Barcelona began a new La Liga season edging past Valencia. The Catalans managed to inspire a comeback after they were a goal down. The win was secured with a Lewadonski’s Penalty, which made it his second of the game. Barca won 2-1 at Valencia. However, the Blaugranas still have a lot of in and off-field challenges.
After the signing of Dani Olmo, the Catalans are still struggling with the registration of the Spaniard. Alongside this is the rumors surrounding their German star Ilkay Gundogan wanting to leave the club. Another challenge is also the multitudes of Injury issues. A prominent one is Frenkie De Jong, who has been unable to recover after an injury in April.
All these challenges have been leaned on the fact that the Catalans are in a serious financial mess.
Outlook of Barcelona’s Financial Mess
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The unveiled financial figures this year showed that Barcelona league-imposed annual spending cap for wages and amortization has been reduced to €204 million. The league-imposed annual spending cap for wages and amortization is the cost of a transfer divided by the length of the contract. The divided variables are made to apply a book-keeping value to every of their signing. The €204m is regarded to be an excess of over €200m based on La Liga’s calculations. So therefore they must put in some effort to lower the value, for them to operate in La Liga conveniently.
The more this issue is peeped at the more complicated it gets. However, a lot of people who have studied the issues of Barcelona’s financial entanglement believe there’s a major reason behind it. All this centers back to the wage bill inflated after Barca won the Champions League in 2015. Another possible reason inferred is the consequences of poor management at the board level during the COVID-19 pandemic.
Other Factors Behind Barcelona’s Mess
Another reason that stems from this season is Barcelona’s move to a 55,000-capacity Olympic Stadium in Montjuic. This is around the re construction of of their home stadium Camp Nou. This stadium now already renamed Spotify Camp Nou is considered the largest in Europe, with around 99,000 capacity. This in return influenced the ticket revenues on matchday naturally.
Marc Ciria, who is a financial adviser, and planning to run for Barcelona’s presidency in the next election spoke to ESPN saying,
“Barça had a wage bill closer to €700m and Madrid around €400m [pre-pandemic], Multiply that over time, and there you see [the difference between the two clubs].”
Jaume Roures, who is also a Catalan businessman, has assisted Barcelona and Laporta financially. The ex-CEO of Mediapro (a Spanish multimedia group) supported Barca’s financial mess by adding to the Bank Guarantee needed for him to win Presidency status. He also bought 24.5 % of Barca Studios which is the club’s house media wing.
Roures spoke to ESPN, saying “The management at Barça has historically been very bad, When PSG signed Neymar for €222m [in 2017], Barça registered €32m in profit. The debt was already monstrous then. In any company, if you receive €222m [still the world record for a transfer fee] and have only €30m in benefits, you get fired.
“Admittedly managing a football club is not the same as any other business, [due to] the pressure you are subjected to and the emotions you are handling. Madrid, though, between [club president] Florentino [Pérez] and [CEO José Ángel] Sánchez, have had a little more luck and at the same time, they’ve been capable of building a good team. Bellingham and Mbappé have years ahead of them. They are not just players for a couple of seasons.”
The Severity of Barca’s Financial Mess
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It seems tough to measure the extent of the financial mess at Barcelona. Ciria said that it was ‘very serious’. This is due to their cost overwhelming their revenue. And as that is in motion, the club is in monstrous debts in equivalence of billions. Roures also said that the major problem battling the Catalans is the interest they’ll have to pay on the loan they’ve borrowed. Based on Barca’s official accounts for 2023, the club seems to have a liability worth €2.7bn. This includes short and long-term debts, alongside finances for the new stadium.
When Ciria was asked to compare the condition in 2024 when Laporta entered the office, he said. “It is worse” and he continued saying “Because now we have sold assets, we haven’t had the sporting success we expected and in addition, the loan and credit repayment dates are much closer.
“Look, in 2021, we were looking at bankruptcy. That situation was solved, so in 2022-2023 things were better, but now, the financial obligations are bigger, and there are fewer assets therefore, objectively, if this was a company, we would say that Barça is weaker in terms of tackling a crisis now than [they were] in 2021.”
Probable Solutions for the Catalans
The first major possibility is the revenues they can generate from participation in the Champions League. This in particular the one they got from last season and the one for this season. Another option that may be difficult is the sale of players. However in this summer transfer window, not much has been done concerning sales. And to generate massive revenue the club will have to sell some big-name players. Players like De Jong, Araujo, and Fermin Lopez. But with few days left in the transfer window, only players like Marc Guiu and Sergino Dest have sold. However, Ansu Fati is still in the works.
Ciria spoke on possible solutions to the mess saying. “I am aware that the club is trying to sell more [LaLiga] television rights,” Ciria continued saying “They have sold 25% and can sell up to 24% more, which would be worth around €600m. Instead of making €1bn over 30 years, you get that €600m now and the investor makes €1bn. With 25% sold, the club loses about €40m per year, so if they sold 49% in total, it would be €80m lost in revenue each season.
“Another option is transfers, letting two or three top players go. [Ronald] Araújo, Frenkie de Jong, and Fermín [López], for example, and you raise €200m.
“Selling BLM or a stake in it would be a last resort, but remember if the board’s mandate ends with losses, they have to cover that themselves [per the club’s legislation], so they are going to sell whatever, right? BLM is a project that could bring in €400m. So [the message should be] ‘Don’t touch, don’t sell.’ It’s so productive. It’s the best strategical wing at the club in terms of making money.”
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