Has everyone at Barcelona lost their minds asks the Financial Times? That’s the question the footballing world seems to be asking as the Catalan club outbids Premier League rivals on players just a year after booking a near €500mn loss. At €150mn and counting, no team has spent more on transfers this summer in Europe.
The moves have been financed by the sale of
long-term broadcast rights and a chunk of Barça’s audiovisual studio. There are
some who accuse the club of mortgaging the future in a desperate bid to compete
in this summer’s transfer market. High spending is, after all, what got Barça
into last year’s financial mess.
But there is a counterargument. Having been booted out of
the Champions League last
year in the group stages, the club really had little choice but to act, and act
fast.
In a pattern seen across sport, the value of the Champions
League rights has been rising rapidly. Uefa is aiming to double the revenue
from its US broadcast deal during the current bidding process, potentially
bringing in more than $2bn over six years.
For Barcelona’s finances to improve, it needs a slice of
that money. And spending money on expensive players is the quickest and most
effective way to make that happen. Those at the club liken it to turning around
a supertanker, which helps explain the speed and scale of both the asset sales
and the spending.
The new signings have come at a price.. All of them will
have to fit into a new and one assumes more modest salary structure.
That the club was able to raise 10-year debt last summer at
under two per cent is a marker of its financial flexibility and the strength of
brand Barcelona. But that brand is built on a simple fact: It is the world’s
most popular football club. It needs to win if it is to stay that way.
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