Barcelona teeters on the edge of financial collapse. How? Why? What? Err?

By Tony Attwood, king of the predictive arts, emperor of the future, master of the middle-distance, irony champion 2010, and knower of all sorts of stuff.

No one likes a smart-arse.  So I am preparing to be disliked.

FC Barcelona, who have just signed David Villa, is attempting to negotiate a  150 million- euro bank loan after falling behind with salary payments to players, (according to Bloomberg, one of the few sources of news that I would generally trust).

They hope to secure the loan in a few days, the new Barcelona President S Rosell has said.

“We have to finance our short-term obligations such as wages,”  he said, before adding the team also plans to sell defender Dmytro Chygrynskiy back to Shakhtar Donetsk for 15 million euros, 10 million less than it paid for him in August 2009.

Now that doesn’t quite seem to me to be good, well-planned, and well-thought-through transaction.  A bit like the Hleb deal in fact.

“Club members can relax,” Rosell added. “The club isn’t bankrupt.”

So, the question is, is that true?  And if so, what the hell is going on?

Last week, Barcelona said it had become the world’s biggest sports team by sales, overtaking Real Madrid. Revenue rose 16 percent to 445.5 million euros for the year to June 30 following its 2009 Champions League title. Net income was 9 million euros.

So how can it possibly be in trouble?

Until now, aside for the oddball characters who reckon that all of football is about to implode (that would be the Untold Arsenal staff), no one has believed that this will really happen.   Even though there is firm evidence that Liverpool has now been taken over by the banks who have forced in their own chairman with a remit to sell the club, and even though Rangers, champs of Scotland have suffered the same fate, there is a feeling that this can not be happening.  Big clubs don’t go bust.  It is not real.

Yet it is.

On June 16, Mediaproduccion SL, owner of the broadcast rights for the domestic league in Spain, said it sought bankruptcy protection – and that has hardly been reported anywhere.  (You might think of Setanta going bust, and before them the scurrilous idiots known as ITV Digital.  Add Setanta to ESPN to Sky and you have in footballing terms, Mediaproduccion).

Barcelona’s seven-year, 1 billion-euro contract with Mediapro isn’t secured by a bank guarantee, unlike Real Madrid’s deal.  While Barcelona has had assurances from Mediapro, concern over the contract remains.  A whole new hole might be appearing. Assurances are cheap.  Actually they are free.  You don’t need a licence to issue them.

Rosell also played down speculation that the club is poised to sign Cesc Fabregas.

He “denied adamantly” that there was any possibility of Barcelona paying 50 to 60 million euros for the midfielder. Publicity about the possible deal was “the worst thing that could have happened,” he said.

(If you find yourself choking on your beer you might want to stop at this point.  It gets crazier.)

Back in April football in Spain just about came to a stop because of unpaid wages.

Then in May it was stated that the 20 La Liga clubs, will be subjected to financial regulation by a new independent body established by the Spanish government to ensure that teams are living within their means.

Clubs won’t be allowed to spend more than 70% or 75% of their income on player wages or transfer fees under new proposals from Jaime Lissavetzky, the country’s secretary of state for sport.  The new plans are expected to be introduced in 2011.

The combined debts of Spain’s 1st division clubs is now €3.53 billion with only Barcelona,  Real Madrid, and Numancia showing a profit in 2008-09 season.   (For Barca this was an exception – the don’t normally show a profit).  Eight clubs in the first division are now in administration including Real Mallorca, which finished fifth in the league last season.  Real Mallorca are the latest to join the list.

So, how can Barca, who are giants and who made a profit in their last accounts, run out of money?

The issue is one of cash flow – and it is common to see companies fail not because of losses but because of cash flow.   You make a profit on paper, but simply don’t have the money in the bank to pay for things.  So you start borrowing.  And then you borrow some more.

Now when that happens the first thing you do is stop paying people to whom you owe money – like the contractors who print the programme, the firm that sell you bulbs for the floodlights – that sort of thing.

The point is that these people will be agitated, but they know that there are other suppliers out there, so they are anxious not to lose the trade.  So they don’t sue you – they accept that payment will be late.

So instead of paying the contractors 40 days after the bill comes in, you pay them on 50 days, then 60 days, and so on.  This is the first step of all companies with cash flow problems.   The second step is you ask the bank to extend your credit.

