According to the Spanish publication, Sport.Es Barcelona will not have problems registering the signings for this season – which comes as a bit of a surprise. For Iván Cabeza, a prominent sports economist, claims that Barcelona is already “in a normal economic situation.” Which given the size of their debt is rather interesting.
Cabez states that he is certain that the ruling of the Spanish football authorities that Barcelona could only invest one euro in new players for every three they brought in from sales, in order to normalise their situation in relation to Spanish FFP rules, no longer applies.
And certainly, there has to be a rabbit pulled out of a hat somewhere, as Barcelona has spent 153 million euros (without counting the possible performance-related extras) in this summer’s transfer market. And not unreasonably the rest of Spanish football is still wondering how the club could have got out of what appears to be financial ruin, and now turned itself around.
Barcelona have signed Robert Lewandowski (£38.3m), Jules Koundé (£45m) and Raphinha (£49m) which is more than, according to Transfermarkt.
And the club has done this through the simple manoeuvre of selling the future assets of the club. So far these include 25% of the television rights of LaLiga for the next 25 years to the North American investment fund Sixth Street in exchange for 519 million euros, which represents an accounting capital gain of 667 million euros.
Of course, the insanity of the club’s position means they don’t get to keep all this money, and 100 million has immediately gone in repaying the loan from Goldman Sachs) but it does mean that FC Barcelona’s net worth has gone from minus 451 million euros, back into the positive. So under the rules it can carry on, and the suggestion is being made that Barcelona’s buying is not over yet.
Plus the club has other assets sitting in reserve in case it needs to top up the petty cash, such as the sale of 49% of Barça Studios, the club’s audiovisual production company – and there is a number of other players who could be moved on, should the need for yet more cash arrive.
But this fire sale of assets does not mean that Barcelona is a sustainable club economically because for that to happen the income of the club needs to be higher than the wages bill. Now I know that is a bit technical – at least it seems to be for Barcelona – but that is how it goes. If you pay out more in wages than you receive overall, the business does not last.
What’s more, the money gained from selling future TV rights (which has gone to pay debts) can’t be counted again in terms of this season’s income.
Which is where we come back to the final throw of the dice. As mentioned here before, Barcelona, Real Madrid and Juventus recently celebrated a victory over Uefa, as the Spanish court ruled that Uefa had no power to act against the founding members of the European Super League and Uefa must “terminate the disciplinary proceedings against the clubs and to remove the penalties and restrictions imposed on the remaining nine founding clubs.”
The clubs have now said that, “the case will be assessed by the European Court of Justice in Luxembourg, which shall review UEFA’s monopolistic position over European football.”
Meanwhile the nine clubs (including Arsenal) that backed out of the plan in the light of fans’ protests, have made a combined €15 million goodwill contribution to benefit children’s and grassroots football across Europe and have agreed to pay fines of up to €100m if they ever attempt to join an unauthorised competition again in the future, according to ESPN.
The view of the three rebel clubs is that “This monopolistic position (of Uefa)… is damaging football and its competitive balance… Financial controls are inadequate, and they have been improperly enforced. Clubs participating in European competitions have the right to govern their own competitions.
“We are pleased that going forward we will no longer be subject to ongoing Uefa threats. Our aim is to keep developing the Super League in a constructive and cooperative manner…
“We are aware that there are elements of our proposal that should be reviewed and, of course, can be improved through dialogue and consensus. We remain confident in the success of a project that will be always compliant with European Union laws.”
If the three clubs win in court, Arsenal and the others who have backed out, will either need to pay huge fines if they don’t go back into the competition or will face the wrath of their supporters if they do. Uefa however, will be scuppered and thereafter the position of Fifa will look very fragile indeed.
So for Barcelona it either loses the case and goes into liquidation, or the rebels that backed out (including Arsenal), will lose and have to pay substantial fines and damages. They can’t both win.
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