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Barca’s chaotic finances – now at last the truth emerges

By Tony Attwood

You might remember how Barcelona have boasted about making money, having no problem with cash, and winning things at the same time, and all that sort of stuff.

Why can’t we be like that, cry the anti-Arsenal Arsenal.  Well here’s why.

I had the temerity to put up an article “Barca on the edge” in which I argued that this was far from being the case.

In my piece I quoted work prepared by Professor José María Gay, the head of the University of Barcelona’s economics and business unit who investigated  Barce’s 2009-10 balance sheet.  Wage costs (he said) have risen 55% from their 2008 level to €262m (£220m).  But (and this is the big point) the club’s stated revenues have risen 33% over the same period, meaning wages now account for almost 64% of income.  Not terrible, but not good.

The key point however is that the club’s short-term debt of €392m (£329m) far exceeds their working capital of €110m (£92m) and “even hints there could be a risk of default during the current close season.”

Now there was the usual annoyance at this prognostication, for we are talking about God’s team here.  God’s team does not go bust – just like Liverpool and Man U don’t go bust.  God’s team never gets itself into a position in which it can’t pay its players.

Anyway all these figures looked very odd given that the noise coming out of everywhere else in Barcelona, with everyone saying that they were making bumper profits (as they should what with having won everything) and that everything was hunky dory.

And besides Barca is owned by the fans, so everything must be good.  The fan ownership model is exactly what the government wants for this country.  Put the fans in charge, they know what to do.

Well…

Now it seems that fans can screw up too. Those profits didn’t exist, and the figures presented were fake (or unaudited, as those who created them would undoubtedly say).

The audited figures show that Barcelona lost more than €77m (£64m) last season as opposed to the £9m profit reported by former president Joan Laporta.

The new audit shows that Barcelona had an income of €408.9m for the 2009-10 season, but costs amounting to €477.9m, and although I am no accountant I reckon that is not good.   Further spending of around €8m means the overall loss is €77.1m.

“The figures presented by the former board don’t reflect the real image. They have cheated,” the new man at the helm said.  “There is a structural problem. The sporting excellence in the last few years has not been reflected in economic excellence. The new board’s goal is to bring economic excellence alongside sporting excellence.”

Or, we could say, “We have done a Ridsdale.”

That may seem shocking – to compare the destroyer of Leeds United and Cardiff City with the progress of God’s Barça, buyers of Henry and Hleb and wannabe owners of Cesc.  But in fact Barcelona have taken the Ridsdale model (in which one borrows money against the future success of the club and uses it to buy the players who will bring that success) and instead of seeing it as the most chronically stupid thing in the universe, they have dressed it up as the way to make football perfect.

And when it all goes horribly wrong, they start having a fire sale of players.

So awful is the situation that Barça recently took out a loan of €155m after falling behind with the payment of player wages at the end of June. The central defender Dmytro Chygrynskiy was also rapidly flogged on to Shakhtar Donetsk to raise much-needed funds for the club.

But before the problems emerged Barcelona had already signed David Villa  for €40m and have ponced around claiming that they are willing to spend as even more to buy out Cesc Fábregas’ five year contract with Arsenal.  But the fact remains that they made one derisory offer and then have done nothing.  They know that they can’t afford him.

Although the refusal of Arsenal to deal has meant that Cesc stays with us, it also sadly means that Arsenal have stopped Barca falling into even deeper debt.

Of course none of this has emerged over night – just like Liverpool’s debt and Man U’s debt didn’t just suddenly happen.   But is has been hidden by the fact that journalists have generally been unwilling to admit what is staring them in the face.  That huge teams like Barca, Man U and Liverpool are utterly bust – and yet are carrying on with their old methods of buying players, because like a junkie, they have no idea how to stop.

For the English clubs it is the buy out that caused all the damage.  For Barca it is the dependence on TV money and the recklessness of the owners – the fans.  When the TV cash dries up, all hell breaks loose.

Of course the Anti-Arsenal Arsenal sites ignore all this stuff, and go on demanding that Wenger should go out and buy and buy and buy, and get Arsenal into exactly the mess that Barca are now in.