The third step is you start making people redundant (or in the case of Barca, you sell Yaya and ask Thierry if he wouldn’t like to go and play in the USA).

Only after all this is done, do you stop paying your staff – even for a day.

And that is what is going on here.  Barca must have been turned down by their banks at least once already, for it to have come to this.  They must also have delayed paying their suppliers until the suppliers are taking court action, and must have made everyone they can think of redundant.

And still they are short of money.

They are in the same boat as those big time operators Portsmouth, Cardiff City and Southend United.  And it is about to get worse, because they have no escape route.  33m euros for Yaya is ok, but it doesn’t really sort out the depth of crisis that Barca must have to have got into the non-payment of players situation.  Besides which the money may well not hit the bank for several years (remember how Barca still owe us for Hleb and Henry).

It also shows the truth about the Cesc situation.  The whole thing is puffery to answer Real Madrid who endlessly laugh at Barca for not being able to keep their children under control.

I wonder if Cesc would mind being paid late.

No reason to get excited

The thief he kindly spoke

There are many here among us who feel that life is but a joke

56 Replies to “Barcelona teeters on the edge of financial collapse. How? Why? What? Err?”

  1. Great article, if i was Cesc (presuming he has thought of all of these things) i would leave Barca well enough alone because soon they are gonna be selling their assets if they carry on like this and then Barca will be building again from the ground up….at least Arsenal is very stable and strong and can always build and build.

    Tony could you write an Article about Mancity (since you have been doing Articles about club finances) I am really interested in your view on what they are doing. I don’t understand them, they know the financial rulings are coming in and you have to be living within your means for champions league football, but yet they are spending the best part of £30m for yaya and paying him presumably £220,000 a week if reports are to be believed. How can they honestly get away with this financial doping………and also what effect will it have on the team. Yaya is FAR from a player that should command those wages and with the egos of Tevez etc how will it effect the team. Even his Brother how will he feel being paid a lot less than Yaya…will this cause sibling rivalry?

    I think Mancity really have shot themselves in the foot.

  2. Isn’t the idiot from Barcelona giving in to more publicity by mentioning the name Fabregas ? How many times has an Arsenal official or any Arsenal player mentioned the name Fabregas this summer ? All the publicity is coming from DUH!Barcelona.

    I really cannot see a boy as intelligent as Fabregas joining this group of fools, who have more money than sense – but they are more sensible than the banks who “give” them the money to waste in the first place. When the Spaniosh credit crunch hits home worst than what happend in Greece we will certainly know the main culprits – Real and Barkingmadder.

  3. How Much Barca own Arsenal for the sale of Helb and Henry? What is the interset for the sale, because when you request for paying thing in installment, there are interest charge right??

    Also If they sale Helb or henry, do Barca have to pay Arsenal first before using that money for themself.

    And lastly, Is it gentleman conduct or anything that make Arsenal never demand the payment? while BArcelona is banging Arsenal to sell Cesc on the cheap??

  4. if they want cecs its 60-80M in cash on 20 pound note 😉 not buy now pay later

  5. A profitable club like Barca can’t be in too much trouble. Since there is no competition in Spain, they could easily cut their spending and still finish second after Real, while making a big profit. The problem is ofcourse Real. Barca must stay just above bankrupcy to win the league. Those two clubs should make a gentlemens agreement to only spend 50% of their revenue on wages. I’ve never understood why Barca needs to break the bank to pay their players. Are they affraid that their players would sign for City, if they are not the best paid players in the world? Rosell has a fancy degree in economics, so he should know what he’s doing.

  6. Is it time that they bring in sponsorships for their jerseys? They can easily earn £20 million every year.

  7. Fabregas must consider carefully then. Fabregas is still young and play c coupe of seasons more for Arsenal before moving on. By then he is at his peak and will have big clubs knocking on the door. Why move now and gave Arsenal higher chances of getting at least 1 or 2 trophies in a season or 2. Provided our key players dun get injured at the wrong time….

  8. In addition to the now widely discussed issues of Cesc to Barca(we stole him, DNA, he loves Barca, is Catalan etc) I was thinking about the La Liga competitiveness, TV money deal and business side. If I remember correctly the Swiss Rambler in an article showed how La Porta had seriously increased the commercialisation of Barca during his tenure.

