contract to purchase an interest in the Club, as my involvement is too closely associated with the recently departed Chairman. The Chairman has been trusted to lead SL Benfica for 17 years. Surely my short meeting with him, as I have detailed below, should not be disqualify my proposals in any way.

To be clear, I was introduced directly to Mr. Santos by my investment banker in London. I have no business connection to the departed Mr. Vieira. If other parties have learned of private business dealings between Mr. Santos and Mr. Vieira, that is simply not something I would have ever known, and it could not possibly invalidate Mr. Santos right to sell his shares, or another party's right to buy such shares. The leaders long ago believed it wise to create SAD as a publicly listed company and I am merely an investor that sees incredible value in the shares of SL Benfica SAD.

The parties that would seek to distance themselves from anything that appears connected to Mr. Vieira have been supporters of his for many years. I am entirely new to the community of Benfica, am here to be helpful, and I reject the dishonest attempt to suggest that a customary negotiated purchase of a share block is an illicit transaction.

The Santos Meeting: Our transaction was conducted in broad daylight, signed in the lobby of the Four Seasons Hotel in Lisbon. Immediately after securing the transaction at an attractive price per share, We congratulated each other on a successful signing and were visibly photographed together in a very public place. Such photographs would be customary and there was nothing secret about this meeting. Mr. Vieira was not at this meeting and had no involvement in the contract with Santos.

I will repeat again...as there is no contradiction from my Monday statement...I have never sought, negotiated or reached an agreement to purchase SLBEN shares from any party, other than Mr. Santos. Tis seems to be a repeating misunderstanding, though this should be really clear, it was always my belief that Mr. Santos was the source of the shares, either those that he had already purchased, or those that he had agreements to purchase.

Upon completion of the signing, I believed it was then appropriate for me to meet with leadership of the Club, which I believed was necessary to be sure that I was welcomed into the Club as a positive contributor. I have previously given a statement that I believe it is not appropriate for me to comment on Mr. Vieira, under the circumstances of the investigation, and I have also made clear that he had nothing to do with the origination, negotiation or completion of the purchase from Mr. Santos. Those statements remain true.

The Vieira Meeting (Next Day): In light of recent and persistent questions on this matter, I think it appropriate to elaborate on this point. I was fortunate to have a brief meeting with Mr. Vieira, on the day following my signing of the agreement with Mr. Santos. The meeting was brief, conducted through a translator, and I felt comfortable that Mr. Vieira valued my intended contribution to SL Benfica. It would of course be customary for a 25% purchaser to request such a meeting and it would be necessary for leadership to know who was potentially buying shares. Also, given the possibility that I might acquire interests in other European clubs in the future, I wanted to make sure this would be seen as collaborative and valuable to Benfica. I left the meeting believing it was a successful first introduction.

Statements made by Vieira and/or Santos representatives to Prosecutor: "The day after signing the contract at the Four Seasons Hotel, we had a meeting at Mr. Santos' office outside Lisbon. In the middle of this meeting, the former president of Benfica appeared. John Textor wanted to meet him and see if he would be well received. And the former president of Benfica wanted to know what JT's intentions were and the reason why he invested in Benfica. The conversation took half an hour, John Textor left the meeting and the former president of Benfica stayed with Mr. Santos."

Since the moment I learned of the arrest of Mr. Vieira, including monitoring methods, it has been my assumption that the authorities would have been aware of this meeting. I am not concerned with my participation in a requisite meeting with leadership, though I have chosen not to discuss the specifics, as I still believe it is not appropriate for me to comment on Mr. Vieira in the press. I am of course happy to comment in depth to any official that would seek my testimony in connection with a formal affair. I believe this process, from my perspective, was entirely appropriate.

I have never denied this meeting, I have just chosen not to discuss the meeting...and I have kept my comments focused on the fact that I only negotiated with Mr. Santos.

After that meeting, I then toured all of the relevant facilities of SL Benfica...the stadium, Benfica TV studios, the Academy campus. I felt very welcomed and this felt very normal for an incoming shareholder. So why on earth should anyone consider these meetings secret? I had no control over who was told, but I toured SL Benfica 'in the sunlight', getting photographed constantly along the way, while being introduced openly to a number of people. For me, this was a great day...a dream come true.

Further, I have requested to meet the full management team to be sure they would be supportive of my involvement, otherwise I would not be interested in making an investment. This signing was only three weeks ago and a meeting upon my next trip to Lisbon would be very timely, especially with a contract closing date of September 15. If the Board was not notified, and the management team not informed, that would be a surprise to me. Frankly, I find it hard to believe this is true.