But what we are doing is exactly the right thing – keeping the money stable while clubs around us fall apart, or get trapped by new regulations.

——————-

Coming next – how Barca let it all happen: a review of their accounts leading up to the fiasco.

Also available: Analysis of Arsenal’s finances, and those of other top English clubs.

And what was it like when Arsenal went bust The story of our administration, and the rise from the tomb.

36 comments to Barca’s chaotic finances – now at last the truth emerges

  • Jonny

    It is a pity that the quality of the other teams in La Liga is now so poor that it is impossible to envisage a situation where Barca do not finish in a CL place.

    Were this to happen the idea of Cesc leaving would be ended immediately and Barca would be properly fucked up.

    I am heartened and pleased by their predicament but one imagines they’ll still be shrugging off the controversy next season and bidding big sums for Cesc.

    Let’s hope the Spanish economy collapses in the meantime -that make shake things up a bit for everyone – except you know who.

  • ondgooner

    If this is the case why are they still pursuing Cesc as a he-goat chases after the female kind when the heat is on? Idiotic arrogance or plain madness?

  • Zgooner

    “Anti-Arsenal Arsenal fans”

    You nailed it brother… I’m really happy to finally find an Arsenal fan that isn’t erratic and sold on the quick fix… so many Arsenal fans just don’t get it… MONEY is not how a great and sustainable football team is built..

    Thank you.

  • Dannyd

    Although iam delighted by barcas situation I can’t see the Spanish government let them go bankrupt S they draw to much tourism to the country, and as such can see them buying the traing ground for silly money only for them to hive it back to them like they did with real Madrid. Until the sport it governed by honest hardworking fans who don’t take back handers we will never truely know what goes on behind the scenes.

  • Fedda

    The fact that they have only made one “small” offer and continue to chase him in the media is maybe to make Arsenal fold to the pressure maybe make cesc hand in a transfer request or turn the Arsenal fans on him. Thats what I think. They are trying to decrease his value as much as they can, whilst players talking about cesc being on “loan” at Arsenal for one more season before he returns. It is all a big game for them. You can call it tapping up, but after spending several weeks with the barca squad in South Africa, I find it hard to believe they need the media to tap him up. It can’t continue for much longer though, barca are nearly out of squad players that hasn’t talked to the media yet.

  • Gooner 89

    You prick ! What do you mean anti-Arsenal Arsenal. So the rest of us who are sick of the club’s lies and mistakes are not allowed to have a voice without being called anti-Arsenal ? Wenger made £40m on the sale of Adebayor and Toure last year – is it wrong to have demanded that monies on player sale should be ploughed back to buy players to enable us win something for a change ? instead the money was used to cover up the club’s financial incompetence. Nobody is asking to spend £30 or £20 m on one player, but the way transfers are made at the moment go the other extreme. Surely £20m should be enough to buy an experienced cb and goalie ? That is all I ask for. Balance your story and stop creating dissent among Arsenal fans !

  • GroovT

    I can’t understand why Spanish newspapers are lying all the time. Every two days, newspapers as ‘Mundo Deportivo’ or ‘Sport’ or another one (like ‘Marca’ for Madrid), are saying that Fabregas, Rooney, Ribery and Vidic will sign at their club. The other day it is Cole (you can choose yours), Gerrard, Torres or the new top scorer.

    They are writing false stuff every day in Spain! Today an article in ‘Mundo Deportivo’ reported an agreement between Arsenal and Barcelona concerning Fabregas!

    Newspapers in Spain are creating rumors, in order to reduce the price of players! It is well known that these newspapers are in strong relation with boards of clubs at Madrid and Barcelona. If you do the same in the financial market, you can go in jail! Where are the regulators?

  • Great post Tony!
    You know, the more I see it the more I realize that this whole Cesc saga is just a strategy of Wenger & Cesc to avoid his move to Barca this season or near future. We all know that Cesc wanted to move to his hometown team (as he said several times), but not now, not at this very season. Barca is showing interest but Cesc don’t want to move right now. And what did he do? He talk to his (like a father) beloved Wenger. That where I believe Wenger agree w/ Cesc to will take control everything. This way Cesc won’t burn bridges w/ Barca and get out of this transfer windows (alive) and still in Arsenal.
    All this shows by the facts:
    1. Cesc first public statement that have talked to Wenger and leave his future to him
    2. His silence afterward
    3. Wenger statement that Cesc is not for sale
    4. Wenger turn down all Barca’s offer, he even reluctant to be in contact w/ Barca official
    5. All other news besides above fact is just a media blow up, not having real source or statement

    And now with this Barca collapse news, I think in the next season or two, even Cesc will think twice if he really wanted to move to Barca

    Cheers!