    If Read Madrid and Barca have just about maximized income in Spain, it follows they are looking for income growth potential in other overseas markets. It is here I am guessing Arsenal would be a very big threat to them as (I don’t having any figures) we continue to win fans over the world and with arguably similar styles of play. Barca’s Unique Selling Point is diminished against the Arsenal brand.

    So supposing for a minute their commercialisation savvy know that winning titles (especially CL) attracts X amount of new fans, this would be what they would have to keep doing in order to keep new money coming in. So if you are still following my drift, my conspiracy theory is that they have their scouts perminantly at Arsenal to try to destablise players and therefore club so that we never reach our full potential of winning everything because we will directly affect their brand and income.

    Cesc is very important to us this season, but this will not be the case in 1-2 years time due to other player’s maturity and improved finances. To me this explains why they admit they do not have money to buy or have a vacancy in midfield but still desperately pursue Cesc anyway this season. The bigger picture is to destabilise the Arsenal project, of course all of this is just my early morning opinions (can’t sleep). Cesc’s international star status would help revenues too, Iniesta & Xavi are great players but seem to lack commercial appeal – this probably is the straw that broke the camel’s back – a Catalunyan helping their close rival to succeed in so many ways!

  9. I think the reason that barca and arsenal’s vaulation of cesc are so far apart is they both have different views on the player,
    For arsenal (fans & club) cesc is our best player he represents what arsene has been doing for the last 5 years and he’s the best player to come out of this period. To barca he’s just gonna be cover for their central midfield. Who in their right mind would spend 50-60 mil on a sub. However can barca really think we will sell our best player so cheap?

  10. I don’t think Cesc will be going to Barca this season because he doesn’t like to be on the bench. He’ll probably 4th choice over there which i doubt he likes it.

  11. Hello Fifa, hello Uefa, hello Platini, hello Jean Luc Dehaene: are you listening? Then act and stop those c**ts from Barcelona in the way they are trying to get Cesc.
    And I will be going to Catalunia in a few weeks time and I know for 200% sure that I will not be visiting Barcelona and never ever will I give 1 euro to them in anyway.
    They still play great football but for the rest I begin to hate them just for the way they behave. And it really is not in my nature to hate someone that easy. But they are close to it now.

  12. Dark Prince: Frankly, when it comes to shirt sponsorship, Barcelona are a bit of a joke. Ever noticed the Nike tick on their jersey? Yeah, they may have Unicef on there, but that tick will be making them a pretty penny already.

    I don’t know about you guys, but the bookies still seem to think he’s off to Barca, which means there will still be good odds available on him to stay. I know I’m off to the bookies this afternoon!

  13. Tony, I may be late in this comment, but I really feel that this blog is rather too full of suppositions.

    I’m sure that you do have your facts right – where you state facts – but to include so many “must haves” is no more than guessing.

    I sincerely hope you’re correct, and I can foresee a world with few football clubs and many rich ex-footballers, but compared with your past blogs, this one is not good.

    At least we follow a club which appears to be trying to carry on correctly (wage ceilings, refusal to overpay when buying players). Long may The Arsenal continue so.

  14. Gooneraside, this is the sort of issue that Pompey were worried about during the offseason, so for Barcelona to have issues like this is absolutely massive news.

    The fact is that Barcelona cannot cover an ongoing cost. Yes, the summer is a period of downtime for football clubs, whereas wages still have to be paid, but other clubs budget accordingly.

    The fact that Barcelona can spend £30million odd on Villa and then be unable to pay wages just stinks of rank bad management.

  15. @Phil, Are you sure Barca bough Villa with cash, or just like they bough Helb and Henry, Installment which won’t be paid 3 year later

  16. Well, nobody can know for certain as we haven’t seen the paperwork, but Valencia were selling him due to financial issues. Stands to reason they wanted all (or at least most) of the cash up front.

  17. Phil I tempted to join you on that bet that cesc will stay.

    I used to admire Barca but their antics have put me off them for life.

    I think the ibramhimovic deal is the one that screwed up their finances, they paid way too much money for him and traded their best striker who had a phenomenal season scoring something like 34 goals.

