In 2017 Barcelona had posted six straight years of profits, where wages were less than 60 per cent of revenue and where those revenues were growing healthily — up €164m and 34 per cent in three seasons.
Barcelona made a profit again in 2017-18, but its size,
considering it included a world-record fee for Neymar, was miserly. The club
booked a €20.1million pre-tax surplus but only after more than €200m in player
profits. Operating performance collapsed, from a €10.5m profit in 2016-17 to a
€176.8m loss
Before accounting for any of the other costs involved in
running a club of Barca’s stature, 81 cents in every euro were gobbled up by
football staff costs or the fees paid to bring players to the Camp Nou. And
those other running costs were and are massive. The club very quickly became
structurally unsound. In 2020-21, Barca recorded a €555.4million pre-tax loss,
by a long way the worst financial result ever recorded by a football club.
In June 2022, when Barca announced the sale of 10 per cent
of their La Liga TV money distributions over the next 25 years. The buyer was
Sixth Street, a U.S. investment group that paid €267.1million, then came back a
few weeks later and spent another €400.4m on a further 15 per cent of the same
rights.
In all, Barca forwent 25 per cent of domestic TV money over
the next quarter-century for an immediate boost of €667.5million. The first
sale to Sixth Street fell into the 2021-22 financial year, the second in
2022-23.
Barca sold a 24.5 per cent stake in Bridgeburg Invest, S.L.
— an entity set up by the club ostensibly to facilitate a partial sale of the
Barca Studios asset — to Socios, a blockchain-based platform. That generated
€100million, as did a second 24.5 per cent stake bought 13 days later by
Orpheus Media, a production company.
In conjunction with two share sales and the 15 per cent TV
rights disposal, it meant these various levers generated an €801.5m accounting
profit in 2022-23 alone.
The remodelled Camp Nou was meant to be largely finished
by the start of this season, but Barca are in a battle to reopen it, even at
reduced capacity.
In many other businesses, and at many other football clubs,
heavy cost-cutting and a shift away from financial largesse would have been the
order of the day. Not so in Catalonia, where, under the hand of Laporta,
in a presidential role where popularity is key to sticking around, Barca
instead opted to find ever more novel ways of raising money. Laporta faces
elections in 2026, and approval of his decisions will likely be made clear.
Barring a collapse in on-field fortunes between now and polling day, he is
expected to secure another term in office.
Getting the Camp Nou open and back to capacity as soon as
possible is of paramount importance.
Debts are massive and while that isn’t bad in and of itself,
the club’s grim past finances have undermined future confidence. Some
€424million of the Espai Barca debt was recently refinanced at a lower average
interest rate of 5.19 per cent, but that is still two points higher than the
3.2 per cent at which Real Madrid’s stadium debt is secured, for example.
It is too early to declare Barcelona a club recovered from
the depths they plumbed just a few years ago.
The Camp Nou delays are not indicative of slick running. Nor are the
ongoing battles to comply with rules both at home and abroad. Short-term
liabilities still heavily outweigh assets. Overall profitability remains
elusive.
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