Have Barcelona finally run of road?

Barca signing Dani Olmo for €60million in last year’s summer window and then potentially losing him on a free transfer five months later is one of the most dramatic and barely believable sagas at a top European club in some time.

It is also the sadly predictable consequence of the constant improvising and pulling of so-called financial levers that’s been going on at Barca since Joan Laporta returned for a second spell as club president almost four years ago.

The possibility of Olmo and fellow summer 2024 arrival Pau Victor’s La Liga registrations lapsing at mid-season was flagged well in advance. It’s just the latest example of how Barcelona have kept signing players during Laporta’s second presidency despite the club’s deep financial issues and without knowing if these recruits can be registered within La Liga’s strict salary cap rules.

Similar issues in multiple recent transfer windows were allowed to drift until the last minute, when increasingly creative solutions have been found to kick the can even further down the road. The problem has soon returned, and in an even more problematic shape.

Some of Laporta’s improvisational lever-pulling can be defended. Barca selling a part of their future TV rights to U.S. investor Sixth Street in the summer of 2021 was not too dissimilar from the arrangement La Liga itself organised for most of its clubs with the UK-headquartered CVC Capital Partners. 

Much more problematic have always been the levers tugged in summer 2022:  a process which Barcelona claimed would raise €200million. They sold shares in a ‘Barca Studios’ arm of the club to crypto company Socios.com and Orpheus Media, a firm run by Catalan businessman Jaume Roures.   The vast majority of that €200million has never arrived.

Through these financial twists and turns, La Liga has arguably been remarkably lenient, perhaps because its president Javier Tebas wants a strong Barcelona to help the league’s overall brand.  (As an outsider, albeit some of my family Spanish residents, the fact that they are leading ream in Catalonia may also be a consideration in Spain's complex regional politics).

Fans and pundits in Barcelona have — mostly — stuck with Laporta through all the drama of his second presidency, accepting that his charisma and creativity were their best bet to fix the deep financial problems inherited from predecessor Josep Maria Bartomeu. 

The situation became even more complicated in early October when Barca’s auditors wrote down a previous €400million valuation of the Barcelona Vision subsidiary (the latest version of the Barca Studios project). That meant a €12m profit in ‘ordinary’ trading in the 2023-24 accounts became a net loss of €91m. La Liga reacted by further lowering Barcelona’s salary limit — meaning even more new money was required to register Olmo and Victor past December 31.

Another lever was landed upon: selling future revenues from the VIP zones in the club’s under-refurbishment Camp Nou stadium at a discounted rate. This was classic Laporta: selling seats which do not yet exist in a stadium where his team cannot currently play because it’s still a building site to investors whose identities were not revealed for a price that was also unclear.

It was now clear that La Liga was no longer prepared to accept Barcelona’s word about their finances and needed to see written contracts and financial statements. Unlike with Barca Studios in 2022, it refused to accept the promise that the money would arrive. Barca reacted with an (unsuccessful) court challenge to La Liga’s registration rules, further damaging their relationship with the governing body.

Laporta’s bargain with Barcelona’s members — known as ‘socios’ — has always been that his schemes and levers would kickstart a ‘virtuous cycle’ with success on the pitch raising revenues, which will then further increase the team’s competitive level. It worked during his first term as president from 2003-10 — off-pitch controversies were quickly forgotten when the team won the Champions League in 2006, 2009 and again in the season after his departure.

The constant improvisation during his second term has now stretched the credibility of his leadership right to the limit. Or possibly beyond.  The ‘Olmo affair’ raises a very difficult question for Barcelona and club members: have Laporta and his levers policy finally run out of road?