Barcelona look for financial ways out

Barcelona required loans to ease the pain caused by years of poor decision-making in the transfer market and extravagance on player salaries, all of which was exacerbated by a pandemic that shattered commercial and matchday income.

The idea, therefore, was to apply for a loan from a bank and use anticipated future broadcast revenues from playing in the Champions League as the security for the loan.

UEFA’s response was a straightforward “no” and European football’s governing body explained to the Barcelona official that they could not use several years’ worth of future Champions League television money as security because there was no guarantee they would qualify for the tournament in every season. This is because Champions League qualification is secured through sporting merit, rather than a birthright.

The Barcelona official was described as genuinely surprised by the rejection.

When approached this week, UEFA told The Athletic it was unable to comment publicly due to “the confidentiality of the process”.

This summer, the curiosity has, in places, developed into envy and resentment, as Barcelona spent a combined €140million (£117m, $142.8m) to sign Brazil winger Raphinha from Leeds United, Poland forward Robert Lewandowski from Bayern Munich and France centre-back Jules Kounde from Sevilla. They also picked up Andreas Christensen and Franck Kessie from Chelsea and AC Milan respectively on free transfers.

Last August, club president Laporta gave a press conference in which he revealed a debt of €1.35billion (£1.13bn, $1.38bn) before outlining how the club’s salary obligations accounted for 103 per cent of income (even after Lionel Messi had left the club as a free agent once his deal expired) and said the club’s net worth stood at minus €451million.

A loan worth €80million had been taken out to cover player wages earlier in the calendar year. Another line of credit worth €550million had been required from Goldman Sachs to restructure the club’s debts.

The club, under their new president, are pursuing a different approach to returning to their former glories, instead heading down the route of activating several economic “levers” designed to inject cash into the coffers, fund new signings and get the good times rolling once more.

Barcelona have agreed to sell 25 per cent of their La Liga television rights income for the next 25 years to global investment firm Sixth Street. The first 10 per cent of this agreement is worth a total capital gain of €267million, while the figure for the rest has not been publicly disclosed but is understood to be worth over €300million.

This has divided opinion. Barcelona currently receive around €160million for domestic and international La Liga television rights, which means that, in effect, they will be giving up €40million next year (as 25 per cent of the TV rights), but this figure would be expected to rise or drop relative to increases or decreases in the value of La Liga’s broadcasting deals.

On Monday, while announcing the signing of Kounde (another who is not yet registered to play), Barcelona announced they had sold a 10 per cent stake of their Barca Studios production house to the blockchain-enabled fan token platform Socios.com, for €100million. That money, however, will not be presented in its entirety upfront.

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The Political Economy of Football V2

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