  • Tayo adeniji

    Cesc is going no where.we need him dis season. Up gunners.

  • oladoke paul

    I hate to sound like a broken record; if Barca has the right price for the playe let them pay and Arsenal will sell promptly.Handing in a transfer request does not automatically make the player theirs; they still have to pay the price. In a way, i think the la liga title is sub~standard to the premier league title~ only two teams can win it. It is a no~contest title and the two possible winners are largely unstable. The events that will play out very soon in Europe will see many hitherto big and unreasonable teams go under and create a ndw order. The big teams then will be the likes of Arsenal. Wenger will be vindicated for carrying on as he did.

  • Dark Prince

    Great Article Tony,

    With the new UEFA financial regulations coming in, it would be hard to see how they could afford Cesc even next year. €77 million losses is a big amount and it would be suprising to see how they turn this into profit in a couple of years time. For this they might have to stop buying players or atleast stop buying expensive players for 2-3 years. Or maybe who knows, they might have to sell Messi!! Whatever the scenario, they seem to be heading on Man U’s trail.

    On the other hand, it would be interesting to see what decision Cesc makes of all this. Because in 2-3 years time, either we would hav to sell him to any club or he will have to extend his contract. But thats a long way to go. Till that time i hope Arsenal can win some EPL and Champions league titles. Cheers!!

  • sameep

    How about a new name for Barcelona? They should be called BorrowLoana!!!

  • Lanz

    Omar, I still do not agree with this view of yours. I think that Cesc truly wanted to help Barca by crossing over this year, realizing that he will keep getting costlier. But its likely that when he discussed with Wenger, he estimated his own price in response to Wenger’s asking. With that figure in mind, Wenger can refuse anything lower withour offending Cesc. Remember too that Rosell said that they managed to hurt Arsenal through an incident of a few months ago? Probably something happened- a tap? Finally, Cesc first public statement was that he wished his future be sorted before the WC began. He said this right after the last games of the Premiership.

  • Abhinaba

    just answer why hvnt we won any trophies fr d past 5 seasons…….I Hate Barca…bt u cant deny d trophies d hv won……can u????…… as a fan i want trophies….d club economy comes 2nd……

  • Lanz
    His future did sort out before the WC when Arsenal release a statement that Cesc is our skipper and is not for sale. However, Barca keep thinking they can (and need) to move him this season by launching a relentless effort and media blow up that makes Arsenal decision seems not final.

    Well it’s just a theory that I think fit in.

    Cheers

  • Lanz

    Fine Omar. But don’t they really think they are smart & others, fools? They sold Toure for £27m or thereabout & expect to buy Cesc for £29m? The best playmaker in the world at present, going by the goals+assists per match records? How much would they sell Xavi? Yet, this boy has posyed better stats than Xavi in the last two seasons & is just 23! Nice day.

  • KenyanGooner

    @Abhinaba Club Economy 2nd could also mean:

    Win trophies for 2-4 years while buying anything that moves Man City style – then going bust when there’s no money anymore to pay the groundsman let alone your top striker.

    All I guess most ‘moderate’ fans want is ‘wise’ spending. Not beyond means but when needed and when the funds are available. I cannot presume to know the internals of the AFC accounts or Wengers thoughts but I couldn’t possibly presume to know more than the club regarding the financials and availability of potential players in areas of potential need (e.g. GK and Defence).

    Barceloanus tactics in trying to get CF4 are to say the least disgusting. Their soccer is good and a model to copy, but it’s all undone by this.

  • jeff

    any article coming from an arsenal fan,about barcelona, is no doubt biased. but those naive fans who believe whatever they read will love the article :]

    btw, i hate barca

    robin for captain anyone???

