Lionel Messi is staying (for this season at least) and the controversial Josep Bartomeu has finally stepped down as president. So, all is hunky-dory in the world of FC Barcelona, right? Not quite.
The Blaugrana are amidst one of their worst financial crisis that could see the five-time Champions League winners become bankrupt at the beginning of next year.
Over the years, FCB’s financial troubles have often made headlines and the coronavirus pandemic has only compounded the Catalan club’s problems.
Barca’s total debt has doubled to a whopping €488m (Rs 4293 crores aprox). The club said they lost €47m in just match-day revenue as all fixtures are being played in empty stadiums. A further loss of €35m was incurred in sales at club stores, while €18m, which would have been generated from ticketing of the museum and Camp Nou tours, is also gone.
The first-team squad, on its part, took temporary 70% wage cuts in March while also making extra contributions to help protect the jobs of the non-playing staff at the Camp Nou.
Desperately searching for solutions to cut down their losses, the Barca board sold Luis Suarez, Ivan Rakitic, Arturo Vidal and Arthur Melo among others at the end of the 2019-2020 season. However, getting rid of the deadwood didn’t make much of a difference.
Barca shells out the highest wage bill of any football club in the world estimated to be around €190 million, which is draining its finances in absence of revenue. To put things into perspective, Messi alone takes home a paycheck of over €70m a year while Frenchman Antoine Griezmann earns more than €45m annually.
According to Catalan radio station RAC1, Barca needs to reduce its wage bill or else risk bankruptcy.
Star defender Gerard Pique has reportedly accepted a temporary 50% wage cut, while Frenkie de Jong, Clement Lenglet, and goalkeeper Marc-Andre ter Stegen have also agreed to temporary salary adjustments. But more needs to be done. Negotiations with other first-team members are on. The board wants players to cut their overall salary by 30% but with the clock ticking Barca needs to finalise things fast.
Prospective presidential candidate Victor Font has claimed the club is “technically bankrupt”.
“Barça is practically in a situation of economic bankruptcy. Technically, it is bankrupt. This situation puts the ownership model at risk. The structural decisions must be made at the economic level. The wage situation is critical, and it is something the board should be addressing.” Font said.
To make matters worse, Spanish newspaper Marca reported that a construction company, Muro Cortina Modular Renting (MCM), has gone to court, requesting the club to be placed into bankruptcy.
The company claimed the club owes them €3.5m. However, Barca has responded by alleging structural damage in the building work MCM was hired for.
Looking at this financial mess Barca finds itself in, one familiar with the club’s history feels the Blaugrana have come a long way from the days when they refused jersey sponsor deals.
Barca’s red and blue jersey is one of the most iconic kit colours in world football today. However, while their Spanish rivals Real Madrid signed their first jersey sponsor way back in 1982, Barca did not have a logo on its shirt until the 2006/07 season.
Abiding by their motto “Mes Que un club” (more than a club), Barca struck a historic deal with children’s charity UNICEF in 2006. In a powerful statement of goodwill, Barca would not only donate to UNICEF but also featured its logo on the front of their jersey over the next five years.
But in 2010, increasing financial debts forced the Catalan giants to sign a shirt sponsorship deal worth €150m (the most lucrative deal in football history at that time) with the Qatar Foundation.
As jersey branding rights became extremely profitable for revenue generation, the board continued to capitalise on it. However, to date, Barca sports the UNICEF logo, which has moved to the back of the shirt underneath the player’s name.
Despite signing lucrative shirt deals through the years and, Barca are staring at bankruptcy. This can largely be pegged down to the club’s reckless spending on players rather than seeking out talent from its famed youth academy, La Masia, that gave them the likes of Messi, Xavi and Iniesta.
Barca has spent over a billion euros on 32 transfers since the 2014/15 season, purchasing the likes of Philippe Coutinho (€157.39 million), Griezmann (€120 million) and Ousman Dembele (€116.39 million). All three of whom have failed to create an impact that would match their price tags.
After a horrible season that ended with an embarrassing 8-2 mauling at the hands of Bayern Munich in the Champions League, Barca needs a complete overhaul from its ageing squad, something new coach Ronald Koeman has acknowledged.
Koeman was linked with a host of players, including Eric Garcia and the Dutch duo of Georginio Wijnaldum and Memphis Depay but was unable to rope in the services of any of them due to the club’s financial struggles.
All eyes are now set on the January window but in order to able to afford new signings the club will need to sell players first.
Only time will tell how one of the most successful football clubs in the last decade wriggles out of this turmoil.