They’re one of the most famous names in world football, with a history full of glorious moments and some of the greatest players ever to play the game. Their nickname is even ‘Més que un club’ (more than a club), which sums up what they mean to the millions of their fans.
Yet the last few years have been some of the darkest in the club’s existence. Persistent financial problems have led to the sale of Leo Messi, their greatest ever player, and a freefall into vast amounts of debt.
The 2020-21 financial year saw the club record the biggest losses in their history, with chief executive Ferran Reverter saying that they were ‘technically bankrupt’. But how did this happen to one of the most prestigious names in the game, and can they get out this mess?
A debt of over €1 billion
Barcelona’s debt is incredible even by the standards of football’s money-obsessed world. Already owing close to €1 billion, in the financial year of 2020-21, they amassed further borrowings of €481 million, the most in the club’s history.
The officials coming into the club pointed to a culture where money didn’t seem to matter. Instead of cutting back on its costs, the previous administration spent more money in a bid to put things right, something that a person with problem gambling issues might do instead of a professional football club.
But how did their debt get so high? Well, there are three main factors: transfers, wages and the pandemic.
The two standout transfers are surely Ousmane Dembélé and Philippe Coutinho. Both signed in the 2017-2018 season, their combined transfer figures came to around €300 million, an eye-watering figure for any pair of players. To make things worse, both have suffered from extensive injury problems, particularly Coutinho who was even jeered by Barça fans on occasions.
It doesn’t end there. Antoine Griezmann for €120 million – who they recently agreed to sell to Atlético Madrid for a third of that – played well enough but did nowhere near enough to justify his incredible cost; while the likes of Malcolm, Arda Turan and Andre Gomes all failed to live up to their price tags.
With big transfers come big wages. Sports website The Athletic calculated their salary bill to be €520 million per season at its peak in 2019. This included star player Messi’s astronomical wages, thought to be around €140 million alone.
When the Covid-19 pandemic broke out in early 2020, it was the straw that broke the camel’s back. The club lost out on millions matchday revenue, in terms of ticket sales, merchandise and food and drink. While most big clubs had reserves to fall back on, Barça had very little. A world crisis made a club crisis even worse, which led to the club’s new management taking drastic action.
The sale of a legend
When Leo Messi declared his desire to stay at Barça forever in 2019, most fans believed him – and why wouldn’t they? The club had just won their 26th La Liga title, and there was very little public talk of their financial worries.
Fast forward 18 months, and the picture was very different. Barça were on the brink of the unthinkable – selling their greatest-ever player to a Champions League rival, PSG.
The deal sent a shockwave through not just the club, but the city, too. It meant that for the first time since 2003, the club would be facing a season without their icon.
No amount of money could compensate for that – which was just as well, Barça didn’t get any money for Messi: they just saved his eye-watering wages.
How Barça survived and their road to recovery
So, with Barcelona FC in such a horrific financial situation – how on earth are they not bankrupt? Clubs have gone under with much lower levels of debt in the past.
The simple answer is the club’s status as a ‘registered association’. Unlike a limited company, it’s not possible to buy shares in the club, only memberships. Barça, then, are not subject to the same insolvency measures as a Public Limited Company (Plc). Even the new chairman Joan Laporta said that if the club had been a Plc, it would have been dissolved a while ago.
Another measure that has secured their short-term future is a restructuring of the club’s debt – the driving force behind the Messi sale. It also means that Barça have to commit to a much lower wage ceiling, thought to be around €160 million – a little over a third of their previous figure. Existing players have agreed to drastic pay cuts, and new signings must fit into the structure.
The club have also radically altered their player recruitment policy. Gone are the hundred-million-Euro signings to be replaced with a focus on La Masia, the club’s youth academy that has been a conveyor belt of talent in the past. It may not be a bad idea: 18-year-old Pedri was one of the star players at Euro 2020; Gavi, almost two years younger, has just made his debut for the national team; Riqui Puig, Ilaix Moriba and Oscar Mingueza are other recent graduates.
Joan Laporta put the academy at the centre of his plans for the next ten years. It might be difficult for Barca fans to get used to, but it looks like the only way back to the glory days of yesteryear for the Catalan club.