    I thank god that maureen is at real madrid and with such a uncompetitive league maureen really only has to worry about the barca games, and in the big games maureen is second to none. By the time maureen has finished with them CSI will be looking for barcas DNA.

    Never thought I would be saying this but I am cheering the germans today, Well done to RVP for getting to the final Iam tempted to put money on him scoring, It just goes to show what we have been missing

  18. Tony, Phil, et al,

    Apologies if my comment gave the impression that I didn’t like the article, nor agree with it, because I did.

    My only cause for complaint was that “must have” (and “stands to reason”, for that matter) have no place in otherwise reasonable pieces of writing – facts and guesswork mixed together lead to the conclusion (usually misfounded, but jumped on by D and Gs) that the whole piece is based on supposition.

  19. Gooneraside, don’t worry about your comment didn’t come across as negative, we’re happy to have dissenting views here. No big deal.

    For me, the suppositions Tony makes are perfectly reasonable. Supposition doesn’t equal fallacy. If it is raining, I can assume I’m going to get wet if I go outside: I’m assuming, but that doesn’t make it incorrect.

    If Barcelona don’t have the money to pay wages after having sold £40mill odd worth of players in the past week in Yaya and Dymtryo then tey really are up shit creek. We’re not talking they’re a few million short as they misbudgted, we’re talking a whopping 150million euros. I just wish I had their accounts to have a look through.

  20. The issue with Barcelona is that they have a lot of liabilities, but not a huge amount of bank debt, though this has increased over the last 12 months following their frenetic transfer activity last summer and, of course, the purchase of David Villa a few weeks ago.

    So, in June 2009, their total liabilities were €489m, but they only had a tiny bank loan of €29m with La Caixa. Now, as at June 2010, their total liabilities have increased to €518m with the bank debt higher at €114m. Although I don’t have the full accounts yet, a contact has sent me a presentation issued to Barcelona members (albeit in Catalan), so these figures should be accurate.

    Interestingly, the bank debt includes a €57m tax credit, which may be linked to the provision booked last year for the Spanish tax authorities to cover irregularities in the 1990s, that I mentioned in one of my articles.

    As Tony says, Barcelona made a profit this year. In fact, they are consistently profitable. I can see from their accounts that they have made pre-tax profits for at least the last 3 years.

    However, that’s not the point. The issue is indeed one of cash flow and that suffers when you have high ST payables. Often, when clubs have problems with debt, it’s not so much the magnitude that’s the issue, but the timing of the repayments. This is why Arsenal’s LT debt is not a concern, but Liverpool’s ST debt is.

    My guess is that Rosell is looking to replace the short-term payables with long-term debt, as they need to pay outstanding fees to other clubs, tax authorities, etc. To a certain extent, they are also paying the price of their success on the pitch, as this has triggered hefty bonus payments to the players.

    Looking at Barcelona’s presentation, there are some scary figures that indicate the logical result of their player acquisition strategy: salaries have increased by 18% to €234m; player amortisation has risen by 32% to €71m. Barcelona’s wages to turnover ratio has also increased to 57%, though this is still a lot better than most clubs in the Premier League.

    The most threatening issue for Barcelona could the one that Tony mentioned, namely the problems at Mediapro, who are seeking bankruptcy protection. Strangely, Barcelona appear to have a different deal with Mediapro to Real Madrid with only verbal payment guarantees. Of course, there’s a broader danger here, as the other clubs in La Liga attempt to implement collective bargaining with its potential implications for the business model of the “big two”.

    I also wonder whether there is an element of politics here. Rosell was elected on a platform of sorting out the financials, so he is hardly going to say that everything is hunky dory once he’s put his feet under the desk. Furthermore, the new president might be getting all the bad news out of the way early in his tenure, so that any problems can be blamed on his predecessor. We see this type of behaviour time after time when a new CEO starts his job in a company in the “normal” business world.

  21. It beggars believe that Barca show blatant disregard for the rules by publicly tapping up Cesc. I hope and pray that Wenger and the board dig their heels in and refuse to sell. How on earth can we attract the best players if we continue to sell our best players. Cesc is by far our best, why further strengthen the scum Barca’s position and weaken ours?
    I Like many used to respect Barca, NOT ANYMORE!!!
    I hope they now go under!!

