Barcelona undoubtedly has the best academy in the world. La Masia has produced countless super stars that have graced the world stage and have got them out of some serious financial and football trouble. I have previously covered how academy players count as ‘pure profit’ in the accounting books, which mean that whenever Barcelona is in financial disarray, they can use one of these assets to alleviate the struggles. Not only this, but when Barcelona is handicapped in the transfer market due to spending impower, they can look to one of their own to step up on the pitch, ensuring that they have the squad depth to be able to compete at the highest level.
So how did they get here?
The previous president Josep Bartomeu paid his players incredibly handsomely and spent huge amounts of money. There were 3 £100 million transfers during his tenure (Griezmann, Dembele and Coutinho) and Messi was reported to have an annual salary of around £100 million. Covid then heavily impacted revenue streams, and without matchday income forthcoming, Bartomeu left the club in€1.35 billion worth of debt.
A new dawn for the presidency
Joan Laporta returned to the fold and struggled to take control of the spiralling debt – this started with Messi being sold to PSG. In heavily publicised terms, Barcelona have often resorted to pulling financial levers in order to stay afloat, selling future revenue streams and parts of the club, raising around €800million. They further borrowed in order to renovate the Camp Nou, but this has led to an estimated €150million loss in matchday revenue having to play in a smaller stadium. €200million of investment was promised from partners at Socios.com and Orpheus Media. They launched a new club subsidiary called Barca Vision with an NFT collection and a metaverse. As part of a newly conceived Barca Media brand, containing digital and audiovisual production activities, investors wanted to float this spin-off company on the NASDAQ stock exchange, valued at $1billion. Barcelona had included this money in their budget calculations! This plan sadly fell through, and most of the money promised also never arrived. The club have now sued Libero for payment of €40million owed.
Yet, the team continues to grow and the board have spent money on several stars since, most notably Lewandowski, Dani Olmo and Raphinha. Cumulative losses stand at less than a billion over the past three financial years.
La Liga and UEFA challenges
La Liga has financial rules in place and salary limits – if this is breached then clubs cannot register any new players; they have told Barcelona that its use of the financial levers did not count towards the salary limit, and thus Barcelona are in a tricky situation.
As a result, Vitor Roque and Inigo Martinez are not currently registered – Roque cost £30 million but the deal is reportedly worth £61 million. In shocking news this year, it came to our attention that the Spanish star of the Euros, signed to FC Barcelona, could not be registered. Dani Olmo could not show why he was worth the hype.
As a result, the club have frantically tried to ease their wage bill and sell sell sell! This has proved difficult to do with the higher earners due to injuries to key players. However, they were able to offset certain individuals, and have been negotiating with their current commercial partners, Nike & Spotify to further invest in their kit and merchandise.
Barcelona have announced a new shareholder in Barca Vision, Aramark, and a new partner in the stadium rebuild. This is hopefully a needed injection of cash. There are however, still holes in their accounts.
UEFA have added to the list of Barcelona’s enemies by fining them half a million euros for “wrongly reporting” the “disposal of intangible assets” in its accounts for the 2021-22 financial year. Again, they did not count the financial levers. This presents a further issue as yet again, Barcelona included €600million worth of lever funds!
If they are seen to have breached financial fair play rules, they may be excluded from the Champions League, culminating in further losses of revenue streams.
Conclusion
Olmo has now been registered, but the situation looks bleak. The fact that they continue to seek the signing of Nico Williams from Athletic Bilbao is startling considering their financial means, and the repayments that will be initiated following the move back into Camp Nou will be sizeable. They are already paying €40million a season from their domestic TV revenues to U.S company Sixth Street as per a condition of utilising a previous lever.