Barcelona’s Financial Maelstrom: A Struggle to Stay Afloat
In the ever-turbulent waters of football finance, few stories captivate the world quite like that of FC Barcelona. The club, a titan of European football, has seen its financial health spiral out of control over the past few years. As Barcelona attempts to navigate this financial quagmire, questions abound: How deep is the financial hole? Can they afford new signings? What does the future hold for one of the world’s most storied football clubs?
Origins of Financial Disarray
Barcelona’s financial turmoil can be traced back to the presidency of Josep Maria Bartomeu, whose tenure was characterised by exorbitant spending and questionable financial decisions. Under his leadership, the club’s wage bill soared, with Lionel Messi earning over €100 million annually before taxes. This was compounded by lavish transfer fees spent on players such as Philippe Coutinho, Ousmane Dembele, and Antoine Griezmann—signings that failed to deliver on their immense price tags.
The onset of the COVID-19 pandemic further exacerbated the situation. With the Camp Nou closed for a year, matchday revenues—a vital income stream for the club—dried up. By the time Bartomeu was ousted in October 2020, Barcelona’s debt had ballooned to a staggering €1.35 billion.
Laporta’s Financial Levers: A Gamble on the Future
Taking the reins after Bartomeu, Joan Laporta faced a monumental task: saving Barcelona from the brink of financial collapse. One of his primary strategies involved activating so-called ‘financial levers’, a term that has now become synonymous with Barcelona’s attempts to stave off bankruptcy. These levers involved selling off future assets, such as TV rights and stakes in the club’s business ventures, raising over €800 million. This inflow of capital enabled the refinancing of many loans inherited from Bartomeu’s regime.
However, this strategy is not without its risks. In April 2023, the club borrowed an additional €1.5 billion to begin the long-overdue renovation of the Camp Nou, a project that will force the team to play at the smaller Montjuic stadium for at least 18 months—resulting in an estimated €150 million loss in matchday revenue.
Spending Continues Amid Financial Turmoil
Despite the financial strain, Barcelona has continued to flex its financial muscles in the transfer market. The departures of Messi and other high earners did little to curtail the club’s spending spree. Since then, international stars like Robert Lewandowski, Ferran Torres, Raphinha, Jules Kounde, Ilkay Gundogan, and Vitor Roque have been brought in. This summer, Dani Olmo is poised to join from RB Leipzig in a deal worth €60 million.
The financial cost of these acquisitions is stark. Excluding the money raised from financial levers and loans, Barcelona has recorded cumulative losses nearing €1 billion over the past three financial years. Critics, including Victor Font, who ran against Laporta in the 2021 presidential election, argue that these policies have not addressed the club’s underlying economic issues.
The club’s financial constraints have also affected player registrations. Last season’s captain, Sergi Roberto, has been in talks to extend his contract, but the club is unable to add his wages to the payroll. Likewise, Barcelona is currently unable to register Olmo, one of Spain’s standout performers at Euro 2024.
Scrambling for Solutions
Faced with an unsustainable wage bill, Barcelona has been forced to explore various means to raise funds. The club has already offloaded several players, including youth products Chadi Riad, Marc Guiu, and Estanis Pedrola, generating around €20 million. Meanwhile, others such as Sergino Dest and Marcos Alonso have left the club, further easing the salary burden.
However, the club is still burdened by the hefty salaries of players like Ansu Fati and Clement Lenglet, who have returned from loan spells and are automatically registered for the 2024-25 season. Additionally, injuries to key players like Ronald Araujo and Frenkie de Jong complicate efforts to sell high earners.
In recent weeks, Barcelona has been pursuing alternative avenues for generating revenue. One such move involved leveraging the club’s kit and merchandising activities, with an eye on renegotiating their deal with Nike. After attempts to end this contract were blocked by a U.S. court, the club explored the possibility of bringing in existing partners such as Nike, Spotify, or catering giant Aramark to invest in the Barca Media project—a venture linked to the club’s “Web3, NFT, and metaverse” ambitions.
Barca Vision: A Complex Financial Web
The Barca Vision project is one of the most intricate components of Barcelona’s recent financial manoeuvres. Initially launched as Barca Studios in the summer of 2022, this venture attracted a €200 million investment from partners like Socios.com and Orpheus Media. In June 2023, the club rebranded the project as Barca Vision, incorporating it into a larger Barca Media brand that encompassed all of the club’s digital and audiovisual activities. Plans were made to float this spin-off company on the NASDAQ stock exchange, with a valuation of $1 billion.
However, the NASDAQ flotation collapsed, and much of the promised investment from Socios.com, Orpheus Media, and new partner Libero never materialised. Barcelona has since initiated legal action against Libero in the German courts, seeking to recover €40 million they claim is owed.
The collapse of the NASDAQ plan has created further complications. La Liga had factored the Barca Vision money into their 2023-24 budget calculations, and its absence contributed to a significant reduction in the club’s salary cap last year. Barcelona’s 2022-23 financial accounts still list the Barca Vision spin-off as an asset worth €400 million, a valuation that now appears highly optimistic.
In a bid to plug this financial gap, Barcelona recently announced that Aramark, their catering supplier, had become a shareholder in Barca Vision and a new partner in the Espai Barca Camp Nou rebuild project. While the financial details were not disclosed, it is widely reported that the deal will bring in €40 million, covering the shortfall from the Libero investment.
UEFA’s Watchful Eye
As if Barcelona’s financial woes weren’t enough, UEFA has also taken notice. Last July, the governing body fined Barcelona €500,000 for “wrongly reporting” the “disposal of intangible assets” in its 2021-22 accounts—a move that could have severe consequences for the club. European football’s governing body did not accept the inclusion of lever money in a club’s break-even calculations, a decision that led to the fine.
Barcelona appealed, but UEFA upheld the punishment in November. This precedent is alarming for the club, as its 2022-23 accounts include roughly €600 million from financial levers. Without this, Barcelona’s losses for the year could be the largest in European football history.
UEFA has punished clubs for breaching financial fair play regulations in the past, with Juventus recently being excluded from UEFA competitions for a similar offence. Reports in German media have suggested that Barcelona’s financial irregularities could result in exclusion from the 2024-25 Champions League, a claim that UEFA has yet to confirm.
A Uncertain Road Ahead
As the summer transfer window draws to a close, Barcelona finds itself in a familiar position: scrambling to balance the books while attempting to strengthen the squad. The club’s financial situation remains precarious, with further player sales likely before the transfer deadline. There is still hope within the Camp Nou that a creative solution will be found to register Dani Olmo and possibly trigger the €58 million release clause of Athletic Bilbao’s Nico Williams.
Looking ahead, Barcelona’s financial stability hinges on the successful completion of the Camp Nou renovation, set to partially reopen in December 2024. This project is vital for boosting matchday revenue, a critical component in the club’s financial recovery. However, the repayment of the €1.5 billion loan—secured at a time of high-interest rates—looms large, representing another significant challenge.
As Barcelona attempts to steer through these financial storms, one thing is clear: the club’s financial future is far from secure. The actions taken in the coming months will be crucial in determining whether Barcelona can restore its financial health or continue to teeter on the brink of crisis.