  22. Thanks for the info, the swiss Rambler, good to see some figures in there. Where does the tax situation come into all this? I heard murmurings that the Beckham Law was going to/has been repealed? Naturally such an action would lead to Barcelona’s wage bill going up substantially as players’ take-home pay fell as a result of the tax increase, and they ask the club to take up the difference.

  23. Those who are asking about Yaya Toure should think: ManArab are friends with Qatar, who are bidding for 2022.

    What better way to buy delegates than pay huge money to a West African star, eh??

    You can’t call it a bung this way, you see……..

  24. Swiss Rambler – as always I bow to your detailed knowledge of the financial situation, but I would like to stay with the issue that I mentioned: that if you are running a company you don’t run into staff payment problems until you have exhausted all other forms of finances.

    You know when people have to be paid – it doesn’t hit you as a surprise – so you can see when that money is going to leave your bank account.

    If you see a problem, the first step is to tell accounts to stop paying everyone else, and put those payments back a few weeks.

    If that doesn’t clear enough capital, you call the bank and say, “sorry guys, bit of a cock-up on the cash flow front, got to pay the lads, can you give us a short term loan to see us through. Oh and here’s a couple of season tickets for you and the good lady.”

    You only get to this sort of crisis after those sort of approaches have been tried and failed.

    So my question is: why is the bank playing hard to get? The answer is any or all of these…

    a) Football is now designated bad news and there is a blockage on all new money to football.

    b) There is a banking crisis as there is in the UK so no one lends anything to anyone.

    c) There is something even bigger and nastier lurking within the hidden elements of Barca’s accounts.

    I suspect all 3 three. But even if it is just one, Barca is screwed.

  25. @Phil,

    I don’t think that the tax amount owed has anything to dow with the Beckham Law. I don’t know for sure, but my guess is that it relates to ongoing disputes that Barcelona have been having with the Spanish tax authorities re image rights. They made large provisions in the 2009 accounts for this issue, so it’s possibly just time to actually pay the bill.

  26. Gooner Gal – your point is well taken. Firms always see income growth as potentially going on forever, and are taken aback when it stops. And I say that as a company chairman who has been guilty of just such a misjudgement.

    The current issue that is assaulting many big clubs is the growth in additional income through overseas marketing, be it TV, shirts, membership fees, computer games… It has grown enormously, but ultimately it stops growing.

    Real Mad and shirts – remember? Man U are basing all their future on this sort of growth (they cite some new technology not even invented yet). Chelsea with their “one in seven supporters worldwide supports Chelsea”. They are all getting carried away with this as the last source of new income, and it is simply not growing any more.

    In the end we all have enough shirts, enough TV coverage, enough DVDs, enough football.

    I love Arsenal, I go to every home game, I go to some away games and watch the rest on TV, I run this blog, I wrote Making the Arsenal, I am currently writing “Woolwich Arsenal: the Complete History”.

    I am not sure that I want any more.

  27. Phil,

    Yes, yes, I like your rain/wet analogy. But will the banks provide Barceloaner with the necessary umbrella? 🙂

    There again, even umbrellas cost money.

  28. Swiss Rambler: apologies for any ambiguity, my tax question wasn’t related to the tax issue you mentioned. I was more looking into the future and considering the implications for barcelona’s payroll is every player in their team went from paying 23% income tax to 40% and I was wondering if you knew any more on the rumours of the repeal of the beckham law than I do.

  29. @Tony,

    We can all speculate on the reasons for Rosell’s announcement.

    It may just be politics between Laporta and Rosell; it could be a negotiating tactic from Rosell to ensure that any bid for Fabregas is kept low; it could genuinely a short-term timing issue, as Barcelona await funds from the sales of Toure and Chygrynskiy or their TV deal.

    Or they could be genuinely screwed. If that’s the case, why is Rosell still talking about a huge transfer budget (€50m + €15m from Chygrynskiy sale + €24m from Toure sale, giving a total of €89m)?

    My understanding s that the credit request was initially reauested by the previous Barcelona board, but this assumed an increase in the club membership fee. Rosell does not want to push through this increase, so they have had to return to thebank with a new plan.

