Down Debt

Barcelona are mortgaging their future on a quick resurrection

BARCELONA, Spain (AP) — Crippled by debt and fielding a squad no longer part of Europe’s top flight, Barcelona management decided there was only one alternative after seeing Real Madrid winning major trophies last season.

They chose to double down and spend, spend, spend.

Barcelona will enter the season with immediate hopes of winning after adding striker Robert Lewandowskidefender Jules Koundé and winger Raphinha to an uneven team made up of promising youngsters and several undesirable players.

But the three signings for more than a combined €160m ($163m) – making him Europe’s top spender in the offseason – come at an even higher cost that will weigh on the club for the next quarter century. .

With Barcelona set to end last season with a financial loss for the fourth consecutive year and no money to spend on transfers, club president Joan Laporta took a gamble that the only way to save the team and to avoid his seemingly unstoppable slide into mediocrity was to mortgage his future.

After receiving approval from club members Barcelona, ​​Laporta’s board has sold 25% of its Spanish league television rights for the next 25 years for 667 million euros ($679 million). The club quickly used this money to make a splash in the transfer market.

“It’s true that I would have preferred not to have to sell a percentage of the TV rights,” Laporta said this week from New York, where Barcelona wrapped up their pre-season tour of the United States. “But the situation was complicated and asked us to be brave and to make decisions, because football waits for no one and our fans, who are used to winning, deserve a Barca who can compete.”

The Catalan club’s shopping spree may not be over. He sold a 25% stake in his Barca studios production center for an additional 100 million euros ($102 million) on Monday.

The club has pledged a third of this much-needed income to new players, a third to savings and a third to repayment of debt which, despite efforts to reduce it, still stands at 1 billion euros (1 billion of dollars).

Sacrifice of future revenue comes after Barcelona sold Camp Nou naming rights. Europe’s biggest football stadium will be named after audio streaming service Spotify, as will Barcelona’s shirts in the season opener against Rayo Vallecano on August 13.

Laporta, who inherited a debt-ridden club when he returned to power last year also remained a strong supporter of Madrid president Florentino Pérez’s plan to create a Super League.

But even the Spotify deal and losing the salaries of Lionel Messi, Luis Suárez, Philippe Coutinho and Antoine Griezmann for next to nothing in return in recent years hasn’t been enough to balance the books.

Former president Josep Bartomeu’s mismanagement, combined with the impact of the COVID-19 pandemic, has left the club saddled with massive debt more than 1.3 billion euros ($1.3 billion) and the largest payroll in football.

Barcelona’s financial difficulties have, predictably, been accompanied by the downfall of their team.

Barcelona haven’t won the league title in three seasons, having won eight of the previous 11. The team haven’t won the European Cup since 2015, when they lifted the Champions League for the fourth time in a decade. He didn’t win anything last season after Messi left for Paris Saint-Germain.

All told, once-mighty Barcelona have become notorious for their economic mess, with the scandals involving Bartomeu despite his denials of wrongdoing, his inability to retain Messi, as well as humiliating defeats including a historic 8-2 loss to Bayern Munich.

For Laporta critics, it was only fitting that Barcelona announce the sale of their second TV rights package while the team trained in Las Vegas ahead of their friendly ‘clásico’ against Madrid, which Barcelona won 1-0. For some, like former England player Gary Neville, auctioning TV rights was going to cost the world.

“Barcelona are still chasing the Super League? That is why! A desperate (£1.2billion) debt-ridden club selling future revenue streams to spend on players today in the hope that it will pay off! Rolling the dice with a club giant,” Neville wrote on Twitter.

Laporta argues he had no choice: the alternative was only more losses, fewer fans and declining revenue.

Insisting on the need for unprecedented action in June, Laporta told fellow club members that when he took charge after winning the club’s elections in March 2021, the team was on the brink of bankruptcy.

“We were unable to meet the payroll. We were clinically dead. We restructured debt, cut expenses and drastically reduced player payrolls, but it still wasn’t enough,” Laporta said. “By finding new income and sponsors, we went from death to the intensive care unit, and now we can finally get back to normal life (after selling the TV rights).”

Yet even in the most favorable analysis, the decision is painful.

“From a financial perspective, it’s never good news when you’re selling assets,” economist Marc Ciria, who in 2015 was part of an unsuccessful presidential run by Laporta but no longer has any connection with the executive.

“Barcelona have spent (nearly) 125 years acquiring heritage, and TV rights are one of the few assets whose value is guaranteed. But it is also clear that Barcelona, ​​for their status, cannot afford to to have another season like the last.”

Ciria calculates that, without even including inflation, Barcelona have sacrificed at least 1 billion euros ($1 billion), starting with 41 million euros ($42 million) this season, in future revenue from television in exchange for 670 million euros ($684 million) now.

But, for Ciria, the biggest threat to Barcelona’s continued existence is inflated player salaries. He calculates that just to break even this season, the club would have to reduce its wage bill to 450 million euros ($457 million). It stood at 518 million euros ($526 million) before the latest signings, which also include free agents Franck Kessie and Andreas Christensen.

Barcelona are also under pressure to reduce their wage burden so they can meet Spanish league financial rules and be able to register their new players so they can play games.

Dani Alves, Adama Traore and Luuk de Jong all left after completing their deals, but among his contracted players he has an agreement to transfer Óscar Mingueza to Celta Vigo and loaned out Clement Lenglet and Francisco Trincão.

Barcelona want Frenkie de Jong to accept Manchester United transfer or take a pay cut. Martin Braithwaite, Samuel Umtiti and Riqui Puig have all been left out of Barcelona’s squad for the trip to the United States and the club want them gone.

Last season, Barcelona were knocked out of the Champions League group stage for the first time in two decades. He finished a distant second in Spain ahead of Madrid, who also won the European Cup only to increase the frustration of Barcelona fans.

The additions of a world-class goalscorer in Lewandowski, a top young center in Koundé and the flare-up in Raphinha should provide coach Xavi Hernández with what he needs to improve a squad made up of midfielders. Spanish ground Pedri González (19) and Gavi Páez (17).

But a year after Messi’s wife handed him a handkerchief as he cried as he said goodbye For the club he helped grow, Barcelona are at a crossroads where it seems the only two paths forward are renewal or decline.


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