Barcelona is in serious financial difficulty, and that could spread across football

 

 

 

• Arsenal v Forest: watch the whole game again for free
• Arsenal maintain shooting record; ref ups the ante.

By Tony Attwood

As the Spanish season got underway at the weekend Barcelona’s preparedness didn’t look too bad despite the fact that they have quite clearly not only run out of money but also run out of places from which to borrow money, and run out of future earnings that they can sell.

True they lost 5-3 to Arsenal, but that was a pre-season match, and these are never a real test of the future.  And besides they then beat Real Madrid 3-0 in a friendly and then Tottenham Hotspur 4-2, although the latter perhaps that wasn’t very difficult.

But then, in the build-up to the first league match of the season, they said they only had 12 first-team squad members available, and one of those (Dembele) was about to up sticks and go to Paris St Germain.

This was (according to reports in the Athletic) down to the fact that they have made signings but have not been able to register Inigo Martinez, Ilkay Gundogan and Oriol Romeu.   Added to this because their financial crisis is such public knowledge other players in the squad have been unwilling to sign contracts that they suspect that the club will not be able to honour.  Those on that list are reported to be Ronald Araujo, Sergi Roberto and Marcos Alonso,

Barcelona’s first game this season was a goalless away draw with Getafe.  And that was interesting because for each of the last three seasons, Getafe have ended up 15th in the league.   The BBC’s rolling report called it “an ill-tempered and chaotic at times game… that felt like the longest game in the world.”

The problems Barcelona now have come from all directions but at the heart of the matter is the fact that Barcelona are suffering from the financial crisis that is swamping football.  Other countries are keeping Barcelona afloat by buying their stars (Karim Benzema to Saudi Arabia for example) and the club can’t replace him, because belief in their financial situation has dried up.

Barcelona are in breach of La Liga’s rules on salary limits and have been told that their latest wheeze – that of selling off the income from future matches and calling it present-day income isn’t allowable.

La Liga is very clear in terms of how much each club is allowed to spend on new players in relation to their income, and Barcelona have been merrily chugging along ignoring this.  (This of course is a different approach from that alleged to have happened at Manchester City where it is claimed that they have deliberately falsified the source of income to make donations from the owners look like earned income.)

This means that quite simply because of the more open and transparent accounting procedures in Spain, Barcelona have been told they need to cut around £175m from their wages bill forthwith.  They then increased this by about another £50m because it was found that Barcelona’s income projections were somewhat, oh what’s the word…. “exaggerated”.  

Their trick is simple: when Barcelona sell bits of themselves they often sell to companies that don’t really want to pay everything upfront.  After all, would you, if you were buying something for the future, from a company that had difficulty in the present?

So increasingly they sell their assets to companies whose financial base we might call “interesting” – although of course I make no allegations of wrongdoing anywhere.  It is just that when the buyers are engaged in some of the more recent fads in digital technology and cryptocurrency, it can be a good idea to be cautious.  Especially if the buying company is planning to pay for what they have bought “over a number of years”.   Will cryptocurrencies last “a number of years”?

Now a series of Germand and Dutch companies are said to be involved in making payments but the details of the deal (including how this affects how much Barcelona is allowed to spend on transfers this season) are still not available.   Also, the League has introduced a new series of arrangements to stop clubs forward selling their income to get around the Spanish FFP regulations – which is what it is alleged that Barcelona are doing.

It is all a continuing and ongoing mess – and it comes at a time when Barcelona are trying to catch up on years of stadium neglect.    La Vanguardia reported a “risk of fragments falling on supporters in walkways” a couple of years ago including pigeon nests covered in excrement inside the ground.

So why does this matter to the rest of football?  Well, if Barcelona’s finances do collapse it would leave mega-unpaid debts across football and a big hole in the international broadcasting agenda.  The ripples could reach everywhere, and will undoubtedly make it ever-harder for clubs to raise money.

It might also encourage some organizations that have loaned money to clubs to think again.  It is unlikely to remain just something affecting Spain.  Already there are tales circulating of clubs no wanting to sell players to Barcelona on the usual four-year payment schedule – and that is how it all starts to fall apart.