    Anyway, we shall see. My sources tell me that the loan will be signed on Friday.

    Your central point that Spanish football is facing numerous problems, especially with TV revenue, is undoubtedly true, but it would not surprise me if Rosell painted an altogether different picture in 12 months time (after the first glorious year of his presidency), though that might just me being cynical.

    Anyway they could always sell Messi to Manchester City for squillions …

  30. Enough about Barca, Man U and Liverpool’s finances.  I have seen many press stories about one of the main reasons for England’s failures at tournaments being because they do not care enough, as they are so well paid anyway by their clubs. Well that could be true apart from the fact that they’re not as good as they think and have had a number of coaches who’ve not delivered at the crucial time too. What are the main reasons for our inability to deliver when it really matters? The manager’s misreading of how to play, the formations, the lack of tactical know-how,team selections, substitutions, or an unhealthy cocktail of all of them? My own feeling is that we can boast all we like about how wonderfully we play, but that is very rare these days and only usually when we’ve got an early goal against inferior opponents. We’ve not played well and won in key games or against our key Premiership and European rivals for some time and the main reason is we’re not as good as we (Wenger, the players and maybe fans)think we are and we still do not have the passion, commitment and desire to do so. The mix of inexperience, shoddy misfits and few stars will not gel when the chips are down and this is down to Wenger’s mismanagement and deluded thinking that Diaby, Denilson, Eboue, Almunia etc will come good eventually. In big games we cannot carry passengers- we invariably do and until this is rectified by buying players with skill, experience and commitment, we will continue to flatter to deceive and come up short when it matters. So spare me the nonsense of how well Wenger has done with a limited budget, he’s spent badly and given extended contracts to dross in recent years.

  31. munaf – thanks for trying to derail a fascinating conversation. Sorry you failed so dismally.

  32. walter, did you get out the wrong side of bed this morning?!

    this cash flow issue is very interesting. its a real throwback to the recession at the end of the 80’s where ‘cash flow’ was a major factor in so many businesses going under. its a vicious circle that gets worse as time goes on. if you have to borrow to pay normal outgoings then those outgoings are costing you more than you budgeted for, so theres always less and less in the pot. also as soon as its known that you are suffering, the sharks come out. loads of small (and no so ) creditors will start hassling, even taking court action. then you stop answering the phone cos its always bad news, and so on, and so on……

  33. This does sound alarming but at the same time it may not spell doom for Barcelona. They have one of the highest if not highest income in the footballing world and are reasonably profitable too so a large part of the core business is sound.

    Clubs will be less liquid during the off season so they are most vulnerable to liquidity problems during this period. Barcelona can comfortably afford any new bank loan. This loan will merely see them through until the start of the season when they start receiving match day revenue again.

    Since the problem seems to stem from a lack of cash they need to reduce their outgoings which probably means lower wages etc. If Valencia wanted a large part of their David Villa deal paid upfront, which is very plausible considering their own financial problems, then that could have contributed to Barcelona’s current cash-flow problems.

    Saying all that, what is most alarming is the fact that Barcelona want to take a €150 million bank loan. That is a €150 million oversight! If it were merely a €30-50 million emergency loan it could simply be attributed to a miscalculation but the scale of the loan suggests there is something more a foot.

    The danger of Mediapro going bust will surely concern Barcelona too and if the company were to go bust, or fail to fulfil their contractual obligations, then that could cause serious financial difficulties in the future.

    In any case I think Barcelona will be fine so long as they start to show more financial prudence. They can’t keep spending like they have done in the past 2-3 seasons and will have to try to rein their excessively large wage bill. This may prove a bit more difficult as the Beckham Law has been repealed so the wages of foreign players will effectively drop causing them to demand wage increases to compensate. Barcelona will have to resist these demands as much as feasibly possible.

    Failure to do so and I can see Barcelona in even more financial strive in the future, particularly if Mediapro fail to pay their TV money which is a big issue in its on right never-mind the current cash-flow problems.

  34. What confuses me is the figure being talked about. 150m euros is not something to tide them over the summer, that figures represents 60%-odd of their total wage budget from the figures the Swiss Rambler quoted, which is more than just covering a couple of months wages…

  35. Monsta: if Barca couldn’t afford to pay for Villa as Valencia want, they like any other club should cancel the deal. If they can’t afford it, they can’t afford it. It’s a joke, it really is.