  • ideket

    Win a handful of trophies and go bust? Why? I’d much rather be us than them right now.

  • Rich

    I’m not a guy fluent in finance, but have some doubt that these reports will actually lead to anything meaningful (like what happened to Leeds as your post mentions) in the long term. I find it hard to believe that they would go ahead and spend a load on Villa knowing the reality of their financial stability being so tenuous without some kind of confidence that the power of the brand will prevail, no? And anyway, were things really to go bad, the city would bail them out no? Love em or hate em, they are a huge institution – who knows, maybe they can work a deal where they get some kind of corporate sponsorship without compromising their own sponsorship of unicef. Whatever their situation, ultimately, I am glad that Arsenal are (lets hope this stays that way) standing firm over Cesc, at least for this year.

  • scensy

    I, like most, am an Arsenal fan because I believe in the club- from how they play their football, to how they conduct transfers (although I do remember Wenger saying he had given up on Chamakh..), and beyond. Sure we haven’t won a trophy in a couple years, but I’d still rather be a gooner than a man u or liverpool supporter right now. We have young talent rising through the club that will pay dividends. Wenger’s an economist, examining every cost benefit analysis possible. Selling Eduardo while he still has some value was economical especially with Vela, Chamakh, and JET onboard. That money alone covers for Koscielny, who we all are weary of, yet I have a feeling one more CB is imminent.

    And with respect to our goalkeeping conundrum, I believe Almunia must leave as he believes he has the talent to be first choice (yet we all know he doesn’t). As was the case with Lehman, he doesn’t like to sit on the bench, which he would if he stayed. Our best goalkeeper is 20 years old. Too young? Casillas was made a regular first-team choice at Real Madrid at 18, Buffon at Parma at 18, Cech at Chelsea at 22, Reina at Liverpool at 23, Van der Sar at Ajax at 20, Valdes at Barcelona at 21, Cesar at Inter Milan at 25, and Igor Akinfeev at CSKA Moscow at 17. The average age is just a bit over 20. If Wenger really believes Szczesny has a world-class career ahead of him, then he should give him his shot. I don’t doubt the talents there, I doubt whether he can cope with the pressure.

  • 3rd-i

    Congrates mate… SPOT on

    Ive been reading ur articles a while now, but its the first time i comment.
    ive been saying the same years now, Wenger is a GENIUS.
    just to all glory hunters and doubters take a look around and see the mighty Man utd, liverpool & Barca falling apart while we are rising high.
    What Arsene did for Arsenal is just beyond description… this mans vision is unbelievable & unmatched.
    Building a staduim, training ground, brand name, amusing football style, nurturing great young talents, always qualified to the CL, winning 11 trophies for arsenal and most IMPORTANTLY
    preserving the economic stability of the club…

    But what makes me sad is that some arsenal fans get carried behind the AAA’s and forget what this GENIUS did, and what an asset he is for ARSENAL FC

    Arsenal & Arsene Fans

    Keep it up Tony

  • 3rd-i

    Congrates mate… SPOT on

    Ive been reading ur articles a while now, but its the first time i comment.
    ive been saying the same years now, Wenger is a GENIUS.
    just to all glory hunters and doubters take a look around and see the mighty Man utd, liverpool & Barca falling apart while we are rising high.
    What Arsene did for Arsenal is just beyond description… this mans vision is unbelievable & unmatched.
    Building a staduim, training ground, brand name, amusing football style, nurturing great young talents, always qualified to the CL, winning 11 trophies for arsenal and most IMPORTANTLY
    preserving the economic stability of the club…

    But what makes me sad is that some arsenal fans get carried behind the AAA’s and forget what this GENIUS did, and what an asset he is for ARSENAL FC

    Keep it up Tony, Thats what journalism is about
    another congratulation for ur insight & vision

