By Iver Coupleoquid
According to Le Figaro, FC Barcelona are now desperately in search of even more cash to allow it to buy players. For just one week after it sold 10% of its TV rights, has now sold another 15%! Once again the buyer is the American investment group Sixth Street. The deal lasts 25 years. The 10% sale clocked in at €207.5 million.
The deal is aimed at enabling Barcelona to keep buying players for the rest of this transfer window and for the next window, given that they have already brought in Robert Lewandowski and Raphinha, respectively for €45 million (plus 5m in variables) and around €70 million respectively. After that, who knows?
The problem is that these players and any more they bring in will only last a few years, but the money they have spent is the money due from the next quarter century. This means that they need to be solvent in another couple of years. And there is only one way of doing that – winning the new Super League legal case against Uefa and the clubs that bowed out of Super League (including of course Arsenal).
Last August, Joan Laporta, who became Barcelona president, announced after an audit of the club’s finances that Barça had to face a total debt estimated at €1.35 billion. In addition to the sale of part of their TV rights, Barça took a €595m loan from Goldman Sachs and a sponsorship deal with Spotify for approximately €435m.
But there is a problem as Barça didn’t win the league last season either, finishing in second, 13 points behind Real Madrid, and only two points above Atletic Madrid. Their only hope for the coming campaign is that Real Madrid gets bored, or falls asleep, or sees their stadium disappear in an earthquake having forgotten to renew the insurance. Or a time distortion field.
So why is this sort of thing happening in Spain and not England, one may ask. Well, Spain applies the FFP rules with a certain amount of vigour, and Barcelona have this thing where the fans elect the new chairman of the club based on the players he says he will buy. Promise the earth and become president.
So although it was hardly desirable for Arsenal to slip down to eighth for two seasons, the loyal fans who have a grip on reality could see a rebuild of the club going on, when it was paraded in front of them. Also we were able to see a tactical change although the media utterly refused to recognise that either, although the profound effects that were there for all to see. (Another case of deadwood journalism).
So Barcelona’s administration is elected, and the elections are won by those who promise the biggest expenditure on new players. But ooooops, when Joan Laporta took control he says he “discovered” that the club was €1.35bn in debt.
Laporta said his administration had been forced to seek an €80m loan in order to pay players as soon as it took over after March’s elections, that they have since had to agree another credit of €550m in order to restructure debts, and that they are in effect bankrupt, with the club’s net worth standing at minus €451m.
And of course it is not the present regime’s fault, but the faullt of the last lot who seem to have scarpered.
Barcelona also say they can’t compete with what in Spain are known as the State Clubs (Paris Saint-Germain and Manchester City, plus soon, Newcastle). That’s probably true for the rest of Europe, and the rest of Europe could do with saying this to Uefa in a unified voice.
Also of course, like incoming governments, the new regime found the finances of the club in a far worse state than they realised. Oh yes, and the stadium needs urgent repairs. Apparently it’s not safe.
The club spends 103% of all income on salaries and the total debt is €1,350m. “To the initial €617m debt you have to add €389m on players, €90m in litigation, €79m in advance television rights and €56m from the [new stadium] project. In total, €1.35bn,” the Guardian quotes. But apparently, the incoming regime can fix it.
So that’s all right then.