  36. apart from Ibrahimovic barca havent paid over the odds for any one in the past five years, Villa is superb value, that guy is quality, I think they have been pretty prudent they rely heavily on the so called prestige of playing for Barca that they screw clubs, if we sold Henry to anyone else we would have easily got £25 million but because Henry only wanted to sign for Barca we had to accept less,

    I think it must be all that money spent on testing players DNA,paying media, tapping up players, turning on water sprinklers

    Seriously I just think they will just have to do some cost cutting, many businesses suffer cash flow problems, if media pro go bust surely they can secure another deal, surely with their popularity they can attract more sponsors, and shirt sponsors like someone mentioned

  37. Munaf – there is a house rule on this site that says that you should discuss the subject of the article, not something else.

    As moderator / editor / general twirp, I try to be fairly relaxed about this, but your post earlier was so blatant that I now have to issue a card of a sort of yellowish tinge. Please do comment on the topic.

    Untold publishes anything from one to three articles a day, and there is often something there that would fit your subject area.

    Today for example we have the exclusive Billy the Dog McGraw interview with the England manager at

  38. Tony, Phil, Swiss Rambler: Thanks for the insights. Much better than all the “noise” we get from several other blogs. However, we are still in the dark on Cesc and the negotiating options available to Wenger/Arsenal.
    1. Can we report them to UEFA and what would we expect UEFA to do and how wold that be beneficial or counterproductive to Arsenal?
    2. Suppose Arsenal insists on bigger money than Barca wants and the negotiations breakdown but Fabregas turns around to insist on a transfer or seeks to buyout his contract – with indirect financial support from Barca, what can Arsenal do?
    3. Long term, how can Arsenal defend itself from its players’ harassment – of the magnitude that the club have had to endure over Cesc?
    4. Can Arsenal fans ever really love or trust Cesc again?

  39. With all this talk about financial problems all over big clubs in europe i think we are lucky to have arsene. At least we can be assured this club will nt turn 2 leeds, poutmnt,etc. Long live ARSENAl FC!!!

  40. Gooner80: it’s more the wages. Players such as Messi are on world record contracts and while their club is profitable, their player purchases aren’t covered by profits so whatever they do spend is beyond their means.

    FemDee – Cesc hasn’t said anything bad, so the fans shouldn’t have anything against him, I certainly don’t. He won’t buy out his contract as once tax issues are considered, it’s more expensive (plus all clubs have agreed not to use the option anyway). Barca can’t afford what we want, and that price won’t fall unless Cesc demands a transfer. He’s far too respectful of Arsene and Arsenal for that.

  41. If there is any real truth that Barca are serious about wanting Cesc, Arsenal have said all that needs to be said on the subject, end of. As for Cesc for not saying anything to quash these stories, he doesn’t have to, again Arsenal footbal club have given their answer which is his answer in effect. Why would he say anything to contradict the board’s message.

    On the other hand, should Barca get their way and Cesc does in fact go on the cheap, it makes perfect business sense for them. Cesc on the cheap, loads of money in shirt sales and then if it doesn’t work out they sell him on for double what they paid us. Stinks, doesn’t it.

  42. Phil
    July 7th, 2010 at 1:12 pm

    Monsta: if Barca couldn’t afford to pay for Villa as Valencia want, they like any other club should cancel the deal. If they can’t afford it, they can’t afford it. It’s a joke, it really is.


    It might of been possible for Barcelona to pay Valencia the full amount but still run into problems. Bit like if I had £30 in my pocket but used that money to buy your Arsenal ticket. I then go home only to find a final warning to a £150 bill but since I have no money I need to call the company for an extension and then get a bank loan/credit card to pay the bill. I can easily pay the loan back as my wage at the end of the month is £3000 but because I don’t have cash right at that moment I need to take a loan. The same principle could apply for Barcelona.

    Saying that, as you already stated, €150 million is excessive and this loan suggests they need more money than just a couple months worth of wages to see them through the summer.