VALUATION

Do not believe what you read when others suggest that I paid a high price. Sport Lisboa e Benfica is among the most valuable football clubs in the world. This should be no surprise to the associates of Benfica. At the average price of 3.00 Euros per share, and 23.0 million shares outstanding, the trading market in Portugal would suggest that SLBEN is worth only 69.0 million Euros. This is nonsense. The lack of trading on the Portugal exchange, which has allowed this depressed price to prevail, would have us believe that the entire Club is worth less than one Bernardo Silva (the Textor family's favorite player) or one Ruben Dias. This is simply not correct.

I retired from my former company fuboTV as the largest shareholder and have since sold my position. I was able to take that small company, originally known as Facebank Group, from an $80,000 cash balance sheet in the middle of 2018 to a peak value at the time of my October 2020 resignation of $8 billion. I understand the public markets and I know value. Sl Benfica, if allowed to open up its listing on the New York Stock Exchange as I propose, would be valued at a starting value of '5 times revenue', slightly less as a multiple than the slow growth Manchester United. This would imply a starting valuation of more than $1.5 billion...or $65 per share.

With a plan to establish true Benfica academies in six major markets in the United States, with football development and academics of equal importance, American and South American families would provide another $200 million to increase SL Benfica's revenues. There is nothing like such a program (with a Benfica comparable brand) in the United States, a country that pays more attention to European football than its woeful American counterparts.

Benfica TV, which is distributed in the United States by my former company fuboTV, could fill the vacuum of 24-hour coverage of football in the Americas and around the globe, with both Portuguese and English-speaking delivery.

A sports valuation only gets you so far on Wall Street, but a brand that maximizes the revenues across media, social media, with vibrant content and technology driven consumer apps (like those we build at Facebank.com). Sports companies may trade at 5-times-revenue, but technology and media revenues that are driven by big brands like Benfica can trade at 12-times revenue.

Most important in valuation is the obvious principal...the loyal audience of the team, will always be more valuable than the team. Other sports and media companies have figured this out (Marvel, Star Wars, Manchester United). Why not Benfica? It's time for SL Benfica to offer more to its audience, to interact with its audience through technology, social apps, and other affinity programs, during the days when the team is not on the field. Our company Facebank launched one facial interactive app, for women, which yield $30 million in revenues with a $24 million profit...while another app (augmented reality faceprint for fans) yielded 35 million downloads during a short promotion. The Audience is more valuable than the business model of the team...and the Benfica audience around the world is massive.

More revenue, and a higher valuation for YOUR ownership of SL Benfica SAD means more money for YOUR favorite players. SL Benfica SAD is already publicly listed. That decision was made long before I showed up...so why should you accept that SL Benfica can be such a success on the football pitch and such a failure as a public company. A valuation of 3.00 Euros a share is a joke...and I can fix it.

There is nothing questionable about an American investor, that loves football and its connection to the community who sees 8.70 Euros per share as a beautifully cheap price. I have the talent and the experience, across technology, media, games, consumer apps and Wall Street to turn your 3.00 Euro price into something much higher...for you and for all stakeholders...so SL Benfica can take its rightful place among the most powerful clubs in Europe.

THE BYLAWS SHOULD NOT BE USED AS AN ARBITRARY ACT OF CONTROL

Now ask yourself why the people on the board, or in management, would choose not to take a meeting with me and quickly announce that I am a Competitive entity, abusing a tool in the Bylaws to cancel the shares I may buy. If it's corruption they are trying to escape, this is no way to start...branding me as competitive and hostile, without so much as a conversation. Why would they not open up to all ideas and give me an audience to propose helpful solutions. I'll let you decide, do I look like a competitor?

My Florida academy could not possibly be a competitive entity. FC Florida Preparatory Academy was started by me, and a Portuguese friend whose family still lives in Lisbon, as a non-profit entity to help financially starved children use soccer to claim scholarships to American universities. FC Florida Prep Academy receives no revenues for its efforts, only my personal donations to cover the expenses of training and travel to create schooling opportunities for kids. We also have made direct contributions to educational expenses when deserving student-athletes cannot cover their school costs. I feel comfortable that the Board would celebrate our work at FC Florida, and not deem our donations to children as competitive with SL Benfica. After all, is every shareholder of SLBEN that volunteers their money and time to student-athletes at risk of seeing their shares cancelled? This cannot be the purpose of the bylaws of a community minded club like SL Benfica.

My former affiliation with fuboT could not be deemed competitive. Please know that I retired from fuboTV in October of 2020. I am no longer and officer of fuboTV. I am no longer a director of fuboTV. I have no affiliation with fuboTV. I may have once been the largest shareholder of fuboTV, but I now own considerably less than 1% of fuboTV as a common public shareholder...and I would commit to sell these immediately if this passive investment causes concern. That said, as fuboTV was among the very first (maybe the only) national television distributors of Benfica TV, I am sure the board knows that fuboTV is a friend of Sl Benfica and not a competitor. So why would they announce that the Benfica TV distributor in the United States is a hostile and competitive association? To the contrary, my experience with fuboTV should be expected to dramatically enhance the programming and distribution of Benfica TV to strengthen the U.S. audience for SL Benfica.

