Barca's financial issues a blessing in disguise

Barcelona actually reported a pre-tax loss of €8m in 2024/25, though this was significantly better than the prior year’s €204m deficit, reports the Swiss Ramble.  This was largely driven by a steep reduction in exceptional items, which fell from €225m to €10m, mainly due to movement in economic levers. As a reminder, Barcelona had pulled these famous levers (“palancas”) to raise funds, albeit at the expense of sacrificing income in the future.

As it stands, Barcelona have made around €850m from pulling these financial levers, split between TV rights €665m, Barça Vision €112m and Personal Seating Licences €70m.  Looking at the five seasons between 2019/20 and 2023/24, Barcelona’s reported loss was €298m, but if the €842m gain from economic levers is excluded, the underlying loss would have been a cool €1.1 bln.  The good news is that on this basis Barcelona have actually posted profits in each of the last two seasons, first €20m in 2023/24, then €2m in 2024/25.

In terms of normal business, revenue rose €150m (20%) from €766m to €916m, which was very impressive, especially as they once again played the entire season at the Olympic Stadium. This was partly offset by a significant decline in player sales, which decreased from €81m to €12m.

The main driver of Barcelona’s revenue growth was marketing and advertising, which shot up €179m (47%) from €378m to €557m due to an “unprecedented” rise in sponsorship income and record merchandising sales, though this was reduced to €487m after re-classifying €70m personal seating licences to exceptional items.

There was also good growth in competitions income, which rose €33m (38%) from €86 to €119m, while season tickets and membership cards were slightly higher at €32m, thanks to the stronger on-field performances. Finally, broadcasting increased by €8m (3%) from €242m to €250m.

Based on the Swiss Ramble’s model, Barcelona earned €118m TV money for reaching the Champions League semi-finals, where they were eliminated by Inter. This was the highest of any Spanish club, ahead of quarter-finalists Real Madrid €105m, and much more than the other Champions League representatives, Atlético Madrid €87m and Girona €33m.  Barcelona have earned an impressive €444m from Europe in the last five years, though this was a long way below Real Madrid’s €606m.

Barca’s financial issues were not helped by a decline in their European earnings, which had steadily fallen from the €118m peak in 2017/18 to only €71m in both 2021/22 and 2022/23, when they failed to get out of their Champions League group, so the growth in the last couple of seasons is good news.

As a result of the stadium move, Barcelona’s attendance was only fifth highest in La Liga last season, much lower than Real Madrid 72,692 and Atlético Madrid 60,883. They were also below Real Betis and Athletic Bilbao.

Following the dramatic cut in Barcelona’s football wages in 2023/24, as a result of the board’s cost reduction plan, these increased by €31m (7%) from €432m to €463m last season.

Barcelona’s new found austerity was again in evidence this summer, when they spent hardly anything on new players. The most expensive signing was Roony Bardghji from FC Copenhagen for just €2.5m, though Marcus Rashford was brought in from Manchester United on loan.

A major issue for Barcelona is the growing financial debt, which increased by €268m last season from €1.183 bln to €1.451 bln, comprising €891m Espai Barça debt, €531m bonds, €16m short-term financial liabilities and €12m bank loans.   As recently as 2018, Barcelona’s financial debt was only €68m, but it is now the highest in Europe.

Notwithstanding yet another restatement, this was an encouraging set of financial results, as Barcelona are once again profitable (excluding exceptional items), while they have managed to significantly grow their revenue, despite playing the whole season at the Olympic Stadium.

The growth in sponsorships and merchandising is particularly impressive, while match day income will rise after the delayed return to the Camp Nou.

Indeed, Barcelona’s future will be dominated by the Camp Nou stadium development, which is a bit of a double-edged sword: on the one hand, it will generate substantial additional income; on the other hand, the club has had to take on a huge amount of debt to finance this major development.

The last few years have been characterised by pulling various economic levers, which have helped keep Barcelona going, though they have sacrificed a large slice of future revenue streams in exchange for a short-term fix.

It is to be hoped that this strategy has come to an end, given the substantial improvements in revenue, but you can never be sure in a club where the president has to be regularly elected by its members.

In a strange way, Barcelona’s financial issues have been a blessing in disguise, as it has forced the club to get back to its roots, which has led to the emergence of many talented youth products, who led the team to the double last season with the promise of more to come.