A billion debt and still buy expensive players. This is how FC Barcelona does it

How can a football club with a billion debt for approximately 140 million euros sign Raphinha, Robert Lewandowski and Jules Koundé? That’s a question that Bayern coach Julian Nagelsmann asked on behalf of many this summer.

The complicated answer makes it clear more than once that running a football club today big business is. “FC Barcelona has actually become a multinational,” said Ramón Franquesa (64), economics professor at the University of Barcelona, ​​at the start of his speech. “A company that does not shy away from completing very risky constructions. In that respect, the football product is not much different from oil, water or gas.”

Arnau Gonzàlez (42), professor of history at the Autonomous University of Barcelona, ​​agrees with Franquesa’s reading. And that, he says, is the problem. “FC Barcelona is a victim of its own democratic structure. It would make more sense if the club was a joint-stock company,” says Gonzàlez. “Now sporting, political and economic interests are intertwined. Drivers are held hostage by the system. Every decision must be approved .”

Also read: a review by Simon Kuper’s book about FC Barcelona.

The policy regarding Futbol Club Barcelona is ambiguous. For example, the stadium has been named shirt sponsor Spotify for 70 million a year. The back of the uniform is reserved for UNHCR, the United Nations refugee agency. Barça’s motto is still written in Catalan on the seats at the Spotify Camp Nou: I am a club (more than a club). FC Barcelona is formally in the hands of the 150,000 partners from the club. It dates from a time when FC Barcelona profiled itself as Catalonia’s stronghold. Something that stood for the identity of the Catalans. It went far beyond football. “In the past, it was a tradition for grandfathers to give birth to their grandchildren socio made,” Franquesa explains. “You went to the stadium with the whole family. That experience is slowly disappearing. The club increasingly caters to an international multimedia audience. And that requires a different way of thinking.”

The shirt sponsor was revolutionary

FC Barcelona suffered a record loss of 481 million euros in the 2020/2021 season. The debt rose to well over a billion dollars. In the eyes of the economist Franquesa, it is understandable that the FC Barcelona board is looking for new sources of income with the consent of the members. Just as shirt advertising and stadium sponsorships were once revolutionary. But now it goes on. For example, the club recently sold 25 percent of future TV revenue of 510 million euros for the American fund Sixth Street. Next year, FC Barcelona will receive approximately 200 million per year according to a new agreement from La Liga. The club must therefore transfer 50 million of this amount to the fund.

Barcelona president Joan Laporta can now submit black numbers, and also has money available for the big summer signings such as Raphinha, Lewandowski and Koundé. It mainly provides a little air. The club will again have more leeway within the financial rules of La Liga. The salary cap can be raised again. And the requirement that FC Barcelona can only reinvest a third of every new incoming euro in players is likely to be dropped. In other words: If FC Barcelona sells a player for 30 million, then the club can spend the full 30 million on signing players. All good news in the short term.

But as economist Franquesa argues, long-term consequences are difficult to predict. Assuming TV revenues remain the same for the next 25 years, Sixth Street will make a profit of €740 million. Money that would otherwise have gone to the club. “There are obviously funds that dare to take risks to invest in the football product. It’s a form of speculation,’ explains Franquesa. “Because no one knows what the TV market will look like in 25 years. Let alone what the value of the rights will be. That’s how it works in other economic sectors as well.”

The Catalan historian Gonzàlez points out that financial problems at FC Barcelona are of all time. He goes back to the period from 1931 to 1936. Just before the Spanish Civil War. “The club was almost bankrupt,” explains the professor. “The board came up with the idea of ​​acquiring some kind of shares partners to sell. In addition, FC Barcelona went on a tour of Mexico to raise money. And due to the construction of the Camp Nou, FC Barcelona again ran into serious problems in the 1950s. At that time players were being sold and the government was knocking on the door.”

It is no longer possible to knock on the door of the Spanish government. However, FC Barcelona will have to find other sources of income beyond the sale of the TV rights to register signings such as Raphinha, Lewandowski, Koundé, Franck Kessié and Andreas Christensen within the rules of La Liga. The same applies to Sergi Roberto and Ousmane Dembele, whose contracts have been extended. While FC Barcelona is on tour in the USA, the board is working on financial solutions. The sale of Frenkie de Jong could be an option. A transfer can bring 80 to 100 million euros.

Alternatively, the sale of 49.9 percent of Barça Studios for around 200 million euros would be on the table. Audiovisual productions are made for the club’s own media and rights holders. In addition, the partial sale of the subsidiary Barça Licensing and Merchandise is being considered. Logical options for the ‘company’ FC Barcelona, ​​says Franquesa. “Years ago I went to FC Barcelona with my son. When I was in Ghana recently, I saw boys everywhere in Barça shirts. So Barça has also become a global brand in merchandising.”

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