    The Swiss Rambler did suggest in his blog that Barcelona do not have a lot of bank debt and their debts are with other trading partners. Perhaps, and since Barcelona have spent considerable sums of money these past few seasons, they want to consolidate a lot of these short-term loans into one big loan so as to reduce the cost of interest which will allow them more money to spend on player transfers/wages. It is all conjecture on my part so there is no substance to what I say; it is just a plausible explanation.

    One thing I also noticed in Rambler’s blog is that Barcelona only had €10 million in the bank as stated:

    “The Guardian quoted a net debt of €350m, which appears to be calculated from the total current liabilities of €360m, i.e. including €247m of trade creditors, less the cash at bank of €10m.”

    It is buried deep in this article:

    Considering their wage bill is over €200 million a year and they could have spent €40 million on David Villa it is quite easy to see how they used this €10 million in the bank. The biggest question is why did Barcelona take such a large emergency loan in the first place?

  43. The economics of Barcelona are simple.

    They can’t play the current players’ wages.

    But they can pay £80m in transfer fees for new ones, including the £35m reaped to date from getting rid of players they don’t want any more.

    From the printed words of the new Barcelona President.

    Well, they were printed in the Daily Mail, so you can read into that what you will.

    I guess they will be selling a few more assets this summer….and if Senor Rosell is wise, he will keep his trap shut until such a time as he has concluded business through legitimate Arsenal FC channels or has accepted that no deal will be done.

  44. In any case not paying wages suggest some considerable financial problems/mismanagement as the payroll is your highest priority creditor. If you can’t even pay your staff their wages then it is likely you can’t meet payments for any other bills as wages that is the last thing you want to stop paying.

    Probably some sort of long-standing problem that they have failed to address adequately particularly if you consider the scale of the emergency loan. Since it happened in the summer then it is likely this situation isn’t as grave as say Portsmouth who had cash-flow problems during the season when they were earning money. Then again beating Portsmouth’s situation isn’t exactly difficult…

  45. I am greatly enjoying the Barce situation as well as the other national Spanish (tax, economic) factors that will affect both Barce’s income and stability.

    Call me simple though, but I can only view the Cesc situation from an Arsenal point of view. Any deal that sees Cesc being sold to anyone would be a PR disaster for Arsenal and send a message about the club, the supporters faith in the youth system that would be reputationally damaging to the club, the brand and the confidence of the supporters.

    So… I would price Cesc at somewhere north of £80m to cover all of this damage his sale would cause. From a “what is best for the club” point of view, that is what he would cost. BUT, Arsenal being the well run, financially stable club it is, we dont need the money. Isn’t that a terribly brilliant position to be in?

    Ok, it might not get reported in BBC hotsp*r or Sly Sports that way, but its true. And we should really thank M Wenger/our board that we are NOT Barce, United or Liverpool.

  46. Phil, Rhys:
    In that case we can say that Arsenal are lucky to be better managed under Arsene and lucky that Cesc chose such a bad time (in financial terns for Barcelona) to indicate his wish to return to them. After this debacle, I cannot see him making such “noises” again in the next 3 or more years…
    STAND FIRM GOONERS! It is bound to boost our International status that Barcelona couldn’t and didn’t have its way with us – so casually and irresponsibly as they’ve been going on about it!

  47. A couple of points – maybe the loan includes cash to help pay for Cesc and does my memory deceive me or was there not something in the new UEFA financial guidelines about no club owing another for transfer fees for longer than one year? Perhaps the big clubs (especially the more cash strapped) are merely bringing this ‘rule’ forward by a couple of years and insisting on it now.

  48. Tell you what though. Real Madrid must be loving this.

    Think how we would be if it was the Tiny Totts. Think how we will be when it is (as it surely will be shortly) Man IOU,.

  49. I remember a player a couple of years ago saying about how in spain they got paid every 6 months, been looking for the statement online but haven’t found it. don’t know if you can share some light on the subject? Thinking back it might of been around 2006 time.

  50. This is such a great resource that you are providing and you give it away for free!! I enjoy seeing websites that understand the value of providing a prime resource for free. I truly loved reading your post. Thanks!

  51. Let us give a favor to Barcelona – they can give us Messi for 30 million for 10 years installment 🙂

  52. i love that last statement, brilliant. and it makes me happy to see that clubs cant get away with spending as much as they want on anyone

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