Crystal Palace and Fulham? I am not currently an investor or an owner of any other football club, anywhere in the world. I have made clear my interest in becoming a minority owner (not a control owner) of an English football club in the future, but that means I am not a competitor now (under any definition in the Bylaws of SL Benfica)...and is it not true that SL Benfica has considered similar ideas to expand into the UK?

To the extent that I do become an investor in a UK club, I believe such a partnership would dramatically enhance the marketability of Benfica academy players, thereby increasing revenues per player transfer, and reducing the need to transfer as many of Benfica's best players. Frankly, I would rather see revenues grow internationally so that player transfers could be reduced to match the practices of the very best clubs win Europe. In any case, as SL Benfica has long considered acquisitions of clubs in Europe and SL Benfica routinely collaborates with clubs in England, I am sure the board knows that my ideas to invest in a collaborative club would only benefit Benfica, and not be competitive. In any case, the board should not operate on rumors of what I might acquire in the future as a determination that I am already a competitor...which I am not.

To conclude on this issue of competition, an individual who once was aligned with a TV streaming company that promoted Benfica TV, who donates his time and money to a charitable organization for student athletes, and is considering investing in clubs that can provide attractive and profitable collaboration for SL Benfica should not be seen as hostile. Who else would you like to see buy the shares of the outgoing Mr. Santos? Alibaba? I would suggest that the board would enjoy having a passionate investor, that wants to be in the minority, elevating the interest of the majority that is owned by the people. Please read my initial statement again, on this website. I believe in the People's Club of SL Benfica...but I believe its time to finally open up to the world of opportunities, beyond the narrow economy of Portugal, so that SL Benfica can take its rightful place at the top of world football.

Four Benfica players in the starting XI for Manchester City...ready to play against us if ever we should meet...isn't it time to try something else?

To Update you on my proposal, as I emailed to your leadership just today, I would like to add to my proposed financial investment in SL Benfica SAD...to be as helpful as I can in this challenging time:

I have asked the Board to stop playing games with the definition of a competitive entity and bless, in advance, my purchase of shares from Mr. Santos. Article 13, section 4, of the bylaws was created to make sure that Sporting Lisbon would not become a shareholder. It was not created to reject public company investors that come to Benfica because they already have an established love for football, with investments or activities in sports that are clearly helpful to SL Benficawith helpful ideas as a tool for your board to arbitrarily decide who can challenge their ideas. They keep out for individuals to wield their power to preventOther facts which seem relevant today.
I will offer to buy-out any other shareholder that may look to exit, or that the board may want to exit, and I will vow to never vote my shares against the people of Benfica. I am buying into the will of the people, and I will commit to that will for the life of my involvement with the Club.
I will immediately fund the unfunded portion of the current bond issue, as I understand (from rumor) that the bond issue may be in trouble. Whatever the public has decided not to buy (effectively a loan to SL Benfica SAD), I would immediately fund the difference, so the Club can carry momentum into the season with all of the resources necessary to be successful in competition.
If for some reason their are no investors committing to fund the bond issue, with a 4.75% interest rate, I will fund the entire bond issue of 55 million Euros at a 3% rate. Debt is bad, but if it comes from me, it can at least be cheap...because SL Benfica should stop borrowing money (50 million at a time) and SL Benfica should raise 200 million euros in a high price float on the New York Stock Exchange.
I have offered again to travel to Lisbon immediately to discuss all of my proposals and offers of help, before next week's AG meeting, which apparently will offer an agenda item to cancel my proposed investment. What could be the harm in meeting, when a party comes bearing gifts. Certainly they have the right to say no, and choose another path, but to reject such proposals off of rumor and innuendo is simply not a good way to handle the People's business.

To conclude, I have asked the board to give these ideas a chance. It seems clear this won't happen, but maybe someone on the board is not thinking about optics, or the coming election, and we can put some good ideas to work. I have no opinion of who should be the next President / Chairman, though I do believe the direct management to be top class and ready for a global markets debut. As for me, I am completely independent...and my helpful proposals, which are exactly what the Club has been seeking, should not be rejected because of a two hour meeting that was entirely appropriate for the purchase I was contemplating.

I do regret all of the mess that has resulted from what I believed to be appropriate and conventional meetings. I honestly do not know how my arrival through the front door could have been perceived any other way. I believed my project to be transformational for SL Benfica and I remain hopeful that, whatever the decision of the Board might be this week, that I would have an opportunity to present these ideas sometime in the future. These are extraordinary times for the Club and the job of the Board is not an easy one, under the circumstances. I will respect any decision the Board believes is best for SL Benfica the time.

Warmly,

John Textor