    Arsenal & Arsene Fans

  • Abhinaba.
    Are you living in the real world.
    With that statement id say your in the top 2 percent of dumbest people that populate this planet.(being generous saying people)
    Just imagine that youve got a really nice house but your mantle piece is a bit bare so you go out and buy shiny things instead of living within your means.You got loads of shiny things on the mantle piece with borrowed money.No 1 you didnt really work for them,you just bought shiny shiny things,no 2 people wont take the shiny things back and pay you back the 400 million you forked out so you lose your house.
    My point is that probably allot of managers given Fortunes to shell out could probably win a cup or two,Possibly a league.It will be noted and people will move on,Wenger and arsenal will be remembered for what hes done.
    Hes to football what a new genre is to music.
    Hes investing in youth and trying to stop this landslide of player prices and not bending to pressure from so called arsenal fans.
    Im glad that the majority of fans want him to succeed and stuff it down those pundits(you wont win anything with kids)throats

  • kayonga ben

    Barca???????????????????????????? u make me laugh sometimes

  • Henry 16m at age of 29 Hleb 17m almost useless to them now 50m for Fab, Wenger simply bag the money if u get it as they continue to be bankrupt and as we glow.one day BArca will follow LEEDS United down hill if they are not carefull.

  • Shard

    @abhinaba

    Barca didn’t win anything between 1999 and 2005.

  • Ayor

    i am really happy reading this article, winning trophies is a good thing but not at the expense of club development. we are a club in the forming stage and one day we will see results.for CF4 he can go where his heart leads, we need true to the gene Mr Gooners(RVP) to lead the groove this season.

  • tman

    Who was it that said “Forgive the length of this letter, as I didnt have time to make it shorter”…You should listen to this advice – every thing you write is pebble dashed and cum shotted with needless words. Brevity is king, not reams of yawn inducing shite.

  • JImmie

    The article said If we sell Cesc to barca they will go bust. Why sell Cesc? Just demand full payment from sellin Henry and Helb should be enough. Barca already sold Henry, so they should pay Arsenal the outstanding before use the money right, and with Interest in region of 5% per years rightt (wow still have some banker DNA in Me)…

  • T2T

    First of all, I do appreciate a blog that isn’t on the buy, buy expensive band wagon.

    Second, sadly in La Liga, Barca and Real negotiate their own TV contracts; i.e. they do not “sponsor” the less popular teams. In EPL, although the more successful you are, the more you get – the bigger teams with a large fan base effectively support the smaller teams. Therefore, relatively speaking, both Barca and Real have an advantage over their competitors in EPL. Add to that the Spanish government supporting them financially, the stupid taxation of footballers in England and the relative value of £ vs €. Therefore, EPL clubs will find it increasingly difficult to compete.

    I support the new rules on finances in European football as well as the 25 senior players/8 homegrown. The introduction of both rules shows that AW has been right all along as Arsenal is in a very strong position on both fronts. Too bad the long period of adaption allows ManCity to do what they are doing know. It will be interesting to see the figures for salaries next year…

    Arsenal4Ever

  • Ulster Gunner

    Think Cesc deserves more credit than ppl give him. Barca new they couldn’t afford him, so adopted this media strategy and the incessant “tappings up” of the entire barc tem at the world cup. They knew they could only get him if he handed in a transfer request, on the cheap. He said no and barca knew they where f***ed. The comment about him beiing on loan for a year by Inesta, to me, sounds like VERY sour grapes. That’ll teach ghost boy to run his mouth off. bet all the barca scum involved feel very silly after their confidient crys of ” he’s ours, he’s coming”.

    Harden them, can’t wait till they go down the gurgler. thgo maybe we should get our cash of em for Titi and hleb first eh? lol

  • steww

    Another superb post.

  • Zulu Gooner

    Gooner 89 is a sorry fella! cheer up mate, unless you are a sp*ds fan

  • THE HARDWIC TUP

    i DONT THINK TEAMS LIKE MAN U LIVERPOOL WILL BE THE ONLY PREM TEAMS HAVING MONEY PROBLEMS OVER THE NEXT 2-5YRS.IAM INTERESTED TO HEAR ON THE SPURS REDEVELOPMENT PLANS FOR WHITE HART LANE IS IT HAPPENING UNDERSTAND THEY HAVE A BID FOR THE EAST LONDON OLYMPIC SITE IAM WATCHING WITH INTEREST SPURS ANOTHER NO MONEY SPEND BIG SIDE.

  • donkface

    pretty awesome article, floating in a sea of media turd.