The financial evaluation of Tehran's two main football clubs is over and both are set to go public via the Iran Fara Bourse base market in the coming weeks.
As per the assessments, Esteghlal Athletic and Cultural Club is worth 27.8 trillion rials ($104.9 million) and Persepolis Athletic and Cultural Club 32.1 trillion rial ($121.1 million), local news outlets said Sunday.
According to the head of Iran Privatization Organization, Hossein Qorbanzadeh, 10% of the value of the clubs will be offered in the bourse.
"Shares are planned to be offered by the end of February," Qorbanzadeh said. The official added that the “brand value” of the two clubs was estimated at 70% of their total value.
The IPO is studying relevant issues with the representatives of the two clubs, he said without providing details.
The move comes after recent media reports on the possibility of banning the two clubs from the AFC Champions League 2022 because they failed to meet the requirements for obtaining the entry licenses.
In May 2020, it was announced that shares of the two biggest soccer clubs will be offered in Iran Fara Bourse's Base Market after their registration and recapitalization is completed.
Shares of companies unable to address the main regulatory requirements, namely financial transparency, can be traded only in the base market.
More than a decade ago, when the Asian Football Confederation insisted on privatization of professional football clubs, state-owned clubs were no more acceptable and deadlines were set for transfer of proprietorship.
Following the AFC ruling, several scenarios were considered for the two clubs, including auctions. Efforts to privatize Esteghlal and Persepolis failed to produce the desired results. The baton has been passed on from one government in Tehran to the next.
Accumulated debts of the two clubs and their flawed financial reports are seen as the main hurdles to privatization. According to Qorbanzadeh the last financial statements of the two clubs showed debts of Esteghlal and Persepolis at 2,000 billion rials ($6.6 million) and 1,500 billion rials ($5 million), respectively.
Esteghlal (the Blues) had a private owner before the 1979 Islamic Revolution, but the club was later put under the control of the then Physical Education Organization (now Sports Ministry). Persepolis (the Reds) had a similar fate.
